KUALA LUMPUR – Dentsu Aegis Network Malaysia today shares its findings in automated e-commerce, a concept which the advertising group believes will help brands build sales loyalty through online replenishment of goods automatically.
The insights discovery project was carried out in collaboration with InsightzClub, a tech-oriented market research and analytics start-up established in Malaysia and Singapore last year as part of the muru-D accelerator programme, which is backed by Australia’s Telstra.
Commenting on the purpose of the research, Sue-Anne Lim, Chief Data Officer, Dentsu Aegis Network Malaysia said, “The beauty of any digital business is agility. The ability to pivot and improve on services and customer experiences on the fly means we can offer a better product today from yesterday. At Dentsu Aegis Network, we were curious to discover missed opportunities for fast-moving consumer goods (FMCG) businesses as the digital economy picks up.”
“So we recently queried 500 shoppers. Ironically, the survey was called ‘The Non-Shopping Experience’ to uncover insights and deep motivations in helping brands build sales loyalty via e-commerce. If our concept is successful, this also means brands that are not quick enough to adopt such automated innovation will face a harder challenge to acquire customers from other competing brands in the future,” she explained.
The survey looked at online and offline purchase behaviours and attitudes towards four categories, namely personal care, health care, home care and baby care, and tested the possibility of replenishing goods automatically. Here are some key findings:
As expected, there are more self-decisions made in personal care compared to all other categories, especially home care where products are normally of shared use. What we discovered was that baby products such as diaper and milk powder has a purchase frequency that doubles all other products, while health supplement has the longest usage duration before repurchase occurs. But across all categories, purchase cycle is very predictable – up to 89% for infant milk powder. Even the lowest scoring category of home care products has a predictability of 69% of fixed buying frequency.
When it comes to brand power, baby-related products hold the greatest brand loyalty and particularity. Home care has the highest possibility of brand switch but still 38% of shoppers prefer to stick to their current brand. What this really means is by just automating the shopping basket, marketers can almost guarantee 4 unit sales out of 10 incidences. Currently, the overall population of e-shoppers might still seem low as many are still purchasing goods from physical stores but 40% of those surveyed area already consistently purchasing health supplements online, while online purchase for personal care items came in at 36%. When asked on their brick and mortar experience, majority of them cited ‘time consuming’ and ‘having to physically carry the items home’ as their biggest bane. Especially for baby products, an average of 39% parents are frustrated and stressed out when needed to rush to the store for replenishment.
The greatest epiphany of our discovery was the positive acceptance of the automated replenishment concept – shoppers list the products they want to be automatically replenished at their doorstep without them having to repetitively order for it. Suddenly, we see the vast majority of supermarket shoppers, 81% of them picking up great interest in shopping online. The rest of the surveyed population cited ‘uncomfortable in receiving products automatically’ and ‘need to see if it works properly’ as reasons for indifference. Though what’s really interesting is, only less than 3% of the parental population showed disinterest in the concept which speaks volume about market potential.
Figure 1: Percentage of Offline and Online Shoppers (left) versus Interest in Automated Replenishment (right)
“Between now till 2020, Malaysia e-commerce growth is forecasted to enjoy a CAGR of 23.7% which is one of, if not the highest in the region. We all know that e-commerce success is heavily reliant on many other adjacent industries such as device penetration, web connectivity, developed logistics and infrastructures and payment channels. But unlike our neighbours, our challenge here is more behavioural than infrastructural. From this survey, we confidently conclude that behaviours can be modified and cultivated as long as the solution provides ease and not redundancy. Automating supplies is a concept that can help brands move from sales invisibility to predictability,” Lim concluded.
In main photo is Sue-Anne Lim, Chief Data Officer, Dentsu Aegis Network Malaysia.