With over 10 million online shoppers (even though it’s already massive, it is just 8% of the population, leaving scope for further rapid growth), and the business expected to explode to 35 Billion USD by 2015, it is no wonder that eCommerce companies in India are mushrooming faster than the dotcoms of the early 2000 boom era. Then why is it that more than 100 eCommerce companies, out of the 200 odd that got founded last year, have gone bust?
Is the eCommerce segment going the way most of our malls are – glitzy stores, low footfalls, and inevitably, shutdowns? While the big boys are seeing action – riding on the millions spent on eye-catching advertisements, huge discounts, free shipping, cash on delivery and no-questions-asked return policies, their health and long term sustainability are under question.
With the focus on low prices and mega discounts, this is not surprising. The customer today may not know it, but his real benefits lie in the convenience and accessibility of eShopping, not the prices. India’s tier 2 and tier 3 cities, and the rural majority, do not have access to the glitzy malls and shopping arenas of our larger cities. But there is money, and there are aspirations, driven by much larger exposure to the world. Unlike when we were kids, we now know what is out there. And we want to buy. And if the eCommerce portals can get their distribution channels oiled – and maybe even share them – there is a huge market out there for all the cool stuff that has hitherto been accessible only to the well-heeled tier 1 upper middle class.
And for this market, it has very little to do with low prices.
It is about engagement. As a customer, does the eCommerce portal reach out to me, understand my unique needs, and engage with me at a personal level?
The 4A model of user engagement (Aware, Active, Addicted and Amplified) should form the basis of customer engagement, not just for eCommerce sites, but really any application, workflow or portal that works with real people (yes, we still haven’t figured out how to gamify bots!). Unless you can measure the engagement scores of your customers, on an individual basis in real time, and emit the right signals that connect with the customer, your portal is unlikely to be the preferred destination for your customer, unless you are the lowest in price.
When seen in conjunction with the CARS model (Consume, Act, Return, Share), it is easy to understand why customers are being pushed away. When I land on your site through your Google Ads, I am only an Aware customer, and at this point, you need to let me Consume. Blanking out the site and requesting me to login to Facebook, is the online version of demanding that I swipe my credit card on your billing counter, before you let me browse the merchandise in your store. No wonder, 98% of customers are bouncing off without buying anything – and in many cases, without even bothering to window shop on your portal!
In my opinion, the real challenge is being able to figure the customer’s engagement score in real time,and respond accordingly. Remember, depending on the product the customer is looking at, an appropriate response signal from the site may not always need to be immediate. When browsing for car and bike deals, for example, a customer is not likely to make an immediate purchase, and offering an on-the-spot discount may not add as much value, as offering pickup of documents and free home delivery of the vehicle, in a follow up email in 1-2 days. When buying grocery, any immediate “bargain” discount will help convert the customer quickly.
As part of my job, I have talked to dozens of eCommerce portals about their loyalty program. Sadly, but not surprisingly, most of these believe that offering a discount voucher is all that is needed. Loyalty rewards is not just about discounts. A carefully designed SAPS-based rewards program offers customers the Status, Access & Power as a valued customer, and can go a very long way in breeding loyalty and stickiness.
With so much social data available on the Internet today, it is unpardonable if your eCommerce portal is not able to use that to engage with your customer, and incentivize her to buy more, not only for herself, but for her friends, family and social circle! While most social networks allow applications to read programmatically likes, dislikes and other demographic information about their users, the challenge is to respect privacy and data confidentiality, making an onboarding process very critical in the user engagement lifecycle. On a technical front, unless you are willing to throw millions on iron, the ability to smartly use big data and NOSQL applications is critical for the success of any social recommendation capability.
As more and more eCommerce companies join the bandwagon, SEO will have diminishing returns, and portals will need to find unique ways in which to connect to individual customers. A SAPS-based Loyalty Program, focus on Engagement Analytics and Social Recommendations, and a conscious move away from discount-based attractions, will serve well!
About the Author: As CEO of eMee, Persistent’s unique game-based engagement platform, Siddhesh is pioneering the use of social networking and gamification in helping eCommerce business engage with their customers, using the four pillars of engagement analytics, sentiment analysis, social recommendations and loyalty & rewards programs.