Winning at e-commerce Understanding the Challenges & Opportunities. March 2018
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1 Winning at e-commerce Understanding the Challenges & Opportunities March
2 China E-commerce Evolution The explosive growth of online shopping has revolutionized the world of retailing. Global Ecommerce sales exceeded USD 2 trillion in 2017 and are on pace to more than double by And this trend is likely to continue, creating some uncomfortable disruption as well as amazing opportunities for consumers, manufacturers and retailers. Ecommerce on Mobile is only going to grow exponentially Social communities will influence Ecommerce sales and Retail sales Omni-channel marketing will grow O2O2O Leveraging E-com Big data to optimize offline 2
3 CONSUMERS Online shoppers are faced with complex Ecommerce environments that is constantly evolving BRANDS Marketers are facing challenges to keep their products salient in these new fighting arenas 3
4 Offline Shopping Horizontal Planogram Where Bigger Brands With Brand Blocks and Better Placement Have a Higher Chance of Being Seen Attention Span Is Longer Than Online Shopping Predominantly System 1 To Help Deselection (Limited SKU) A Shopping State Of Mind That Is More Receiving 4
5 Ecommerce Shopping Vertical Planogram Where Smaller Brands Have a Higher Chance of Being Seen Attention Span Is Shorter Than Offline Shopping Rational Tools To Help Deselection (Extensive SKU) A Shopping State Of Mind That Is Less Focused 5
6 Easy as A-B-C? Or more complicated? Just take a pack shot and put it up? Do I have too much information in my visual that shoppers are deselecting information? Can I communicate effectively the pack quantity? Can I communicate effectively the pack size? Can a more visceral image improve sales conversion? Category page 6
7 They Are Trying Different Ways To Bring The Product Closer To The Shopper Static photos of the products displaying variety and application effects Video of the shopping journey to ensure authenticity Video of the product used by another consumer 7
8 This Gap Represents A Threat! Limit e-commerce Adoption Lead to List Shopping Lead to Weakening Brand Influences Reduce Impulse Purchasing & Profitability 8
9 And An Opportunity! By Providing a Superior Shopping Experience (drawing new shoppers, expanding baskets, etc.) By Better Presenting Brands & Products (and winning market share) 9
10 We Have Done Extensive Research To Better Understand Our Online Shoppers And We Found Some Interesting Behaviour 10
11 Our Attention Span Have a Threshold From here, visibility noting falls below 50% ~ 7 mobile phone scrolls 11
12 Our Physiological Visibility Have a Consistent Pattern Singular Row 2 Columns 3 Columns 12
13 Call Outs Can Expand Shoppers Consideration Sets... Without Call-Outs With Call-Outs Avg. Shopping Time: 67 seconds Avg. Shopping Time: 70 seconds 13
14 Behavior For More Involved Category vs Impulse Category Can Be Vastly Different Number of scroll >50% visibility 4 8 Number of scroll >50% visibility Avg. shopping time Avg. product page visited Avg. product page duration Avg. units purchased 100s s s s 5.0 Avg. shopping time Avg. product page visited Avg. product page duration Avg. units purchased 14
15 And The Tools They Used While Shopping Is Also Different Assisted deselection tools usage % Assisted deselection tools usage % Sort sales Filter Brand Search Filter import/local Sort Price Filter Price range Sort sales Filter Brand Search Filter import/local Sort Price Filter Price range Exploration tools usage % Exploration tools usage % Scroll through images Comments Details Promotions Scroll through images Comments Details Promotions 15
16 We Learn How To Make Shoppers Take In Information Better Large product visuals of fruits to cue taste perception Reducing size perception issues Centrally placed text to encourage reading Use of product movement to cue fun and energy Large product visuals of fruits to cue taste perception Clean white space to enhance readability Clear claims 16
17 We Learn How To Balance Image Simplification To Improve Sales 17
18 We Learn How To Balance Image Simplification To Improve Sales 18
19 We Learn How To Balance Image Simplification To Improve Sales 19
20 We Learn About The Influence Of Different Contexts Shoppers shopping on Landing Page Shoppers shopping on Product Page Shoppers shopping on Checkout Page 20
21 Shoppers Use Social Norms To Guide Their Choices Sort sales Search Sort Price Filter JD Filter Brand Filter Category Filter Single size Filter Packaging Filter Pack format Deselection tools usage % BEHAVIORAL ECONOMICS NORMS Sorting by Sales facilitate the choice and encourage the need for conformity It is tantalizing to follow the majority s behavior to avoid thinking too much about certain decisions and be part of the norm. Sort Comments Filter Import/export Filter Product source Filter Quantity Filter Price range Source: Online Beverage Shopping Base: 450p 21
22 Shoppers Seek Negative Comments/Reviews To Confirm Their Choices Scroll through images Comments Details Promotions Exploratory tools usage % BEHAVIORAL ECONOMICS Loss aversion Clicking on comments influence perception We are more sensitive to a loss than to an equivalent gain. We react more to what is framed as a loss than to what is framed as a gain. Losing 100RMB is about twice more painful than winning 100RMB is enjoyable. Enter flagship Source: Online Powdered Drinks Shopping Comments from other buyers 22
23 Social Communities Are Changing The Way Online Shoppers Make Decisions BEHAVIORAL ECONOMICS Transmitter Online celebrities and viewing product pictures/comments by other buyers as they are the real messengers We give more credence to someone familiar, famous or close. In this case, the personnel exhibiting the benefits and usage of their products is given more attention compared to the brands itself. The two way communication also facilitate a more effective selling approach. Online Celebrities 23
24 How Is This Done At PRS IN VIVO? 24
25 Looking Ahead! The Issues We Are Exploring Looking Ahead: Issues We re Exploring 25
26 How Can We Replicate More Tactile & Experiential Shopping Experiences Online? 26
27 How Can We Encourage Browsing & Impulse Purchases? 27
28 Winning at the 2nd Moment of Truth Sustainability, Product Protection & The Unwrapping Experience 28
29 Winning at the 2nd Moment of Truth Branding & Marketing Communication 29
30 How Can We Apply Behavioral Science To Understand And Impact Shopper Behavior? 30
31 Designing More Effectively For E-commerce 1. The Mental Screen Whoever commands our attention wins 2. Function Follows Form Behavior is affected by color and visual complexity 3. Display Biases People will look at the rows more often than the columns 4. The New Mirror Just the right amount at the right time and we pay attention. Too much and we tune things out 5. Desirable Difficulty. There is an upside to making things complicated 6. Digital Tailoring We respond to things personalized to us 7. The Choice Opportunity Too little and people are concerned they are missing something. Too much and people shut down 8. Thinking Architecture In the right circumstances, we get people to stop and think 31
32 Winning at e-commerce Understanding the Challenges & Opportunities 32
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