The other weekend I happened to see the film ‘Crazy Rich Asians’. For those who haven’t seen it, the movie starts with a quote from Napoleon Bonaparte “let China sleep, for when she wakes, she will shake the world”. After trying to secretly jot down the quote on my phone, it got me thinking. Paraphrasing some research on the quote, Bonaparte, having observed Chinese history, took the view if China decided to industrialise in the future, it would advance faster than any European country.
Who knew what foresight he had.
Last year, Chinese consumers spent more online than the US and UK combined, around £760bn but more interestingly, over 60% was conducted via mobile devices verses 40% for the UK – the rise in Chinese consumer spending coinciding with the rise of mobile devices meant most Chinese consumers skipped the PC generation. But if we delve a little deeper, it becomes apparent there is also a very different buying behaviour and the subject of some great research at #BCG, which I’ll try and summarise below.
In UK, like other western economies, e-commerce grew to provide an efficient shopping experience. Many e-commerce sites emerged to provide a quick and easy way to search and pay for products, but UK consumers will often visit multiple sites before making a purchase. This transactional approach contrasts with a more exploratory process in China. Through one of several online marketplaces, a typical Chinese consumer will still use search but also engage in richer content such as video, embedded social media or community discussions. This exploratory process provides insight into the consumers’ preferences enabling those platforms to dynamically push content and product recommendations based on that deeper insight. Furthermore, they have woven content providers, merchants and social media influencers to provide a platform that both informs, entertains and educates with the option to buy at any point – making the entire customer journey more integrated.
So, what conclusions can we draw from this?
In summary, retailers need to evolve into data driven retailing. They need to invest in AI and data analytics to deepen the level of consumer personalisation and shift from product recommendations simply based on past search criteria. Over time, retailers should be able to reduce stock holding and merchandising effort with AI taking on more of the associated activities. They should also look to develop and use informational content to better engage with consumers through online events whether fashion/product shout-outs or events hosted by social media influencers. Finally, to support the harvesting of consumer insight and increasing levels of automation required to react to that insight, retailers need to invest in seamlessly integrated retail technology.
Back to the bow tie.
The same weekend, I also fortunate enough to attend a fundraising charity ball for Mind (#mindcharity). I usually attend these types of events 2-3 times a year, but every time forget how to tie a bow tie. Now I know I could go and buy a clip-on, but the let’s be honest, there is something James Bond’esq about wearing a proper tie. So, after some verbal expression of frustration, I ended up going online to find the answer. Why do I mention this, well, if the tie retailer had some instructional content, not only would that have generated some loyalty but if they also used a modern retailing platform, the act of watching the video should have prompted a suggestion to buy some new cuff-links or related attire, but sadly, they didn’t. No olive to go with my Vodka martini.
If you are interested in evolving into a data driven retailer or simply wish to know more, please get in touch. MI6 need not apply. Best wishes, Tim