Commerce Marketing: Understanding Mobile Marketing and Omni-Channel Shopping in India

A summary report from theCriteo Exec Connect roundtable, Bengaluru, India, 26th October 2017, organised in association with the Internet And Mobile Association of India (IAMAI)

The explosion of Mobile, Apps and Omni-channel shopping in India

India is experiencing a massive growth in the use of mobile, which is changing consumer behaviour and in turn having a massive impact on digital marketers, brands, marketplaces and technology vendors.

According to a study conducted by Criteo, mobile shopping apps, in particular, are becoming extremely popular within the country. Three quarters (74%) of respondents said that they have installed two or more shopping apps on their phone, while more than 60% buy goods from online marketplaces on mobile between 2-5 times a month. Overall, four fifths (80%) of shoppers in India say they feel as comfortable and secure using mobile for online shopping as they do while using desktop/laptops.

“We’ve seen a very steady rise of app installs from early this year onwards. This is not just happening in companies operating out of India - app developers across the world are seeing a ton of downloads coming from India”, said Sanjay Trisal, Country Manager for the India branch of Appsflyer, an international marketing and analytics attribution platform.

To understand the nature of this new mobile phenomenon, Criteo and the Internet And Mobile Association of India (IAMAI), a not-for-profit industry body which aims to expand and enhance the online and mobile value-added services sectors in India, hosted a roundtable with leading digital marketing professionals in the region. Representatives from Titan Company, Ajio, Furlenco, RedBus, bigbasket, Voonik, Max Fashion, Nykaa, Appsflyer, Zivame, and Shopclues came together at Criteo Exec Connect Bengaluru, seeking to broaden the understanding of the mobile phenomenon within the country.

With mobile, the way that brands can market to potential shoppers has been disrupted completely. Mobile gives brands the opportunity to understand so much more about how their target consumers behave as shoppers in different channels and retail environments. At the same time, this has also added significant complexity in the best way to achieve marketing success.

Vishwanath, CMO, of Voonik, an online fashion marketplace for women, gave an overview of how the industry has changed in India. “30 years ago, business to consumer (B2C) businesses were all about advertising focused on building general awareness to large sections of the population. This channel of distribution has evolved significantly today. Today, we see that some part of customer decision-making is now made at the point of sale. This is where shopper marketing started - when you realise it's not all about winning the awareness battle. There is also an equal battle to be fought in-store or online. With the proliferation of mobile devices and the increasing popularity of apps, traditional notions of shopper marketing have changed completely.”

Meera Iyer, Head of Marketing of bigbasket, India’s largest online grocery retailer, commented: “When you think about the classic definition of shopper marketing in the offline world, you would focus on visibility in-store, or having someone manning a counter and giving free samples, all led by specific brands in a store. A footfall to the store however would easily convert to a sale for some or the other assortment. In the online world, conversion of a visitor to your store is not a given. In fact, the best of portals manage to only convert 15% of their visitors. This means that shopper marketing has to be totally rethought.”

“Almost all of marketing can be done on an e-commerce platform, especially for a small brand. Today, companies like bigbasket and FlipKart are now doing their advertising on the distribution channel. Shopper marketing is now a lot wider because it includes both brand building as well as smaller brands looking to make an immediate impact.” Vishwanath, CMO, Voonik.

Jiten Mahendra, Head of Marketing at Max Fashion, believes that brands should create an omnibrand strategy instead of focusing on an online vs offline strategy, as more new physical platforms will evolve further. He also believed that brands should focus on engaging with consumers differently without losing the core brand proposition. “Today, customers are spending a huge amount of effort on research before they come to buy the product. The conversation between brand and consumer has transformed from a monologue to an interactive discussion. The digital revolution has helped the customer which is facilitating ROPO (Research Online Purchase Offline). We see around approximately 60% of our business coming to us from those who’ve already researched us.”

“Selling happens at various phases. It’s not just about one environment where you give your best offer and then the customer buys from you. Some interactions with brands are taking place physically, and some are happening online. The decision-making process is happening somewhere in this phygital space. That's where the evolution of shopper marketing is going for us.” - Jiten Mahendra, Head of Marketing, Max Fashion

Hitesh Malhotra, CMO of Nykaa, a beauty retailer player in India, commented: “The old equations of accessibility are completely ruled out now. On average, people have six to seven shopping apps. How do you ensure that you get them to your site, and what differentiated experience are you providing? Shoppers in the olden days were just looking for a catalogue, and they were quite happy with it because it was really convenient not to have a retail store. Now, there are a plethora of online companies and the whole point has changed from convenience to pampering. How do you convince them to come back and make repeat purchases?”


Companies need to invest in retention and loyalty to succeed in a competitive mobile landscape

It is clear that mobile is making a huge impact on marketing, but the problem for many retailers lies not in the ability to adapt to that platform, but to excel in it. The increasing accessibility of mobile and far-reaching nature of online marketing has made e-commerce extremely competitive. In the past, only the big players could afford large media buys and distribution – but today, many brands can do the same with the help of digital advertising and smart distribution. However, it is far easier to acquire customers today than it is to retain.

So how do leading marketers build stronger relationships with customers in this challenging landscape? For Alokedeep Singh, Head of E-Commerce & Digital, Titan Company, India’s leading retailer of watches, jewellery, eyewear and accessories, retaining loyal customers is all about facilitating repeat purchases and making sure that they are not just reached out to, but reached out to correctly. “At Titan, we have one of the largest loyalty programs in the industry. When our customers buy, we give them points which they can redeem. However, while we have the programme implemented both across online and in-store, we are thinking of new ways to optimise it every day. With retargeting, it’s not about chasing the consumer and following him. We want to always add value, and ensure we are finding the correct ways to reach customers at the right time, rather than chasing them after they have come to research us.”

Seema Chawla, CMO of Ajio, an e-commerce marketplace in India, believes that the key to brand loyalty is through providing a great personal shopping experience: “We have incredibly loyal customers. We got obsessive about the way the merchandise moves out, how is it packaged instead of focusing on appeasement and brand recovery. I think we are really obsessive about every non-measurable touchpoint. We make sure that if our customers receive something bad from us, they get something back and are taken care of as well. We've discovered that if they've bought once from us, they're almost guaranteed to come back. And if we see even one tiny social media message from anybody talking about their experience with us, we will always reach out to them.”

“Loyalty is not influenced easily. I don’t believe you can throw money at people and expect them to be loyal. There are two aspects we measure, for success in loyalty: one, how do you get customers you have already acquired to keep coming back to you, and second, how do you increase the share of wallet of these retained customers over time. As a start, you need to use data to understand customer behaviours that affect retentions. For example, we have found that the more diverse the first purchase basket is at bigbasket, the greater the stickiness. Our monthly average basket value is ₹2500. But for loyal customers, its 3X, at ₹7500 - this is a big difference.” - Meera Iyer, Head of Marketing, bigbasket

Jiten Mahendra, Head Of Marketing at Max Fashion, believes that building loyalty in fashion is all about community building: “We are going into the social CRM space where we cluster customers based on their social behaviour. We want to create communities – tribes – where people can get excited about products together instead of us hard selling. We are also exploring a full omni-channel perspective with click and collect – I’m sure this will play a very important part in loyalty moving forward.”

For Aishvarya Chanakya, Vice President Of Marketing, Furlenco, a furniture rental company based in India, retaining loyalty in the furniture business is a completely different ball game: “We get customers staying with us for 16 months – this is the norm. They’re loyal in some sense because they are committed to pay a monthly rental. We want to focus on how we make the “16-month customer” an “18-month customer” next time, and a “20-month customer” in the future. Moving groups of customers from 16 months to 18 months has a huge unit economics impact if you look at it from a larger P&L perspective. While we have an acquisition marketing team which is looking to build awareness and new engagement with us, we also have an equally strong retention marketing team which is tasked with keeping our existing 30,000, 40,000 customers engaged.”

“Loyalty is a different ball game altogether for us. It is about constantly communicating and finding better ways and newer ways to communicate with existing customers. Give them better value, make them feel like they are part of a community. We want to ensure that they don't churn out of our family.” - Aishvarya Chanakya, Vice President of Marketing, Furlenco

Rajiv Kondal, Director of Digital Marketing for RedBus, an online bus ticketing platform based in India, comments: “Retention is the holy grail for RedBus. It’s a whole programme for us, and we have a four-pronged approach. Firstly, we have a cashback scheme alongside a semi-closed RedBus wallet – which creates some stickiness. We employ our referral and ambassador programmes, which gain customers which are even more loyal. We have also introduced product features around the user experience which differentiates RedBus – such as live bus tracking, seats for ladies, and so on. The fourth one is working with technology and partners - we are trying to implement a predictive lifetime value (LTV) model to increase the probability that where we are spending higher, we are getting higher LTV. That’s how we drive retention.”

Apps versus Mobile Sites - which platform should brands choose for success?
Mobile plays a huge part in driving consumers to businesses and instilling loyalty. Arif Ehsan, Associate Director - Digital Marketing at Shopclues, an Indian e-commerce marketplace, believes that mobile is absolutely essential to businesses everywhere: “Mobile is our bread and butter - almost 90% of the business is mobile. Apps and mobile sites are both crucial for us. Everything new that we're trying to do is built on mobile and built for the future. The problem with mobile web is the funnel - the experience is not that great, people have connectivity issues, and this creates further problems. The repeat rate that I would see on app is almost 5-6 times of what I get on my mobile site. The focus for me is app, while trying to build and bridge the gap between mobile web and app. So we're working on two fronts here.”

Vishwanath, CMO, Voonik, weighed in on the differences between mobile apps and mobile websites and urged brands to build better apps than stick to mobile sites. “When I look at Google Analytics, the mobile site looks easier on acquisition while the app has a lot of friction - the fact you have to download it creates a natural barrier.”

“I think companies should seize the opportunity to build a good, differentiated product on the app which helps to solve the category problem. I see most apps as locked in mobile sites. They are the same, except that you have a login so they can track you. But I’d love to see product innovations that which allow for a better category experience. This could be via personalisation or via better visualisation. This is where the next product opportunity lies.” - Vishwanath, CMO, Voonik

Seema Chawla, CMO, Ajio agreed that there are untapped opportunities in apps. “The app forms the lion's share of what we sell. However, our research shows that some female consumers and repeat users prefer to sift and keep adding to cart on mobile, but do a final checkout on a tab or desktop because they might want to see it on a bigger screen. From a marketer's perspective, we do want to get to a point where we can make that a truly personal experience, because when it's sitting on a personal device, then the expectation is that you'll know me because I have let you into my digital home. That's what we're working towards at Ajio.”

“Mobile has become the key facet of anybody's browsing behaviour - a vast majority of our business comes from mobile. Even though our focus has been on websites, we realised last year that there is a great opportunity to be seized with apps. A huge part of customer engagement is coming on app first then to website, and we see it as a key growth component for us and we will continue to adapt to challenges in this new environment.”, said Naman Gupta, Head - Digital Revenue & Retention, Zivame, a women’s e-commerce marketplace based in India.

Aishvarya Chanakya, Vice President of Marketing, Furlenco, shared her company’s experiences with mobile sites and apps: “We did both a mobile site and app, and found that the mobile site always converts worse than your app. We also found that exact copies of the app on a mobile site perform worse. For us, app installs mean that we get more loyalty. Our subscription management gets that much stronger, and we have a connected bunch of consumers we can keep talking to. Apps are a loyalty retention tool, which is not the case for one-time acquisition kinds of businesses.”
Although Furlenco and the leading digital marketers at Criteo Exec Connect India saw great opportunities for sales, reach and retention on apps, they reminded professionals to take an omni-channel approach. Aishvarya added: “Desktop behaviour is still fairly high – while 40% of our sales come from our app, almost 50 percent of our business is from desktop. We find that desktop behaviour still exists and maybe it's the nature of our shoppers as well. Our app converts phenomenally. It's the best asset that we have. In which case – should we buy desktop traffic or mobile traffic? Mobile traffic is way cheaper and easier to buy, but desktop traffic is more expensive simply because your pool of competition is higher in desktop, and the audiences who are accessing desktop are diminishing at this point of time. We always have to strike that balance.”

Alokedeep Singh, Head of E-Commerce & Digital , Titan Company, also believes that an omni-channel approach is key. “We are seeing customers getting used to even buying big ticket items like watches and jewellery on mobile. We don't have an app yet, but we have a separate mobile site. Jewellery at Titan is a very involved category and sees a lot of multi-device use. Consumers now buy watches, jewellery, accessories, perfumes with the same ease on mobile, however the desktop isn't going away in this category.”

To Rajiv Kondal, Director of Digital Marketing, RedBus, the mobile site is still very relevant as it is the perfect platform to reach consumers on lower end mobiles. “For RedBus, more than 65 percent of sales are mobile, and out of that 80% is app driven. Apps have been the focus for us on the last three years, but for the next wave of growth, what we've realised is that mobile is the channel of discovery for new users. We are trying to reach users who have lower speed connections and lower end devices which are not optimal for apps. Mobile web is acquiring certain importance in terms of discovery - the idea is to reach tier 2, tier 3, tier 4 cities in India.”

In this new age of Mobile and Omni-channel marketing in India, measurement is key

While the leading digital marketing professionals at the roundtable agreed that an omni-channel approach is the best way to move forward in India’s changing landscape, they also reiterated the importance of measurement.

Hitesh Malhotra, CMO, Nykaa believes that understanding customer behaviour through data is key to improving customer retention. “Looking at the app, and customer behaviour around the app, is very important. There are two gaps in understanding today. Firstly, what is the motivation to the person to download the app? Secondly, what is the sales pattern? Buying in-app is easier than buying through a mobile site, and mobile is the only internet device for some. The harsh reality is that no matter who you are - even if you are Amazon, if you are no good and offer a bad experience on mobile or app, people will uninstall you.”

Rajiv Kondal, Director of Digital Marketing, RedBus commented: “The idea is to capture the shopper at the right moment. Whether it’s getting the audience surrounded, whatever analytics or marketing tools you're using – you are basically ensuring that you have a wide-reaching re-engagement programme for the people who are in market but you're not able to convert yet. I think there are a lot of finer points to it than before.”

“As a digital marketer, I think attribution is the first piece of the puzzle you have to figure out. Without that, you can't start. If I’m a brand, it would be invaluable for me to be able to understand and target users who have interacted with my brand across many other marketplaces. I’m not sure how we can manage this with the data sharing policies implemented by various marketplaces right now, but to have that ability to retarget users across various platforms would be absolutely invaluable.”, said Nikil Parachure, Head-Digital, Ajio.

“People are comfortable on mobile - that's a given. What you need to figure out as a marketer – especially as a performance marketer - is to be able to attribute where and how that conversion happened. The same customer who left the product on the cart on the desktop may end up finishing the purchase on the mobile and vice versa. We talk about multi-device behaviour, we talk about content across different devices. At the end of the day, it’s crucial for to measure our spends on customer acquisition” - Alokedeep Singh, Head of E-Commerce & Digital , Titan Company

Key Takeaways: Collaboration and Commerce Marketing are the keys to success in this age of Mobile Disruption

The impact of mobile has significantly affected the e-commerce market in India, and companies all around are feeling the change in audience habits, behaviours and preferences.

Despite the challenging landscape, Criteo Exec Connect Bengaluru emphasised valuable insights for success in this new, hypercompetitive age of shopper marketing. Key takeaways include:

• The need for flexibility: Brands must prioritise flexibility and openness to adapt to this new shopper marketing landscape, in order to stay competitive.

• The importance of loyalty and retention: Although new technologies make it easier to acquire customers, marketers must invest in loyalty and retention to be successful, or risk being left behind as consumers jump to better options.

• Omni-channel is key: Regardless of the ongoing debate between the effectiveness of app, mobile sites and other platforms, they all play a big part in Omni-channel marketing – something that marketers must prioritise for ongoing success.

• Understanding consumer behaviour: There is a wealth of untapped opportunities in consumer insights hidden in these channels. Having the right tools to measure and understand consumer behaviour is instrumental in helping marketers reach and convert their target customers effectively.

However, the true key to success in the ever-changing mobile landscape in India is not just through technology, but closer collaboration. The leading marketers that took part in Criteo Exec Connect India believe that brands, marketplaces, and retailers all around must work with commerce marketing partners - who are in sync with the ongoing developments in the Indian market – to truly succeed in performance marketing.

“In a cluttered retail market, brands need scale and personalisation to compete on an equal footing with their competitors. To do so, they must tap into an open commerce marketing ecosystem and use technology and data analytics to help shoppers find products which they want and need.” - Siddharth Dabhade, General Manager India, Criteo

“In a world of butterfly consumers with shrinking attention spans, Criteo’s intelligent retargeting doesn’t just help hold their interest for longer. It also ensures that brands are visible only to those consumers who have shown interest at that moment. It does this without pestering or intruding and with scale and minimum wastage which is what every marketer wants.” - Mohit Hira, Strategy Consultant, Internet and Mobile Association of India.

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