The Extraordinary Effectiveness of SMS Coupons

The-Extraordinary-Effectiveness-of-SMS-Coupons

This is a guest post by Orla Forrest of Neon SMS, an SMS Marketing company (http://www.neonsms.ie/).

Marketing campaigns are measured not by how cool or flashy they seem, but by how much money they recoup for the company and whether the investment in the campaign is made back through customer engagement. Therefore, any decisions regarding the execution of the campaign need to be made carefully. For instance, the success or the failure campaign could boil down to the selection of medium through which it is executed.

That will depend on the specifics of the campaign and its target market, but by and large, SMS proves to be the most successful channel by a distance. Its average peak redemption rate is a staggering 85%, which is more than four times greater than any alternative channel, so SMS is a proven winner.

What makes it such an attractive medium for ecommerce? Its convenience is a major plus point, as customers will get the message on their phone and know exactly how to redeem the coupon. The timeframe from the sending of the coupon to its redemption is far shorter than with other channels, as people will have their phones on them the whole time and redemption is usually as quick as sending a short code or keyword. Email, by contrast, tends to go over people’s heads and be ignored, while paper coupons just seem old-fashioned and can easily be left at home by mistake. Your phone, on the other hand, always makes it out the door with you.

For ecommerce providers devising an SMS coupon campaign, the key is in its simplicity. Make it as easy and quick as possible for customers to redeem the coupon, or else they probably won’t bother. Be sensible about the timing and frequency of delivery, too. Send it during evening downtimes rather than first thing in the morning when people are at their busiest at work. Messaging customers once a week is usually the best balance between consistent engagement and not flooding them with messages to the point of nuisance.

What China Reveals About the Future of Shopping

China has more e-commerce activity than any country in the world today. According to China’s National Bureau of Statistics, Chinese consumers spent $750 billion online in 2016—more than the US and the UK combined. That is a jaw-dropping number, but even more interesting is how differently China’s digital marketplace, technology platforms, and online behaviors have evolved compared with those in Western markets.

Read More at BCG

Taking your first steps in China? What makes this market unique?

The Chinese market place is, in my humble opinion, the most fascinating in the world. I have had the pleasure of working in and studying this digital eco-system in China for a number of years. For western businesses looking to expand into the most lucrative [in terms of sustained return on investment and lead generation] yet different marketplace in the world it is important to understand what makes it so unique and why..

China is contradictory in many ways, the country has opened up to foreign investment and business opportunity like never before yet still remains a very separate and distinct proposition for business.

In China digital is king

In China EVERYTHING is now digital. The digital revolution has been unprecedented in the last decade and now become the absolute norm. The country boasts a 58% internet penetration rate which is expected to grow to 65% by the end of 2017. This is relatively low compared to many countries in the world but consider China’s population of 1.4 billion, this therefore equates to 800 million netziens.

Consumer culture is increasingly orientated around digital engagement, online to offline, and e-payment. The growth of Alibaba, WeChat and Baidu as the key online giants has helped facilitate such consumer trends.

You don’t need to spend long in China to realize the prevalence of digital. Chinese citizens are glued to their smartphones, in-fact, latest figures show there are approximately 550 million smartphones in China. Even physical adverts [without exception] embed QR codes into the images whilst e-payment in stores via Alipay or WeChat has become common practice.

The digital advertising and marketing industry is worth $320 billion in China, the future is digital. But so is the present. You have to understand that whilst offline methods still exist they are old news, you have to be where your target market is, and that is online on search engines, e-forums, social networks.

The key fact to digest is the scale of China’s internet penetration, typically it was the east coast of the country with the largest 1st tier cities that had the largest online communities but of course most of the population of China live in  tier 2 and 3 cities, the growth of internet access here is increasing at the fastest pace, in part because of the success of Alibaba’s e-commerce infrastructure.. but more  on this later.

The market is different, Chinese platforms dominate.

The market developed under a unique and different set of conditions. What you have in China is effectively a closed intranet, rather than the open source web we are used to. The online sphere has been shaped by state regulation, policy and Chinese cultural trends. This has produced a market place where Chinese, home-grown platforms dominate. State regulation shut western competitors such as Facebook, Google, Youtube etc out of the largest market in the world, in this vacuum Chinese specific adaptions evolved to cater more specifically for the Chinese user. Instead therefore we have WeChat, Baidu and Youku.

Western brands, products and services need to utilize this Chinese infrastructure for growth in order to succeed.

Chinese platforms are world leading

Chinese platforms are not just unique but also world leading, innovative businesses in their own right. They may have started out as western ‘copycats’ but have now evolved into very different, multi-faceted creatures.

Baidu is the largest search engine in China with 70% of all online research conducted here. For any business a strong presence on Baidu is vital but takes time as you need to appear in the natural results based on Chinese keyword searches. Baidu’s intelligent system named ‘the spider’ prioritizes websites hosted on a local server which are optimized for Mandarin character searches. Like Google, the engine rewards fresh content and backlinks from other sites to increase visibility in the search results.

Baidu are investing heavily in virtual and augmented reality with aim of incorporating this into their searching services as well as facilitating their wider uptake and commercialization in Chinese society.

WeChat is arguably the most integrated platform in the world with 750 million active user accounts. It is designed as a ‘one stop shop’ for everyday life with a host of their own and third party apps on offer within the network. WeChat functions as a browser, app store, instant messenger, is used for sharing video’s and pictures, a taxi ordering application, voice messaging, an e-payment system as well as providing services in dating, financial investment and geo-mapping location.

Weibo (akin to Twitter) is a micro-blogging platform with 250 million users. Users can see posts from anyone, they do not have to be connected first. This makes it an ideal place to work on branding or for spreading a message with articles often the subject of posts. User interactions remains high on Weibo with posts up-ranked based on the number of likes and comments from the community. If content is going to go ‘viral’, it will most likely be on Weibo. Many online influencers and celebrities also use Weibo as their main network for posting and interacting with followers.

In China you have to start over again.

Regardless of your status outside of China, because the internet has been ring-fenced, you need to build a reputation and visibility from scratch to generate leads. Baidu, the largest search engine presiding over 70% of all online research, is based on Mandarin Character keyword searches, English optimized keywords are redundant.

This does present a great opportunity too, the barriers for entry also result in fewer international competitors, and this is what sets you apart. Being first to market in China is vital, I have seen time and time again that, if you brand yourself and grow your online presence ahead of the competition you are far more likely to succeed.

Everything moves fast

In China everything moves quickly, part of the frantic pace of modern life as the country hurtles into the future. This results in large scale investments and innovations being made quickly and decisively. You need to move fast to get ahead of competitors. Take the ‘mobile biking revolution’ as an example. The leading player is ‘Mobike’ who launched an app where you scan their branded bike to start riding and scan to finish, leaving it wherever you want. Using mapping services users can locate the nearest bike. Mobike launched and within two weeks had placed over 30 000 bikes in the first tier city centres. The app launched and within a single month boasted over 200 000 registered users. Digital growth is fast paced, decisive and exciting..

The behaviour of Chinese online

Chinese ‘netziens’ are arguably the most engaged online users in the world. They spend on average a whopping 2.5 hours per day online. 1.5 hours of this is spent on social networks. The Chinese user see’s the internet as their greatest resource for researching, and this is their key trait, the Chinese research online like no other nation.

This is due to a number of factors. Many Chinese have been cheated or let down by poor quality products and services. This makes them more discerning in their purchasing habits and sceptical of new brands without a reputation.

The other factor is that Forums remain wildly popular, in search engine results forums will often appear above an official website. The ‘forum’ is unfashionable now in the west but remains vital to any marketing strategy in China. I would suggest this is due to the Chinese reliance on peer based reviews and shared opinions, perhaps because of their more collectivist nature.

The importance of mobile

There are now 550 million smartphones in China. This is because of mass market, affordable models from brands such as Vivo and Xiaomei. It has led to a mobile-centric digital market place and underscores the importance of mobile optimized content, app development and mini-sites.

Mobile has produced a type of ‘on the go’ engagement. WeChat was built as a mobile app with users spending an average of 1.5 hours a day on the platform. This is because of this culture of instant gratification, frequent usage and mobile interactions.

With the dominance of smartphones comes the proliferation of apps. The largest app store is Tencent’s ‘My App’ with a 24% market share, in second is ‘360 mobile assistant’ with a 16% coverage. WeChat are also launching their own internal app store which will tap into their 750 million active user accounts.

E-payments

E-payments are the norm in China now. The largest third party payment app is ‘Alipay’, part of the Alibaba group. Users can simply scan a QR code to make instant payment from their e-wallet, this is linked to their banking. E-finance services have developed with users able to transfer funds to each others accounts, make investments and manage accounts. WeChat also launched an e-wallet service to compete with Alipay.

‘Hongbaos’, the traditional red envelope given at important Chinese festivals and life events, has now been updated in our digital era. E-wallet services allow users to send and receive hongbaos with either a fixed or random allocation of money inside. Alipay spent millions in offering ‘lucky dips’ on red envelopes to incentivize users to give digitally. The search for envelopes has even been integrated into the physical environment with new Augmented Reality based games, users through geo-location services and their camera on a smart phone can find and open envelopes. Think ‘Pokemon Go’ but there is a financial inventive.

QR Codes

QR codes really took off here and have created strong opportunities to drive traffic from offline to online. By scanning a code, users can be linked to a company website, wechat page or some specific content. QR’s are now featured on most ads, in magazines and newspapers and on physical products. This highlights the nations pre-occupation with digital engagement. It is commonplace to see someone scan the code from an ad in a metro station because this links to the bulk of the content. The take home message is that even with offline activities, the main goal is to drive the prospect online, especially as paying via digital wallets is the best and easiest method for payment.

 

China is a fascinating market, especially because of its uniqueness coupled with its profitability. Nowhere else on earth will you find a closed system with such a vast user uptake of digital services and as a passionate marketer this captivates me.

Benji is a digital marketing specialist focused on the Chinese market, for more information see his blog and website here.

AMZN Crushing Mobile

As BI reports, Amazon is dominating the mobile commerce space. Oppenheimer highlighted by just how much saying …“At the end of 2014, Amazon had roughly the same number of mobile unique visitors as Walmart and eBay, in the US. As of December 2016, Amazon has more unique visitors than the apps of those two companies’ combined,”.

And outside of Walmart and Ebay, the rest of the entire retail industry is way behind to the point you could be forgiven for writing them off entirely in the future of mobile commerce:

amzn-mob

So we have an Amazon dominated mobile commerce landscape in the near future. But long-term, perhaps as has always happened, the Internet will throw something new at us.

Five Key Features of Chinese E-commerce

The E-commerce sector in China is an incredibly lucrative one. An internet penetration rate of just under 50% results in 600 million Chinese citizens having access to the internet. E-retailing is therefore a key opportunity for western brands who can establish a presence in the mysterious orient without having to physically move operations here. With the large potential consumer base coupled with the relatively low costs of operating online, this is a significant opportunity for western brands.
Here are five unique features of Chinese e-commerce.
China is the largest market for e-commerce in the world
Forbes reported that in China “the e-retail market is estimated to grow to over $1 trillion by 2018”, it could therefore become larger than the e-commerce markets of the U.S, Britain, Japan, Germany, and France combined. There were more than 360 million online shoppers in China in 2014, more than the entire population of the U.S. Due to rapid urbanisation in China cities are increasingly more congested, polluted and crowded with more pressure put on infrastructure and public services. Many Chinese as a result turn to online shopping to avoid the crowds, this coupled with faster delivery times leads to more purchases.
The Chinese popularly purchase fashion items, cosmetics and entertainment based products online.
E-commerce has ‘gone mobile’ in China
E-commerce has truly gone mobile in China, online shopping conducted on smartphones, tablets, and other mobile devices will reach US $334 billion in 2015, mobile shopping will thus account for 49.7 percent of ecommerce expenditure. With the rise of the smart phone/tablet (phone sales have increased 17% from the previous year) and user friendly apps, the Chinese consumer’s life is increasingly centred around their mobile. This produces an avid consumer who seeks to purchase ‘on the go’ without relying on physical stores or locations.
The e-commerce landscape is different
The e-commerce market is unique in China largely due to internet censorship, many western e-commerce giants have not been able to successfully expand into the middle kingdom due to state restrictions. This is also evidence that the Chinese market is very different, you cannot simply transplant an existing business model that works in the west into China.
As a result the largest e-commerce websites in China are domestic firms that have grown to cater for the unique demands of the market here.
Who are the main players?
The Chinese internet giant Alibaba own the two largest e-commerce platforms.
Tao Bao – Tao Bao is owned by online giants Alibaba and is the most successful online retail platform in China. Taobao facilitates consumer to consumer (C2C) retail by providing a platform for small businesses and entrepreneurs to open online stores. Sellers can post goods to sell at a fixed price but also in auction (although this makes up a very small percentage of sales).
Unlike eBay who charge sellers on a transaction basis, Taobao offers the basic service to sellers for free.
Taobao also offers an advertising/promotion service to monetize traffic, which sellers will popularly pay to participate. Taobao provides two lists, an ‘organic’ listing, where sellers are listed for free, as well as a ‘paid’ listing, where sellers pay Taobao to increase their exposure to potential buyers.
The Chinese greatly value direct communication so setting up a messaging system between buyers has also proved popular, users can rate sellers and leave reviews which are strongly heeded in China.
TmallTmall has become a popular e-commerce platform where Chinese shoppers are able to purchase international and local brands.
It was launched in 2008 as an e-commerce website with the aim to host official brand ‘shops’. This greatly appeals to the Chinese as there are so many fake and counterfeit goods circulating, they want to ensure brands are genuine and will pay a premium for this.
Tmall Global was then launched in 2014 with the purpose of promoting foreign brands and facilitating their access to the Chinese market. Nowadays, Tmall has more than 70,000 brands in 50,000 stores.

Other sites such as JD.com or yhd.com are also growing in popularity but Alibaba currently have the e-commerce monopoly in the middle kingdom.

The Chinese actively share their purchases on social media

Shoppers are incredibly active in terms of their online communication, they will often share their purchase decisions with their network on social media outlets such as Weibo or WeChat. Many Chinese online platforms offer consumers the chance to share their purchases directly after they are made online. The Chinese particularly place great trust in their immediate social circle so linking e-commerce to social networks is an important cross-over to capitalize upon.
Understanding the right channels and the market is key, many firms will partner with local, specialist agencies to develop this knowledge and utilize their connections in China. Establishing connections with online retailers is key, of course the language barrier can be an issue (there are still relatively low levels of English) so having a Mandarin speaker and their knowledge is vital.
Benji Lamb has lived in Shanghai for five years and specializes in e-commerce, digital marketing, and social networking in China. He is passionate about finding solutions for western firms in the aptly named mysterious orient. For more information see his marketing website and blog.

Flipkart Mobile Move is Genius or Self-Destruction

In what one can only describe as stunning, India’s number one ecommerce website Flipkart is shutting down it’s desktop website and going mobile only (according to Indian Express and others)

Wow. The reason given is equally wow:

“India is gradually transitioning from a mobile first to a mobile only country… We are constantly experimenting with various aspects of our service to create the best shopping experience for our users on our app…,” Flipkart said in a statement.

This is a bold bet. There is the fact that most mobile users use devices to game or as the WSJ puts it “43% of our time is spent catapulting angry birds at pigs and fighting monsters”. This infographic from the same piece shows how we divide our time on these devices:

Mobile Device Usage

Source: WSJ

So where does shopping fit in exactly? Well, it doesn’t. Flipkart execs are correct to point out mobile represents most of ecommerce traffic these days (Shopify puts it at 50% as opposed to Flipkarts 75%). But as Tobi Lutke points out in the same article, the transition from desktop to mobile is far from complete:

We also began to work closely with major mobile operating system providers to try to address a current shortcoming of mobile: conversion rate. While the majority of online store traffic now comes from mobile, the majority of purchases still happen using computers.

So Flipkart are extremely early on this shuttering the desktop website. However who really knows, perhaps this will be a prescient move that gives them an edge over the likes of Amazon who essentially birthed the concept of desktop based ecommerce? Maybe India being a developing, mobile first country will prove this? Time wil tell but if you’re an ecommerce merchant, I wouldn’t rush in their footsteps.

State of Mobile Commerce in One Slide

If you’re running an ecommerce business and you’re unsure on mobile, this slide from Business Insider’s Henry Blodget really brings home how important it is:

Mobile Ecommerce

Already since iPhone started the smartphone revolution in the late 2000’s, mobile represents fully one third of ecommerce traffic. Click through to read the entire deck, well worth 5 minutes of your time.