E-commerce & mobile retailBrand managementStrategy
Marketers for companies that sell goods online should return to the 4Ps of product, price, place and promotion to counter the changing fortunes of e-commerce, according to a new WARC exclusive report by JP Castlin and James Hankins.
Why it matters
Brands in retail and many other sectors have increased their focus on direct sales to customers online in recent years. But the rise in online sales has – according to the authors – had a negative impact on profitability. In a gloomier economic climate there has been a shift in emphasis from growth to profit, increasing the pressure on businesses that sell principally online – the collapse of Made.com in the UK is an example.
What do they recommend?
Castlin, a strategic management consultant, and Hankins, Global VP Marketing Strategy and Planning at Sage, argue in the white paper that marketers in these companies can mitigate this pressure. For example:
Optimising fulfilment – for example, by developing a 'marketplace' approach that brings additional products or brands into the mix offered to consumers;
Rethinking pricing, including delivery and return fees;
Investing in proprietary ad networks (retail media);
Using brand-building advertising to soften price sensitivity among consumers.
Where can I find out more?
The full report is available to subscribers of WARC Strategy and WARC Digital Commerce via warc.com. For one week only it is available to download to non-subscribers here.
"Companies that fail to mitigate the cost of e-commerce will find themselves dangerously exposed. Not only is consumer demand shifting, but capital is, in the wake of rampant inflation and subsequent interest rate hikes, becoming increasingly expensive and difficult to come by."
Brands have an opportunity to engage with consumers in new and exciting ways in the metaverse, but they’ll need to offer something truly special and desirable if people are to overcome their hesitations around data privacy and safety.
China’s entry-level luxury consumers are unlikely to be drawn into a spending spree as the economy begins to pick up after the easing of Covid restrictions, according to a new report from Bain & Company.
Why it matters
Globally, Bain reports that the top 2% of customers account for about 40% of luxury sales and that pattern is broadly replicated in China, where the consultancy also observes a growing concentration of such VICs (Very Important Customers). These people buy more frequently online and off.
Luxury marketers are likely to find themselves targeting a significantly smaller audience than was the case pre-pandemic, with greater focus on high-net-worth individuals and less on middle-class purchasers who will be more cautious in their spending.
Luxury spending declined in 2022 – 10% across the sector – but some categories were worse hit than others. Those with strong online penetration were less affected: luxury beauty, for example, has an online penetration of 50% and contracted just 6%.
When in-store shopping became possible again, luxury customers weren’t browsing but completing short, targeted shopping trips.
Bigger and iconic brands typically outperformed smaller and trends-focused ones.
The resumption of travel will boost the domestic market initially, where duty-free shopping in Hainan had become important pre-Covid. As international travel picks up, luxury brands may need to rethink their global pricing strategies.
Brand purpose in Asia: Consumers seek brand support for societal issues
Brand purposeSustainabilityAsia (general region)
A BBDO Asia report finds growing demand for brand purpose in the region, with brands becoming an unlikely ally for Asian citizens as they look to fill the gap where national institutions often cannot or will not.
Raw footage trend hints at users’ online appetites
User generated content & participationContent marketingCreativity & research
New research into video content of last year’s biggest stories across Europe finds a preference for raw, authentic, in-the-moment footage: a finding that could have implications for branded content.
Why it matters
Sony’s research, which also plugs its cloud video production software, suggests that the prevalence of roughly shot, unedited video, and the popularity of archive, point to two useful conclusions about online content: users like to find things online, and users want to put more experiential context into news.
What it says
The research is based on search and social analytics, to identify the highest-interest news stories on Twitter across eight European markets. A team of researchers then explored the trends found among the highest-engagement videos about these major stories.
UGC (user-generated content) accounted for a greater share of results than content produced by traditional news outlets (39% versus 30% respectively).
37% of high-engagement videos were unedited.
47% of videos had one or more of the following: tear-jerking moments, offered greater primary material (who said what when) about the news event, or singular perspectives of a news event.
While the aim of the research is to induce media businesses to invest in speeding up their video workflows (and the accessibility of their archives), it helps to illuminate some of the deeper trends in user engagement among an European audience.
“This research shows this is a clear driver of online engagement and there is an appetite to feel and experience news as it's unfolding in its raw form” – Clothilde Redfern, Chairwoman of the Rory Peck Trust, a charity for the safety and welfare of freelance journalists.