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SEA is world’s fastest-growing online retail market: report

COVID-19 drove Southeast Asia’s consumers to online channels, helping marketplaces in the region to grow 53% in 2020 as all categories performed well, according to Forrester’s 2021 Online Retail Forecast, Southeast Asia, for 2020 to 2025.

Why it matters

The pandemic impacted offline retail in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam last year but offline retailers that moved online fared well, with the region emerging as the fastest-growing online retail market globally; grocery, in particular, experienced the sharpest-ever spurt in growth.

Key findings

• The region saw online retail penetration increasing by more than 50% from 2019 and taking a 7.6% share in 2020. By 2025, Forrester forecasts that online’s share of total retail sales will double to reach 15%.
• Notable factors that weighed on the SEA e-commerce market were country growth, category growth and buyer growth.
• Indonesia, the largest market in the region, accounts for about half of the total e-commerce market, growing by 50% in 2020.
• The Philippines grew fastest at 68%; its online retail growth paralleled Argentina’s growth – the fastest in Latin America.
  
• In 2020, all the categories in the region saw a sharp surge, with grocery registering the greatest growth at 97%.
• Consumer electronics, which includes smartphones, dominated overall spend with 31% of total online retail and 62% growth.
• Fashion, the second-largest category, grew 34% even as consumer spend moved toward non-discretionary items.

The big picture 

Offline retail in Southeast Asia contracted because of enforced store closures, but retailers and brands ramped up their digital presence to meet the shift in demand. New ways to engage with consumers emerged and marketplaces moved in aggressively to add categories that were underserved. The focus also shifted to improving delivery time, leading to significant investments in last-mile delivery startups.

Sourced from Forrester

AdGreen adds carbon calculator to industry toolkit

It is only through measurement that you know things are improving – and AdGreen, a consortium of agencies and advertisers including Unilever, Google, and Sky, collaborating with the Advertising Association, is releasing a carbon calculator for the advertising production industry. It adds another tool to the ad industry’s efforts to curb emissions.

Why it matters

This latest effort addresses Action 3 of the Ad Net Zero five-point action plan in that it wants to help curb emissions from the production of advertising, and adds to a suite of tools that includes the IPA’s Media Carbon Calculator.

What you need to know

• The calculator works by allowing users to enter information in four key areas (travel and transport, energy and fuels, materials, catering) that relate to a production and so build up a picture of its carbon impact.
  
• The tool will be free to use, funded by the AdGreen levy. This is an initiative announced in June that places a 0.25% charge on production spend, paid by participating advertisers, and collected by their agencies before being passed to AdGreen each quarter.
• Over 130 brands, advertising agencies and production companies pre-registered to use the tool ahead of its launch. The more brands and agencies that participate, the richer the data will be that can help the industry curb the most carbon-intensive activities.
• Future planned developments include: bid process functionality so that projects can be compared by not just budget and treatment, but environmental impact too; a reporting dashboard to allow users to pull information required for company carbon reporting. 
• The tool, which is released today, can be found at AdGreen’s carbon calculator page. To find out more about how to use the tool, AdGreen is hosting a webinar tomorrow morning (Thursday 30 September).

Key quotes

“Draft footprints can be created at script stage which will allow creative teams to see if they have inadvertently baked emissions into their scripts. Similarly, it’ll mean that clients can see the carbon data on work they’re commissioning and make informed decisions at the procurement stage” – Jo Coombes, Project Director, AdGreen.

Sourced from AdGreen, Advertising Association [Image: AdGreen]

Google calls time on last-click attribution

Google’s buy-side network Google Ads has announced in a blogpost that it is switching its default from last-click attribution to a more modern “data-driven” attribution, an alternative technique that uses machine learning to try to better understand how each touchpoint contributes to conversion.

Why it matters

While there was some evidence that for large brands last-click attribution was simply inadequate – in the case of Adidas encouraging an over-investment in performance advertising – and that there were clearly better techniques, data-driven attribution was closed off to many smaller advertisers due to minimum data requirements. Now these capabilities are becoming more accessible as they become standard.

What will happen

• The rollout will start in October, with the aim of all Google Ads accounts using data-driven attribution by early 2022.
• As well as data-driven attribution, users will continue to have the option to keep using any of the five other rules-based models: last-click, first-click, linear, time decay, position-based.
• Vidhya Srinivasan, VP/GM Buying, Analytics and Measurement at Google Ads told AdExchanger that as more advertisers start using the data-driven method, the quality of Google’s modelling will improve. This is crucial when third-party cookies finally go, as the machine learning can help to fill gaps in the data.

Key quote

“Advertisers around the world have seen better results by switching to data-driven attribution. When combined with automated bidding strategies, data-driven attribution can drive additional conversions at the same cost-per-acquisition. This is because our systems can better predict the incremental impact a specific ad will have on driving a conversion, and adjust bids accordingly to maximize your ROI” – Vidhya Srinivasan, VP/GM Buying, Analytics and Measurement at Google Ads.

Sourced from Google, AdExchanger

SEA’s online groceries soar amid surge in COVID-19 cases: study

Southeast Asia’s top online grocers have seen traffic surge by 68% in the last six months as the region experienced its biggest wave of the pandemic  and consumers made purchases online to limit time spent outside their homes, according to a study by e-commerce aggregator iPrice Group.

Why it matters

With jobs and businesses lost due to the coronavirus, the iPrice study focuses on the prices of essentials and how current government aid may not be enough. Online grocers need to be able to cope with surges in demand driven by government policy and to respond to shifting demand patterns as consumer spending power fluctuates.

Key findings

• Since March, online grocerers’ web visits across the region have been steadily rising. 
  
• The most remarkable growth was seen in Vietnam, when daily COVID-19 cases reached five digits and traffic to the top online grocery site more than doubled (120%). 
  
• Similar trends were seen in other countries – Thailand, Malaysia, Indonesia and the Philippines – where online groceries thrived when daily cases surged.
• When the Philippines implemented an enhanced community quarantine in major cities, two of its top online grocery sites’ traffic increased by 72% compared to March.
• The top Thai online grocers’ web traffic rose by 59% in August compared to March, while Indonesia’s surge was in July when its top online grocerers’ web traffic surged by 51%.
• In Malaysia, when the government imposed a strict lockdown in May, its top online grocers’ web traffic rose by 50% that month compared to the previous month.
• The only country with no remarkable change in online groceries has been Singapore as the country continues to contain daily cases and begins shifting to the endemic stage. 

Consumers have more positive experience when shopping online

Consumers are more satisfied with their experience when shopping online than in-store, according to data from NielsenIQ.

Why it matters

As e-commerce has grown rapidly, in-store retail has been challenged and some argue it needs to have a purpose beyond shopping in order to connect with customers. Using the physical space for social content and experiences could be one successful strategy.

However, linking any offline strategy with the online selling strategy is fundamental, as the two are not separate.

Takeaways

• More than half (53%) of consumers worldwide said they have felt positive about their experience in e-commerce stores since the COVID-19 pandemic began.
• In comparison, just 18% have felt positive about their in-store experience.

Sourced from NielsenIQ, WARC Data

Four ways to create an inclusive environment: lessons from a maths professor

The story of a Colombian mathematician, Federico Ardila-Mantilla, whose experience as an outsider in a homogenous environment as a student led him to radically adapt his methods when he began teaching, holds vital lessons for creating and maintaining inclusive environments.

Why it matters

Front of mind during the middle of last year but a lot less prevalent in mainstream conversation this year, diversity and inclusion is an important area of improvement for brands and agencies alike – with WARC data from late 2020 finding that only a minority had a proper approach.

A serious approach requires different thinking around both hiring and retention. Here, this approach is capable of acknowledging differences rather than pretending to be ‘color-blind’. It is possible to welcome difference with sensitivity and respect, open to a diversity of experience without the onus for sharing falling on those traditionally left out of the room.

The story

As reported in the Atlantic, part of an excerpt from The End of Bias, a book by the writer Jessica Nordell, this is the story of an academic who recognised an emerging pattern in his Black, Latino, and female students when teaching at San Francisco State University. Unlike MIT, where Ardila-Mantilla studied for his BA and PhD, the math class at SFSU drew 60% of its students from ethnic minorities. This created a testing ground for totally different ideas about teaching the subject by rejecting the male, typically white biases in math departments.

Takeaways

• Adapt language: Mathematicians like to say things are “obvious” or “easy to see”. These terms were scrapped in order not to downplay the challenging nature of the discipline and to avoid alienating students.  
• Encourage participation: Responses to questions would be shared in the reverse order in which the hands went up. Participation became everybody’s task rather than a teaching element favouring the loudest or most confident students.
• Use different forms of assessment: Combine performance measurement methodologies – not just short tests, but also using open-ended methods that can reveal strengths similar to the actual practice of science was an important way in which Ardila-Mantilla encouraged all students.
• Collaborate outside your typical context. A joint class with students from the Universidad de los Andes in Colombia created partnerships as students from across borders worked on the same problem together, learning from each other.

It worked

Advertising is not university-level math, but it is a traditionally closed shop where talk of meritocracy rings hollow to those who come from anywhere other than the majority.

This new approach saw 20 of the 21 students in the first joint class go on to graduate study in mathematical subjects; 15 earned PhDs; 14 are now professors. This has never happened at a university like SFSU, which doesn’t grant PhDs.

Sourced from the Atlantic, WARC

Amazon eats into online electricals and stationery

Amazon now accounts for 41% of e-commerce electrical sales in the UK and 23% of online office stationery sales, according to Edge by Ascential – and its share is set to grow significantly as people settle into hybrid models of office work and studying.

Forecast growth 

• E-commerce electrical sales on Amazon in the UK are set to grow 103% by 2025, with Amazon’s category share climbing to 49%.
  
• Online office stationery equipment sales on Amazon in the UK are predicted to increase 144% by 2025, with Amazon’s category share rising to 34%. 
  

Share of search

Edge by Ascential studied the share of search for electrical and office stationery equipment during the back-to-school/university period between 17th July and 17th August. 

• Asus dominated share of search for laptops on Amazon with an average daily share of 20% for most of the the period.
• Pens were the most searched items online across the stationery category, with BIC as the top searched-for brand (30.1%) across major retailers. However, own-label (23.9%) ranked closely in second position, particularly popular via retailers Asda and Tesco.

Takeaway

Amazon is fast becoming the back-to-school retailer of choice due to its wide assortment across multiple categories. But grocery retailer own-label products continue to perform strongly, as the price gap here may have more value with consumers over branded competitors.

Sourced from Edge by Ascential

Asia's agencies can step up on brand purpose

Simplistic talk of brand and business purpose skates over the fact that this is as complex, heterogenous and sensitive as any other cultural issue in Asia and requires a detailed and sensitive situational examination to get it right: agencies can play a critical role. 

Why it matters

Purpose is increasingly regarded as an important factor for driving business growth but it remains an ambiguous and often misunderstood concept. Agencies act on behalf of the brands they serve and have a duty-of-care responsibility for the current and future health and well-being of those brands: they can help clients navigate the various matters surrounding purpose and get them right. 

Context

• 87% of CEOs whose company has a purpose statement say it plays an integral role, driving initiatives across the business.
• There is an important distinction to be made between “brand as purpose” and “business as purpose”.
• Agencies can facilitate the purpose conversation and address issues such as inclusivity in advertising. 

Quote

“No matter where your client stands on the purpose debate, it’s a debate that can no longer be ignored” – Andy Wilson, Head of strategy, BBDO Asia.

Madewell and ThredUp’s new store chases second-hand wave

Madewell, part of the J.Crew Group, and online thrift store ThredUp are trialling a second-hand only store in Brooklyn which extends the two firms’ used jeans e-commerce, Madewell Forever; the effort follows the rising tide of pre-owned fashion.

Why it matters

Second-hand shopping isn’t new, but the scale offered by new services like ThredUp in the US and Depop in Europe has opened up a new channel for fashion retailers under pressure to clean up their environmental record and become more sustainable.

The offer

• A Circular Store, as the pop up is known, is a marketing and education exercise for the partnership, but where consumers can buy pre-owned Madewell items for between $10 and $40.
• The store also features a repairs desk where people can either have the life of their clothes extended or learn mending skills.

The context

Ahead of the pandemic, the second-hand market was becoming big business for companies like ThredUp and Depop – which was acquired by Etsy this year – and was opening up new opportunities for luxury brands to bring new consumers, often younger, into the brand experience with genuine items. For these young players like ThredUp, the big opportunity now lies in an emerging resale-as-a-service platform business.

The future is bright. Riding a new acceptance of second-hand items among consumers, spurred by a new recognition that they need to buy more sustainably, brands at the higher end of the market, like Patagonia and Levis, are expanding resale. Meanwhile IKEA, the furniture retailer, is testing reselling furniture in the Nordics.

Be smart

While brands are shrewdly following consumer demand, serious questions arise around how the fashion business model needs to change from selling more and more each quarter to selling less without tanking the business.

Sourced from the Wall Street Journal

Women out-game men in China, but lag behind in Germany and US

Women out-game men in younger games markets, according to data from industry analysts Ampere Analysis.

Why it matters

China and India saw women playing for longer than men in the latest research. However, while men play for longer in more established gaming markets like Germany and the United States, audiences are diversifying to include females and older players.

Gaming has been growing in popularity with advertisers as it can help brands connect with hard-to-reach audiences. However, it is vital that marketers pay attention to gaming's cultural nuances.

Takeaways

• In China, a leading gaming market, women spend 9 hours 42 minutes gaming each week – 42 minutes more than men.
• In India, women spend 7:30 gaming, with men lagging 12 minutes behind, at 7:18.
• In more established markets, such as Germany and the United States, men still lead gaming consumption.

Sourced from Ampere Analysis, WARC Data