Tag

e-commerce

Browsing

E-commerce marketing – the practice of converting website traffic into sales – is simple in definition. But shoppers, digital platforms, and algorithms evolve constantly, and so must your strategy. Studies claim that 95% of purchases will be made online by 2040, and online shopping already accounts for 10% of retail sales in the U.S. alone. The numbers leave it crystal clear: brands can no longer afford to avoid the digital marketplace.

For the most part, brands are embracing the opportunity – there are 12-24 million e-commerce sites online, and according to eMarketer, e-commerce sales are expected to hit $27 trillion in 2020 (Note:
COVID-19 impact on consumer behavior will substantiallz accelerate this trend). But to succeed, brands must be strategic and consistent about e-commerce marketing, and how they use the tools that the digital era affords them.

E-commerce marketing involves balance of paid, unpaid efforts

In contrast to shopping in person, e-commerce offers customers a far more personalized, convenient experience. It gives shoppers access to almost any type of product from anywhere in the world and, similarly, gives brands access to platforms with a global reach and a myriad of tools to empower their brand. A recent study found that the #1 reason people shop online is that they’re able to shop at all hours of the day.

Putting your products in front of the right audience requires a balance of marketing efforts that can generally be broken down into paid and unpaid efforts. Unpaid strategies involve drawing the right audiences to your brand “organically” through campaigns that generate audiences and sales through offering relevant, captivating content. SEO falls under the unpaid category as well, enabling better search rankings for those willing to navigate search engines’ ever-changing algorithms.

Paid media typically involves buying a space for advertising across different digital platforms. Common formats include display ads, banner ads, and sponsored ads, and they typically live on platforms like search engines (Google, Bing), social media (Twitter, YouTube, Facebook), and typical websites.

Brands must be thoughtful about how they employ a mix of paid and unpaid marketing strategies, responding to their target audiences’ online preferences and behavior.

E-commerce shoppers are global, young, and skew female  

While each brand is responsible for understanding the particularities of its target audience, statistics on global e-commerce shoppers reveals a number of notable trends. E-commerce is increasingly global:cross-border e-commerce now accounts for 20% of total global e-commerce.

E-commerce is also increasingly generational: A recent study found that Millennials and Gen-Xers spend 50% more time shopping online than their older counterparts: 6 hours versus 4 hours, respectfully. And 67% of millennials and 56% of Gen-Xers prefer to shop online versus in a brick-and-mortar store. Breaking e-commerce down by gender reveals another interesting trend: Men spend 28% more than women shopping online.

Social media continues to drive effective e-commerce marketing

It’s no surprise that today’s social media platforms offer brands a myriad of ways to connect with today’s shoppers. While they can be selective about which platforms they use based on their audience and goals, those that forego a social media presence altogether are missing out. A recent study found that brands with a social media presence experience sales that are 32% higher than those that do not. This when considering the results of a study that revealed that 74% of consumes rely on their social media networks to make purchasing decisions.

Luckily, brands can turn to data to inform their decisions surrounding which platforms to invest in. For example, Shopify reported that the average order value for customers referred from Instagram is $65.00, followed by Facebook ($55), Twitter ($46), and YouTube ($38). Brands are already spending big money to promote their products on social media: eMarketer reported that Worldwide ad spending on Facebook and Instagram combined will reach nearly $95 billion annually in 2021. But other platforms are growing, too: The number of marketers sharing video content on LinkedIn is set to rise to 65% in 2021, for example.

Email marketing allows brands to be proactive in reaching audiences

While consumers actively seek compelling content from brands on social media, email marketing allows brands to initiate a kind of proactive engagement that keeps them top of mind with their audiences.

E-Commerce Marketing Study
Wolfgang Digital, “Ecommerce KPI Benchmarks 2016”

A recent study found that email marketing contributes to 20% of traffic that drives eCommerce sales, and OptinMonster reported that email marketing yields $44 for each $1 spent for a 4400% ROI.

Smart brands use a number of tactics to take full advantage of email marketing. Segmentation – diving groups of consumers into groups based on common characteristics, traits, or behaviors – is key to ensuring that the content a brand delivers its audiences is relevant. Depending on who they are and what they are looking for, consumers will seek different kinds of information and products during their buying journeys. Campaign Monitor reported that segmented campaigns to email subscribers drive a 760% increase in revenue.

 Shoppers increasingly turn to mobile for online shopping

An essential element of any e-commerce marketing strategy involves recognizing the different devices that shoppers use. 85% of customers start a purchase on one device and finish it on another.

Today, a significant portion of e-commerce activity occurs on mobile devices. This is true for all stages of the journey: 93% of Millennials have compared online deals using a mobile device. Shoppers even turn to their phones while in physical stores: 65% of consumers look up price comparisons on mobile while in a physical store, and 32% of shoppers changed their minds about purchasing items after checking out product information on their mobile devices within a physical store.

E-Commerce Marketing Study
Source: Outerbox

They feel as comfortable making important purchases on mobile as they do on desktop devices: In fact, conversion rates from mobile apps are 3x higher than mobile websites, and 40% of all online purchases made during the holiday season are done on smartphones.

What does this mean for e-commerce marketing strategies? Most importantly, brands must design mobile-friendly websites. 73% of consumers will switch from a poorly designed mobile site to one that makes purchasing easier, and people who have a negative experience in your mobile store are 62% less likely to purchase from you in the future. Brands that want to take it a step further can engage shoppers on brand or company-specific apps. According to a study from Invesp, 53% of smartphone and tablet owners will shop on company-specific apps.

AI set to transform shopping experience

While AI is still a nascent technology, it is quickly becoming a useful tool in e-commerce marketing strategies. It is primarily useful for deriving insight from large volumes of data. This is particularly relevant for e-commerce marketers that want to find patterns in shopping behavior and form a 360-view of customers as they give us clues about their preferences through interactions and engagements with your brand.

AI is also immensely useful in delivering better customer experiences. Chatbots represent one of the most popular applications for AI today. While nothing can fully replace the human touch, shoppers are starting to recognize the value that AI-powered customer service tools offer. A recent study found that almost half of consumers are open to the idea of purchasing an item from a chatbot. 57% are interested in getting information sent to them by a bot when visiting a business’s website.

What not to do: additional fees, complicated checkouts 

Shoppers go online for convenience, and if they can’t find what they want easily, or if it won’t be delivered efficiently, they are likely to abandon their journey with a brand. According to a study by Metapack found that 45% of online shoppers abandon their carts when they are unhappy with delivery options, and 69% feel the same about shipping fees.

Similarly, complicated checkout processes, websites that load slowly, and sites that aren’t optimized for mobile will leave the site without making a purchase. The consequences for this can be drastic: 73% of consumers will leave a site if it isn’t mobile friendly.

But there are ways to bring users who abandon back in. Email recovery strategies allow brands to send emails reminding users to return and complete a purchase. They are surprisingly effective, with a study claiming that almost half of recovery emails are opened, and that almost a third incentivize a sale.

Smart e-commerce marketing means automation, personalization, and convenience

Online shopping habits will continue to evolve as technology enables more and more ways to make e-commerce easier, faster, and more personalized. Smart brands can win in this space by staying attune to the devices and platforms that people are using, using technology to complement (and sometimes replace) the human touch, and building the tools to keep transactions as smooth and seamless as possible.

 

We talked to Yocelin Delgadillo, Media Manager Victoria and Premium Brands at AB InBev during her participation at AdWeek Latam. We discussed new digital strategies for Mexican brands, particularly how marketing for Modelo and other beers has swiatched to digital. In addition, she told us all about partnerships with fairs and festivals, e-commerce, and the company’s plans for streaming entertainment platforms. 

 

E-Commerce and New Digital Strategies

What’s your on and offline media mix?

This year, we’re becoming a digital-first company for the first time ever. This doesn’t mean 100% of our budget goes to digital, but rather that we’re growing in the digital space. For some brands, a digital-first media mix means 60% of their budget goes to digital. This varies throughout our portfolio, but we have many new digital strategies.

For some brands, a digital-first media mix means 60% of their budget goes to digital.
Beer House Caption

Strategies for Stella and Michelob Ultra, brands in our premium portfolio, are very digital and e-commerce-focused. Actually, Stella has a very strong e-commerce perspective. It’s one of the best-selling brands in our e-commerce platform Beer House.

How did you launch and reinforce e-commerce?

The key to enter e-commerce was communication with retailers such as Rappi, Amazon and Mercado Libre. We have entire teams devoted to our relationship with them, designing promotions and creating brand awareness in those platforms. We know we must take awareness as a starting point in order to speed up the funnel. It’s even more efficient in Mercado Libre and Amazon, for instance, because the purchase takes place right there.

Every single piece of digital content of ours contains a call to action. Not all of them are necessarily related to sales, but we redirect users to websites that are mainly devoted to sales. We rarely send any traffic from a branding site to see more content. “If you’ve seen Vicky Chamoy and you’re already interested, you can buy it here.” You click on the CTA and it’ll take you to Beer House or Modelorama to get the product. That’s one of the pros of having our own e-commerce platform in house. We can estimate, optimize, and actually measure sales.

That’s one of the pros of having our own e-commerce platform in house. We can estimate, optimize, and actually measure sales.

Sponsorships of Fairs and Festivals

Tell us a bit about brand presence in festivals like Corona Capital and Flow Fest. 

I’m in charge of four brands: Michelob Ultra, Modelo, Stella Artois and Victoria. Therefore, I need to be very aware of the perspective and muse of each brand. Each brand has a very different target. However, we have them well defined, and that helps us understand what works and what doesn’t, as well as to design new digital strategies for them.

Each brand has a very different target. However, we have them well defined.

Yocelin Delgadillo, Director of Integrated Marketing Communications, AB InBev.

On the other hand, experience marketing has become a platform to showcase all the Modelo brands. Before, you wanted to buy beer at the Corona Capital festival and they only had Corona. Now, Corona is the headliner, but Stella has a VIP bar, or BudLight headlines EDM festivals in the North of the country, but Corona is always there. Now we have full portfolio presence instead of just activating one brand. We’ve been there since 2019. All these experiences have also become perfect sampling occasions (for new products). Fairs are very important sampling points for our new Chamoy line. Victoria is the main brand, but we want to launch the Chamoy variety and that’s where consumers can try it.

How do you manage to get your message across at festivals, which involve so many different sponsors and brands? 

We have an advantage: our experiences team is part of our media area. The name of that whole department is “Connections”, and it’s in charge of all connections with consumers ranging from advertising to events. Because we’re in the same area, we speak the same language and are aware of the same strategies. Actually, at the Experiences team, when we work with OCESA and other organizers of art festivals we try to close deals that are not simply about being another sponsor looking for naming. We want to get involved with the experience, we want to sponsor a stage that receives music that resonates with the brand. 

We want to get involved with the experience.

They know we’re more than just a company that wants its logo on the poster. We want to be a part of the experience. Our advantage is our long relationship with them, they know our message by now.

A Slice of the Streaming Cake

AB InBev e-commerce

What is the marketing team focusing on most intensely at the moment?

Everything related to data. We have a new data expert entering the team who’ll put together campaigns based on first-party data. I think personalization at scale is crucial, it’s one of the area’s KPIs, and a great percentage of our digital impressions are segmented according to affinity instead of just ethnographic information. Also, our business intelligence team sends us daily reports. Together with the agency, we’re constantly monitoring asset performance per audience. We prepare a specific briefing per audience for each campaign.

We have a new data expert entering the team who’ll put together campaigns based on first-party data.

Another new thing is that we have someone dedicated to entertainment, looking at how we take part of series and movies. It’s going beyond product placemant. The question is, are we truly participating in entertainment in an active way? We already have an important relationship with Netflix and Amazon Prime, where our products play an important role in the story.

What changed in the consumer to make you enter those platforms?

People decide what they want to watch. It’s no longer a matter of choosing between open broadcast and cable TV. Many people watch content on Youtube, Hulu, Netflix. If we want our message to reach them, we have to migrate to where they are. Streaming platforms don’t want us there, so it’s interesting how we create a relationship with content creators so that they make us a part of their stories.

If we want our message to reach them, we have to migrate to where they are.

Coronavirus Crisis

In the interview with Delgadillo, we didn’t specifically address the branding difficulties that have resulted from the Coronavirus pandemic. However, other media have discussed the confusion and consequences for the Corona brand.

Even though it could seem obvious that the virus isn’t in any way related to beer, AdWeek reports that between January 26 and February 1, Google Trends registered an important increase in searches such as “beer virus” and “corona beer virus”.

So far, the company behind the Corona brand hasn’t said anything about the subject. On the other hand, social media has created a series of memes to make fun of the confusion. AB InBev has not withdrawn from partnerships with important events such as Corona Capital, scheduled to take place in Guadalajara in May and later on in Mexico City.

The COVID-19 pandemic has started to affect consumer behavior and confidence.Therefore, this week we have prepared a roundup of coronavirus insights. A summary of the most relevant consumer behavior research. If you’re trying to keep up with the latest happenings, this is your one-stop-shop. Check out the previous consumer insights roundup here.

 

Coronavirus Insights

  • According to recent data by Morning Consult, consumer confidence has drastically fallen in the U.S., Japan, Germany, the U.K., and France. The Morning Consult ICS (Index of Consumer Sentiment) in the U.S. is 108.99 as of March 13, decreasing 0.9% from the day prior and down 4.63% since January 1. This represents the largest single-day drop in over two years. “Consumer confidence drives more than two-thirds of activity in the largest economy, so it can have sweeping effects across sectors,” reports Morning Consult.

 

Online Shopping Behavior

  • Predictive retail analytics platform Quantum Metric has published research about the effect of the new coronavirus on e-commerce in the U.S. Online retailers have reportedly experienced a 52% growth rate in online spending during the fifth-eighth weeks of 2020, compared to the same weeks of 2019. These weeks span Jan. 27 – Feb. 23, 2020, the period when the virus started spreading rapidly from Asia.  In addition, online conversion rates rose 8.8% year-over-year during those same weeks in 2020.

 

  • According to Adobe Analytics‘, which tracks sales of 80 of the top 100 online retailers in the U.S., online sales of items like hand sanitizers, gloves, masks and anti-bacterial sprays soared 817% in January and February compared to the previous year. Consumers are also buying more drugs and non-perishable items: sales of cold, cough and flu products went up 198%, pain relievers jumped 152%, toilet paper grew 186% and non-perishable goods such as canned goods went up 69%, all compared to the same period last year. The same is happening in physical stores; for instance, Walmart will be reducing open hours to be able to restock.

 

General Attitudes and Spending

 

  • Internet media company Travelzoo has conducted a survey among U.S. consumers to learn about their travel intentions. Among the survey’s main findings, Travelzoo announced that astute travelers are still eager to travel both internationally and within the U.S. In spite of current concerns, many of them recognize now is the time to take advantage of remarkable travel deals. In fact, 44% of respondents stated the coronavirus hasn’t changed their interest in international travel. However, 36% of respondents said the coronavirus has impacted their planned international travel. Among those participants,  59% are considering selecting an alternate destination, postponing the trip or canceling the trip.

 

  • Seattle-based payments processing company Gravity Payments notes there has been a dramatic drop in spending around Washington in the past three weeks. “Just this week we started analyzing the data and found an overall 10% drop in business in Washington State (concentrated in the Seattle metro area),” writes Brooke Carey, a company spokesperson. The largest drops have been in hotel spending (down 56%), movie theaters (46% down), liquor stores (-31%) and restaurants (-29%.)

 

  • GlobalWebIndex has shared recent coronavirus insights. Currently, only 20% of survey respondents are concerned about the impact it will have on their personal finances (dropping to 12% among Gen Zs). Almost 90% of Gen Zs have made changes to their daily routine, dropping to 75% among baby boomers. Some 40% are reading the news more frequently in order to stay up-to-date, compared to just over 25% checking social media more frequently. Increased news checking is fairly consistent across generations, while checking social media more frequently drops dramatically among baby boomers. A quarter say they’re now shopping more online in light of the virus. Millennials (39%) are much more likely than any other generation to say this, followed by Gen Xers (29%). Higher-income individuals are also significantly more likely than lower earners to say this (48% vs. 15%, respectively).Check out: How will coronavirus impact marketing? 

Short term it will likely have an impact and it may also  accelerate trends that are already under way. How will the coronavirus impact marketing? Four things to take into account.

1. Short term: Uncertainty and Risk Aversion…

The coronavirus may soon be contained and ultimately not have a major impact on economic activity levels, similarly to the 2003 SARS outbreak and the 2014-2016 Ebola outbreak. In the short term, however, things are likely going to get worse before they stabilize. That’s because virus outbreaks, by definition, initially have a very high growth rate of positive cases.  Uncertainty rules.  “I think the reason we were not specific was just because I think at the moment, it’s really just unknowable,WPP CEO Mark Read, said during the company’s earnings call last Thursday February 27, when asked about the business impact of coronavirus on WPP’s China business. “It’s more unknowable today than probably it was Friday, if we had this meeting Friday of last week, we may [have] given you a different answer then we give you today.” As COVID 19 cases grow outside of China, the uncertainty is also increasing in the rest of the World, including the rest of Asia, North America and Europe (the main marketing hubs).
Not surprisingly, all major agency holding stocks have taken hits along with the broader market last week. With WPP’s shares falling 15%; IPG is down 5%; Omnicom is down nearly 4%; Dentsu Aegis fell 2.5%; and Publicis Groupe down 5.6%. In the real economy,  global tourism and retail have been hit particularly hard, as Chinese tourists provide a major source of income for many markets.

2. Coronavirus Impact on Marketing: More emphasis on Virtual – Digital Marketing

In the short term companies are starting to restrict travel and encouraging remote work (e.g. Amazon told its employees to avoid all non essential travel for now including within the U.S.) Facebook, on its part,  last week cancelled a global marketing conference in San Francisco’s Moscone Center. Activations and sponsorships at live events may be impacted negatively as marketing, including event marketing will become more virtual. This is not good news in a year where analysts were expecting to see an uptick in media investments from marketers eager to capitalize on events like the 2020 Tokyo Olympics.

The virus may also accelerate a trend that was happening anyway. Executive meetings and virtual events over hangouts will increase. For an example check out Portada’s Council System of brand marketers, which conducts 12 brand decision maker virtual workshops a year.

3. Driver for E-Commerce…

In parts of China, major retailers like Starbucks, Uniqlo, Nike and Apple have temporarily shuttered their stores, while small and medium-size retailers are being hit particularly hard as foot traffic dwindles. This may happen in the U.S. in areas that have been particularly negatively affected by the outbreak. Reduced in-store activity will be a driver for increased e-commerce activity and e-commerce marketing. The big caveat here is if the outbreak creates serious supply chain issues (at producers, shipping and overall logistics e.g. Apple and Microsoft warning of supply chain problems last week), therefore limiting the amount of goods that can be purchased by online buyers.

…particularly Online Grocery…

Housebound consumers in China are turning to online groceries for their daily food supply. According to French retailer Carrefour, vegetable deliveries increased by 600% year over year during the Lunar New Year period. Chinese online retailer JD.com reported that its online grocery sales grew 215% year over year to 15,000 tons during a 10-day period between late January and early February. Concerns about food delivery due to possible food contamination have spurred recent innovation in contactless pickup and delivery services by companies such as McDonald’s and Starbucks. McDonald’s has implemented contactless pickup and delivery of Big Macs, fries and other menu items across China as the outbreak has unfolded. Customers order remotely – on mobile phones or by computers in store – and employees seal the meals in bags and put them in a special spot for pickup without human contact, McDonald’s says on its website.

4. Coronavirus Impact on Marketing: Boost to At-Home Entertainment, Video Streaming and Gaming

If employees are forced to stay at home more, it will also impact how consumers spend their leisure time as they may have to avoid public gathering spaces, like movie theatres, concerts and gyms, leaving more time for them to binge on home entertainment and video services. Advertising revenues of companies that heavily bet on video content and advertising ,e.g. Roku, Youtube, Netflix and others should benefit from a public that’s stuck at home.

Disney VS Netflix, consumers’ thoughts about Amazon, and retail marketing insights. A summary of the most relevant consumer insight research. If you’re trying to keep up with the latest happenings, this is your one-stop-shop. Check out the previous consumer insights roundup here.

 

  • There doesn’t seem to be a clear winner in the Disney VS Netflix fight yet. According to a new survey by Piplsay, half of Americans surveyed said Disney Plus is “as good as” Netflix. On the other hand, 28% said it’s not as good, while 23% said they think it is better. In addition, 37% of respondents said Disney Plus is better than Amazon Prime Video and Hulu. Also, about 42% said Disney Plus is as good as Hulu. Finally, 40% said Disney Plus is as good as Prime Video.

 

  • A survey by Convey of 2,000 U.S. consumers indicates a good amount of people don’t really like Amazon but shop there any way to get free shipping. The survey found that 24% of those surveyed had negative views of Amazon’s impact on the retail industry. In a similar way, 27% felt “very or somewhat” negative about the company’s effect on the environment. However, 21% of those respondents who worried about Amazon’s impact on the industry still bought half of their goods on its site. About 24% who thought Amazon’s practices are damaging to the environment also bought half their stuff there. 

 

  • According to the “State of Consumer Behavior Report 2020” from Raydiant, 69% of respondents said a good in-store experience is either important or very important to them. Almost two-thirds (62%) find store associates helpful. More than half (57%) of respondents said they would go to physical locations for exclusive discounts, but 23% said they would care for unique experiences. More than 68% of respondents searched for a better price online after finding a product at a physical store.

 

  • A survey of more than 2,200 U.S. adults from Morning Consult and PRWeek found 41% of Millennials like when brands show their commitment to social causes. However, 39% think companies are trying too hard to make it look like they care. About half (46%) of Baby Boomers and Gen X feel (42%) feel that companies “try too hard”. Finally, 35% of Boomers and 33% of Gen X like brands that “show off their commitment.”

 

  • A new report from agency Boston Digital titled ‘How Brands’ Social Media Impacts Consumers’ that surveyed 554 respondents found brands need to be entertaining online. Two thirds (65%) of consumers say they are more likely to purchase from a company they’ve followed for a month. More than half (54%) are ‘very’ or ‘extremely’ likely to look at a company’s social presence while researching a product. However, more than half (51%) said content needs to be relevant to them.

 

 

With nearly 95% of shoppers reading online reviews before making a purchase, reviews have transformed the way consumers make purchase decisions. According to a study by the Bazaarvoice network, one product review can result in a 10% increase in sales and 200 reviews can result in as much as a 44% increase in sales. We talked to two brand marketers whose businesses are mostly e-commerce driven about the way they use and leverage online consumer reviews in their marketing efforts.

 

Review Marketing Basics

Review marketing is a process certain brands use to manage their reputation online. For direct-to-consumer brands, this includes monitoring, encouraging, and responding to consumer reviews across multiple platforms.”We rely on consumer reviews because customers say it better than we can,” says Aireen de Peralta, Chief E-commerce Officer at WaterField Designs, a company that sells custom-fit bags and cases online.

We rely on consumer reviews because customers say it better than we can.
review marketing expert
Michael Montanez

Michael Montanez, Director of Marketing at luxury clothing label August McGregor, notes that “We use yotpo to power reviews for August McGregor as we’re adding to our tech stack to improve KPIs. Reviews are expected these days for RTW (ready to wear clothing). It’s all part of the process. Attribution – we haven’t gotten there yet to determine the impact of reviews.”

 

Trusting Customers, not Apps that Go After Reviews

Waterfield does not provide incentives for customers to write reviews. “We feel it’s more authentic if a customer decided on their own to write a review,” explains de Peralta. “We e-mail customers after a few weeks of shipping their purchase and request for them to write a review. That way, they will have had time to use the product in their daily routine.”

review marketing expert
Aireen de Peralta

Today, there are many apps and vendors that will aggressively go after reviews, offering discounts, points, or loyalty awards. However, de Peralta notes that she doesn’t employ these tactics. “Reviews apps are also complex enough to ask users to rate their experience based on certain criteria. We use just the simple open-ended format because we think this is a better way to capture what our user thinks is the primary reason to give feedback about. Each user has a different experience with a different emotional outcome, and we are more interested in capturing the emotions and understanding what it is important to them, rather than what we think is important to get feedback on.”

We use just the simple open-ended format because we think this is a better way to capture what our user thinks is the primary reason to give feedback about.

 

Attribution

Review marketing is very powerful in driving customers to sales. According to a study of customer restaurant reviews by the Harvard Business Review, “a one-star increase in Yelp rating leads to a 5-9 % increase in revenue.” On the other hand, according to research, if there is an excess of three negative articles within search results, businesses can expect to lose 59.2% of their potential customers.

“We can’t track if a certain review caused a sale, but we do get feedback from customers that reviews have helped them make a decision. This is anecdotal evidence, but it’s enough for us to know that reviews do help sales. We also view reviews as an outlet for our community to express themselves and for product feedback,” de Peralta notes.

 

Boosting SEO and Social and Customer Service

Reviews can also substantially boost SEO rankings since the reviews contain keywords. They are also “proof for social”. In addition, they can also inform customer service as “some reviews answer questions that people have”, de Peralta notes.

 

At the 2019 Portada Event in Mexico City, we had an insightful Q&A session with Germán Villegas, Digital & E-Commerce Manager at Colgate Palmolive Mexico. He shares his know-how for driving growth at the consolidated mega-company, their E-Commerce numbers and investment plans, the future of segmentation strategies, and shares the name of online retailers with innovative tools for marketers.

Interview conducted by Alejandra Velazquez

There’s Always Room for Growth 

Nowadays, consumers look for relatable stories, not product descriptions. Keeping this in mind, we asked Germán Villegas how Colgate Palmolive drives growth for such basic necessities like toothpaste and soap. 

Germán Villegas

“We are touching real, daily consumers by leaving aside the old concepts of “perfect smile” with perfect-looking models. At the Portada Brand Star Committee session (one of the three units of the Portada Council System that met in Mexico City during Portada Mexico), we talked about the importance of reaching diverse audiences, cultures, and minorities to make them feel supported and listened. For example, we’re currently running a campaign that no longer talks about 12 hours of protection, fresh breath, or white teeth. It speaks about positivity. In the ad, a plus-sized woman says “when people say my curves are not attractive, I smile”. We want to transcend Coca-Cola-type messages like “you have to be happy”. We’re focusing on giving visibility to the most effaced members of society. That way, we are much more than just toothpaste. We are an optimistic story.”

Germán Villegas, Digital & E-Commerce Manager at Colgate Palmolive Mexico, will be one of the dozens of brand marketing innovators present at Portada Miami on June 4, 2020. If you are interested in participating in Portada Miami and/or in Portada’s networking and knowledge-sharing platform with brand marketers please contact us here.

We’re focusing on giving visibility to the most effaced members of society. That way, we are mucho more than just toothpaste. We are an optimistic story.

“Growth will happen organically and naturally in time. But beyond expecting things to fall into place, we are experimenting with micro trials now that we can. We are developing segmentation strategies with our clients, learning together about the industry’s ROI, and investing micro amounts. That way, we can learn where to invest more precisely. In other words, we pour money into trials little by little instead of betting millions blindly in the wrong place.”

TV vs. Digital Media: Time to Jump Ship? 

Colgate has always used traditional TV as its strongest media. What are your offline vs. online investment numbers, and has digital won over television? 

We’re closing 2019 with 30% on digital media and the rest is all offline. I believe television is still pretty strong, above 50%. However, we’re trying to invest a little less on TV in 2020. We’re not going straight to digital all the way, but we’re applying our trial and error strategies to see how far we can go, and perform a lot of focus groups to make drastic but informed decisions. 

TV already lost investment this year. I believe the past few years it used to close at 80%, and I think this year it went down to 60%. Next year it might close at 50%. In a few years, there will be very little content produced for TV. The U.S. is already making digital television, which will surely be very attractive to invest in because marketers can program different content for each spectator using digital technology. It might or might not contribute to our television portfolio, but it’s definitely a tendency. “

How do you choose what goes on TV? 

Right now, we’re looking for video production agencies. We’re trying to think digital before TV because we could produce custom-made pieces based on segments. We’ll make many digital pieces for specific targets, and from there we’ll cut a more generic TV ad. We used to make the TV ad and then upload it to the web, but it doesn’t work that way. It’s the other way around. You build a digital strategy based on segmentation. Those measurements help us choose what to show on the much more expensive TV airtime. “

Segmentation Strategies: The Right Message for the Right Ears 

segmentation strategiesTell us more about CP’s segmentation/targeting strategies. Is there room for evolution?

“Massive service providers like Facebook and Google sell us advanced ‘audiences’. These audiences aim to stop segmenting per demographics and switch to consumer attitudes. For instance, no longer targeting “men 30-45 y.o.” and such, but profiles based on passion points. We can segment per sports fans and athletes, music buffs, art followers, etc, and pinpoint a campaign for each. 

We pour money into trials little by little instead of betting millions blindly in the wrong place.

Facebook offers a very interesting product in its portfolio that lets you edit the text of your ad. That way we can sell the same toothbrush by talking about this weekend’s soccer highlights or the newest song from a popular artist. We can write copy as necessary to make it more clickable to the individual seeing it. That’s a great tool. 

A good challenge for future evolution is doing regional segmentation. Since marketing is too separated from the media department, it’s an opportunity for the industry. The brand manager could tell us if sales are decreasing in the south, so we could do our research and see why. That way we could develop specific solutions for localized issues. But right now, we still make advertising for the entire country. “

Shopping habits on and offline, brand loyalty, and mobile technology on fire this 2020! A summary of the most relevant consumer insight research. If you’re trying to keep up with the latest happenings, this is your one-stop-shop. Check out the previous consumer insights roundup here.

 

  • According to a new consumer survey from TD Bank, millennials made nearly four major purchases in the past year on average. In comparison, Gen Xers and Baby Boomers averaged 2.8 major purchases combined. Millennials not only spend more, but they are also more thoughtful about their purchases. According to the survey results, they spend more time, on average, researching major purchases than any other group. Compared to baby boomers and Gen Xers, millennials are also more likely to research products through a retailer’s website, social media, and third-party websites. Also, they’re more likely (39%) to research financing options than their elders (22%).

 

  • The 2020 Deloitte Global Automotive Survey, which questioned more than 35,000 consumers in 20 countries, found U.S. consumers are not very enthusiastic about paying for automotive technology. For instance, 60% of U.S. consumers are unwilling to pay more than $500 for advanced safety technology. In a similar way, 66% of surveyed Americans said they wouldn’t pay for advanced connectivity, 75% for infotainment, 58% for autonomy, and 54% for alternative engine solutions.

 

  • Valassis has released the findings from a study conducted with Kantar, which surveyed 1,000 U.S. consumers about their shopping habits. The study, The Future of How People Shop, found that 68% of consumers believe they have become better equipped to make informed purchase decisions compared with five years ago. Thus, 60% of consumers often research products online before making a purchase, and 62% said they closely read product labels. Many of them also rely on advertising, as 43% of consumers said targeted advertising should be able to guide them through the store to locate products.

 

  • Research by Soti, published by Mobile Marketer, has found that mobile technology is important for better retail experiences. More than three fourths (78%) of U.S. consumers said retailers that implement mobile technology for both shoppers and store employees enable a faster shopping experience. Almost half (45%) of shoppers said they prefer sales associates to use mobile devices for checkout on the sales floor rather than heading to the traditional cash register. In addition, Soti’s data shows 53% of consumers use credit and debit cards, while 23% prefer cash and only 11% use mobile payment apps.

 

  • According to a Criteo study which surveyed over 1,000 U.S. consumers, 73% of shoppers are willing to try new brands they have heard positive things about. Discounts and offers often drive consumers who decide to check out a new brand, agree 93% of respondents. Criteo found 57% of U.S. shoppers rely on apps to look at products and get ideas, 55% use them to check out ratings and reviews, and 58% to make purchases. Overall, Criteo found 52% of shoppers look forward to shopping in stores when they have time. On the other hand, 41% enjoy shopping in stores to understand what’s in style or new, and 37% prefer to do as much online shopping as possible.

 

 

One of the greatest challenges of consumer data collection is the issue of privacy and consent. Today’s consumers are becoming more and more aware of how their information is collected, sold and used for marketing purposes.  How can companies overcome privacy issues and harness this information to deepen consumer relationships? Luis Macin, Nestlé Mexico’s VP E-Commerce, talks about Nestlé’s plans to develop wearables for consumer metrics during Portada México 2019.

Luis Macin, Nestle Mexico, Portada
Luis Macin, Nestlé Mexico’s VP E-Commerce

Interview conducted by Alejandra Velazquez

Problem Meet Solution

Data collection continues to dive deeper into the private lives of consumers and it is only natural that they feel their privacy is being invaded. Audiences find it unnerving when they mention something in conversation only to be offered that specific product online moments later. However, the great thing about wearables is the voluntary data collecting process. When users are nicely requested to share their data, it tackles the issue of consent and privacy. The consumer willingly welcomes a metrics device into the intimacy of their own home and even onto their own body and this is where the true power of wearables for consumer metrics comes into play. 

 

Who Wears Wearables?

The implementation of these devices in Mexico will take off immediately

According to emarketer.com, roughly a quarter of U.S. adults, 56.7 million, will use a wearable device at least once a month in 2019. Just over half of those will use a smartwatch. Furthermore, 3.8 million U.S. children and teens will have a wearable device. The e-health market is booming in Europe and North America, and it won’t take long for the wave to hit Mexico. “The implementation of these devices in Mexico will take off immediately because in Mexico we implement new technologies insanely fast, much faster than in other countries”, says Luis Macin, Nestlé Mexico’s VP E-Commerce.  In 2020, the wearables market will consist mostly of smartwatches, with a strong emphasis on e-health.

 

Offer Relevant Content for Consumer Engagement

But once they’re wearing the device, how can brands collect specific data so they know how to target consumers? 

The challenge is generating enough engagement so they’ll willingly share their information with you.

“There’s a driver behind every behavior, and each consumer has a different driver” says Macin. “You just have to identify their motivations and categorize them. For example, if your goal is physical performance, we’ll offer you the tools to have more endurance. If you’re concerned about your health, we can measure your BPM to protect your heart. The challenge is generating enough engagement so they’ll willingly share their information with you. You have to put the right cards upon the table, and the decision is theirs.” 


Luis Macin, VP E-Commerce at Nestlé Mexico, will be one of the dozens of brand marketing innovators present at Portada Miami on June 4, 2020. If you are interested in participating in Portada Miami and/or in Portada’s networking and knowledge-sharing platform with brand marketers please contact us here.


Nestlé’s Safe Bet on E-Health Products

Nestlé’s R&D is hard at work on e-health initiatives in Brazil, Latin America’s unofficial innovation hub. Monica Meale, Head of Nestlé Health Science LATAM told NutrIngredients “NHSc has strongly invested in digital innovation. In the last three years, the area increased its investments fivefold”. The company’s research focuses on developing market trends including e-commerce driven products and services, digital innovations (VR nutritional education videos as an example), virtual sign language assistants on websites and contests for Nestlé to collaborate with health startups in creating and designing health programs and activations.

Is Wearable Technology Expected To Drive E-Commerce?

Absolutely. As consumers receive custom-made specific information about their care, they will also receive specific recommendations and tailor-made nutrition plans that will drive e-commerce simply because it’s convenient. According to Luis Macin, Nestlé plans to offer users a holistic experience by incorporating themselves into the consumer’s lifestyle through wearable devices. And once they’re engaged in improving their health through the right diet and lifestyle suggestions – Nestlé’s product recommendations are only one click away. Ordering products will be as easy and embedded into their routine as their morning coffee. While we’re not quite at that level of e-commerce maturity yet but the focus on wearables for consumer metric collection and blending this with e-commerce opportunities is projected to be the next big frontier. 

Once they’re engaged in improving their health through the right diet and lifestyle suggestions – Nestlé’s product recommendations are only one click away


Luis Macin, VP E-Commerce at Nestlé Mexico, will be one of the dozens of brand marketing innovators present at Portada Miami on June 4, 2020. If you are interested in participating in Portada Miami and/or in Portada’s networking and knowledge-sharing platform with brand marketers please contact us here.


 

 

Radisson Anápolis, GM Bets on LatAm Market, Fazenda Futuro©´s Vegan Sausages & More Sales Leads LatAm

For prior Sales Leads LatAm editions, click here.

 

  • Radisson Anápolis

Radisson Anápolis: recognized hotel brand Radisson announced the opening of Radisson Hotel Anápolis at Avenida Oscar Mohn, No. 250, Anápolis, Brazil. This upscale hotel is perfectly positioned in one of the fastest-growing cities in Goiás, providing a convenient spot for guests interested in checking out the Brasil Park Shopping, or business travelers visiting companies like Vitamedic orLinea Alimentos. The hotel is also conveniently located near Terminal Rodoviário Josias Moreira Braga bus station and Goiânia Airport (GYN).“Our partnership with Atlantica Hotels allows us to bring the bright, inviting and balanced feel of the Radisson brand into vibrant cities like Anápolis, Brazil,” said Frances Gonzalez, vice president of Operations for Radisson Hotel Group in Latin America.Atlantica Hotels is a licensee for Radisson Hotel Group’s brands in Brazil, including Radisson Blu, Radisson, Radisson RED and Park Inn by Radisson. The two companies have enjoyed a longstanding relationship in Brazil that now includes 16 hotels in operation.

  • Urban Juve 

Health and beauty consumer packaged goods company The Yield Growth Corp. announced that it ships its first products to OMG Colombia, the subsidiary of Organic Medical Growth OMG3 Inc. (“OMG3”) in Latin America, based in Colombia, as part of a 5 year distribution deal for Yield Growth’s Urban Juve skin care line. Today, 1,800 products are being shipped, in partial fulfillment of OMG’s first product purchase order in anticipation of imminent completion of regulatory approval to sell Urban Juve products in Colombia and progressively in other parts of South America.According to Goldstein Research, the Latin America cosmetics market reached a value of USD US$31.98 billion in 2017 and is anticipated to grow at a CAGR of 4.49% during the forecast period 2017-2025.OMG3 is in the process of distributing Urban Juve skin care products in Colombia and other countries of Latin America. Through its Colombian partner Ortix, OMG has access to a distribution channel of over 44,000 pharmacies in South America and has partnered with on-demand delivery giant, Rappi, to sell products through its e-commerce platform. 

  • GM 

US carmaker General Motors has decided to exit Thailand market.The brand will withdraw the Chevrolet brand from Thailand by the end of 2020, and said that China’s Great Wall Motor (GWM) has agreed to buy over its manufacturing plants in Rayong.GM’s co-ordinated retreat is part of the company’s plan to exit unprofitable markets including Europe, while focusing on North America, China, Latin America and South Korea. With the planned sale of its Thai plant, GM has essentially given up on the rest of ASEAN as well, as the Land of Smiles is the company’s regional hub.GM is “focusing on markets where we have the right strategies to drive robust returns, and prioritising global investments that will drive growth in the future of mobility,” especially in electric and autonomous vehicles, GM chairman and CEO Mary Barra said in a statement. 

  • Collinson

Interpublic Group agency Golin announced a new client partner to its international roster. Leading travel loyalty and benefits brand, Collinson, appointed Golin the global PR and communications Agency of Record (AOR), following a competitive pitch. The partnership will be led via a dual hub model from the Golin London and Golin Hong Kong offices, and the work will begin immediately.As AOR, Golin will head up PR and communications for Collinson with particular focus in  Brazil, China, Hong Kong, India, UAE, the UK and the US; with further markets to be activated in Europe and Asia. The agency’s first charge will be to build awareness of Collinson’s integrated expertise in loyalty and travel experience, showcasing the group’s breadth of capabilities under one single brand voice and messaging.

  • Fazenda Futuro© 

Brazilian plant-based startup Fazenda Futuro, recently valued at US$100 million, will launch vegan sausages made with a seaweed skin for crispiness next month. The sausages are made with a blend of pea, soy, and chickpea protein with beetroot added for a “rosy color​”. The products are free from GMO ingredients, food colorings, artificial flavors, or enhancers and the pork flavor comes from natural flavors and spices. They are coated with a neutral-tasting seaweed ‘skin’ that emulates the crispiness of traditional pork sausages.The sausages, which will launch in April in Brazil and the Netherlands, have a 17% protein content and add to Fazenda Futuro’s portfolio of products consisting of its Futuro Burger, ground meat and meatballs.Although Fazenda Futuro is a newcomer – it was founded in May last year – it has quickly made a name for itself in the plant-based category. In July last year, the startup received its first round of investments with Monashees and investment firm Go4it Capital acquiring an 8.5% stake for US$8.5 million. The transaction valued Fazenda Futuro at around US$100 million.The company was founded by Marcos Leta, a Rio de Janeiro-based food entrepreneur and investor. 

JOIN PORTADA’S KNOWLEDGE-SHARING AND NETWORKING PLATFORM: To find out about Portada’s new networking solutions targeting the decision makers of the above campaigns, please contact Sales Director Leslie Zambrano at Leslie@portada-online.com.

  • MasterChef

Endemol Shine North America has appointed award-winning licensing agency Tycoon Enterprises to serve as its exclusive licensing agent for the “MasterChef” television property in Latin America. MasterChef’ is one of the most successful food format in the world with over 60 localized versions across the globe including 10 in Latin America alone.Tycoon Enterprises will expand the “MasterChef” franchise in key categories including food and beverage, cookware and live experiences. Endemol Shine Brazil will continue to represent the brand in their market independently.In addition to “MasterChef,” the partnership will also look to explore opportunities in all categories for Endemol Shine series “¿Quién es la máscara” (“The Masked Singer”), “Te la Juego” (“Deal or No Deal”), “Fear Factor” and “Wipeout” in Mexico. 

We looked at Comscore E-commerce data about the top 15 online retail sites visited by shoppers in the U.S. in September of 2019 and how they scored in numbers of visitors.

Coming after last January’s stellar results, where Amazon’s fourth-quarter net sales jumped 20% over the previous year’s, the online retailer has seen its earnings drop in Q3 of the year by 26%, which might be correlated to the decrease in its first-place position to 20.9% of all visits in September compared to 21.9% in January.

Number of visitors to the Top 15 e-commerce sites in the U.S., September 2019
Total Audience, Home and Work, PC/Laptop (000)149,671
SiteTotal Unique Visitors/Viewers (000)*
Amazon Sites31290
Wal-Mart17851
eBay15950
Apple.com Worldwide Sites11713
Samsung Group10622
Target Corporation9110
WISH.COM8740
ETSY.COM7663
Ticketmaster6854
The Home Depot, Inc.6114
Best Buy Sites5281
Wayfair5139
DOORDASH.COM4736
Macy’s Inc.4339
Kohls Corporation4269

Source: Comscore
*Numbers reported as shown

On the heels of a stellar year in 2018, Amazon got off to a strong start in 2019 as it expanded its share of online visits to its retail site to 21.9% of all visits to the top 15 retail internet sites in the US ranked by Comscore for the month. Since then, Amazon has decreased its share of site visits in the U.S. with 20.9% in September, 2019. Amazon’s leadership in online site visits is still undisputed in spite of the 26% drop in earnings in Q3.

  • Walmart and eBay have kept the second and third spots within the top 15 retail sites in the U.S. ranked by Comscore, with 11.9% and 10.6%of the total amount of visits respectively. 
  • Apple.com continues to hold steady at 4th place in the top 15 retail sites ranked by Comscore.
  • Target, Samsung, Wish and Etsy keep fighting for spots 5 to 8, with numbers that have slightly changed since the January report.
  • DOORDASH.COM has entered Comscore’s ranking with 3.1% of all visits, pushing out LOEWES.COM, which held the last spot of the ranking in January.
  • Retailer Kohl’s continued to suffer a downward trend in its ranking in the top 15 retail sites in the U.S., going from 3.8% of all visits in January to 2.8% in September.

 

What: CommerceNext has published the results of a survey of 100 e-commerce decision-makers, meant to explore similarities and differences in the priorities of traditional and digital-first DTC brands.
Why it matters: The report is meant to be a benchmark that helps marketers evaluate their priorities in terms of how to distribute budget among different technologies and objectives.

 

E-commerce is unpredictable; it forces marketers to be on the lookout for what’s coming next and reacting if only a little bit late can turn out to be fatal. In order to be more ready, decision-makers have to decide what matters more in every step of their strategy, which means having to prioritize investments and objectives. With these challenges in mind, CommerceNext conducted a survey of 100 top marketing executives in traditional and digital-first direct-to-consumer brands.

The objective was to provide a useful benchmark for online retailers to measure their priorities and decide how to distribute budget in the most convenient way. According to the results, even though both traditional and digital-first online retailers point to an increase in marketing budget, digital-first brands are spending way more while also diversifying their strategies. Below are the key insights from the study, titled How Leading Retailers and DTC Brands Are Investing in Digital.

 

Which Investments Did Work in 2018?

In order to compete, marketers need to be quick to decide which investments can help them reach their objectives. According to the study, 65% of respondents said their 2019 e-commerce marketing budget increased over the previous year, while only 10% of marketers are reducing their budget. In 2018, the top marketing investment priorities were acquisition marketing (81%), retention and loyalty marketing (43%) and promotions (32%).

When asked about the results of those investments, acquisition marketing had the highest level of satisfaction rating: 53% of respondents said acquisition marketing met expectations in 2018, and 24% said it exceeded expectations. On the contrary, 52% of respondents said unified customer data (e.g. a single view of the customer) performed below their expectations. Almost the same number had similar levels of dissatisfaction in personalization investments (51%).

Source: CommerceNext

 

What Are the Priorities of Digital-First and Traditional Retailers?

According to the report, consumers have more than doubled the amount of time they spend on DTC brands’ websites over the last two years. Even though all the companies in the study have increased their e-commerce marketing budgets, digital-first DTC brands are spending more: 78% indicated that their 2019 budget is higher than the one they had in 2018, while 60% of traditional retailers said the same.

Because DTC brands are based on data-driven decisions and customer-centric operations, they are growing and evolving at an accelerated pace. As stated in the report: “fueled by venture capital investment, these brands have focused on growth vs profitability.” Therefore, the most significant challenge for this group of brands is “achieving profitability at scale”, with “Managing tech integrations” coming in second, with 33% of DTC brands identifying it as a barrier. This is a side-by-side comparison of what each group considers to be the most significant barriers, extracted from the study:

Source: CommerceNext

How to Make the Best of the 2019 Holiday Season

According to the NRF, the 2018 holiday retail season exceeded expectations. Over 165 million Americans reportedly shopped either in stores or online from Thanksgiving Day through Cyber Monday 2018, and online purchasing, in particular, experienced a 19% increase compared to the previous year. The NRF has forecasted that 2019 retail sales will increase by 3.8% compared to 2018, and the online sales growth rate will increase between 10% to 12%.

DTC brands are increasing their budgets at a higher rate than traditional retailers and spreading that budget more evenly. For example, digital-first DTC brands are increasing their budgets equally (70%) between acquisition marketing and retention/loyalty marketing. On the other hand, traditional retailers are emphasizing acquisition marketing, with 77% of respondents increasing their acquisition budget compared to 64% of traditional retailers increasing their retention budget.

 

 

All images by CommerceNext.

A summary of the most relevant consumer insight research in the U.S. and U.S. Hispanic markets. If you’re trying to keep up with the latest happenings, this is your one-stop shop.

 

  • Accenture’s 13th Annual Holiday Shopping Survey of 1,500 U.S. consumers has found that Americans expect to spend $637 on holiday shopping this year, on average, with approximately six in seven respondents planning to spend either the same (57%) or more (28%) than they did last year. Consumers are expected to do half their purchases in physical stores, with lower prices cited as the top (82%) factor that would tempt them to make an in-store purchase. 

 

  • For the first time, consumers in the U.S. might do more of their holiday shopping online than in physical stores, according to a new survey. In its annual Holiday Outlook, PricewaterhouseCoopers LLP found that 54% of respondents will opt for the convenience of their smartphones, laptops, and PCs, and even in-home voice assistants, compared to 50% last year.

 

  • CGS has announced findings from its 2019 CGS Customer Service Chatbots & Channels Survey. CGS surveyed more than 1,000 Americans and found that 86% of consumers prefer to interact with a human agent. Moreover, 71% of respondents said they would be less likely to use a brand if it didn’t have human customer service representatives available. Only 30% believe that chatbots and virtual assistants make it easier to address customer service issues. However, for respondents under 35, confidence in AI-based solutions reached 43%. 

 

  • Recent research by Deloitte shows that consumers’ tolerance to advertising varies according to the type of shows they like. A new survey which polled 2,000 U.S. found respondents whose most-watched type of show was talk shows had the highest tolerance for advertising  (11.6 minutes per hour), and the ones who prefer scripted comedies or dramas have the lowest  (7.2 minutes).

 

  • According to the National Retail Federation’s annual survey of 7,400 U.S. consumers, 68% of Americans said they plan to celebrate Halloween. Sixty-nine percent declared they will hand out candy, while 49% will decorate their homes and 47% will dress in costume. In total, they are expected to spend US $2.6 billion on Halloween candy, about $25 dollars per person. 

 

  • A recent CodeBroker survey of over 1,100 U.S. consumers on coupon and offer personalization found that sending custom offers to past consumers is a good opportunity for brands. The results show that 73% of respondents answered with a definite yes to the question, “Do you prefer to shop at stores that send you custom discount offers based on your purchase history?”.

 

What: Retailers scramble behind Amazon and MercadoLibre to capture their share of expanding e-commerce in Latin America. This happens despite difficult payment and delivery challenges.
Why it matters: Experts predict e-commerce trends will grow by 19% in the next five years. They see it rising well above the global average of 11%. The lack of brick-and-mortar retail outlets in Latin America actually plays into the hand of e-commerce retailers. That’s because it allows them to offer products to consumers outside of major cities who don’t have many shopping options.

E-Commerce Trends Heating Up

E-commerce trends in Latin America provide no place for the timid. The challenges are well-known. Experts say they include lack of infrastructure, consumers without credit cards or bank accounts, high rates of online payment fraud, and obstacles to delivering product—to name just a few.

But the barriers to success don’t stop leading players. For example, MercadoLibre is diving into the e-commerce market and thriving.

One expert remarks the challenges are “daunting.” But competitors like Linio are finding ways to outperform. They chase what Linio’s General Director Olivier Sieuzac says is a “massive opportunity” in expected e-commerce growth in the region.

Linio has learned it had to expand its online business model. That means beyond just selling product. The strategy now includes things like creating its own delivery fleet. Linio also sells its hard-earned expertise to brands like Aeromexico who create their own online retailing presence.

To succeed in Mexico, Linio built partnerships with VISA to prevent credit card fraud. Consequently, it also joined arms with third-party payment channels. They include the convenience store chain Oxxo. Linio aims to provide the unbanked with cash-payment options.

Mexico, according to Sieuzac, offers the “worst of both worlds.” Mexico suffers high levels of online payment fraud and a low level of cooperation from banks.

As a result, Linio developed a proprietary algorithm with VISA as a response to reduce credit card fraud. Consequently, Linio also now offers its own credit card with a loyalty program. The loyalty program awards cash back on purchases.

Linio also created its own fleet in Mexico to handle the delivery of over-sized items like refrigerators and other home appliances.

Infrastructure, payment obstacles

Lack of infrastructure in Latin America makes delivering product a particularly difficult part of the e-commerce business.

Logistics and related issues amount to 15 percent of the cost of what’s sold online—well above other regions, according to Miriam Dowd, Marketing Manager at FOCUSECONOMICS.

Merchants experience the impact of “limited” access to credit card-based payment methods. Banks often don’t allow debit cards to be used for online payments.

E-commerce in Latin America faces many challenges, the most daunting of which are logistics, traffic, and infrastructure. Regulations and rules vary among countries. Merchants have and limited access to secure, credit-card based payment methods,” Dowd explains.

Online sales are expected to grow by 19% in the next five years. As a result, that is well above the global average of 11%. They are foreseen to double in value to $118 billion in 2021.

But on the positive side of the ledger, experts say market penetration is low compared to other regions. As a result, that represents lots of opportunity. Consequently, the market also offers higher growth rates.

“Online sales are expected to grow 19% in the next five years – well above the global average of 11%. As a result, they will double in value to $118 billion in 2021. Consequently, two of the three fastest-growing eCommerce markets in the world are in Latin America. They are Colombia and Argentina,” Dowd said in an email to Portada.

E-commerce trends forecaster eMarketer found even with this expected high growth rate, nearly 75 percent of the market of 650 million consumers expected to shop online is untapped.

E-commerce trends working for e-retailers

MercadoLibre boasts status as the undisputed leader in Latin America. Its huge geographic footprint and logistics expertise “have helped it to hold the lead,” Dowd said.

Amazon leverages its international recognition to become a leading player in Latin America.

And for Linio, expanding its business model and offering consumers a trusted, predictable and “formal” online shopping experience proves critical to its success, according to General Director Sieuzac.

Linio seeks to set itself apart from other online retailers by rigorously vetting its product providers to make sure what they offer Linio’s customers meets certain standards.

Linio offers free returns in its strategy of building customers’ confidence.

“We’re not leaving customers alone in a face-to-face situation with the seller,” Sieuzac said.

Linio’s strategy provides its online expertise to brands. They then create their own online shopping sites, a key component of Linio’s competitiveness.

As a result, Linio entered into a partnership to build and operate Aeromexico’s Club Premier online shopping experience.

Mexico offers the worst of both worlds: high levels of online payment fraud and a low level of cooperation from banks.

Linio also partnered with the micro-financing company ConCredito. ConCredito provides a huge presence in rural zones not necessarily within Linio’s geographic footprint.

Linio publishes its catalog of products on ConCredito’s website “Creditienda.” Linio spokesperson Paulina Maza said the company supports the ConCredito e-commerce site with specific promotion campaigns. They include digital marketing, logistics, fast delivery of products, and returns.

What lies ahead

The lack of brick and mortar retail outlets in Latin America actually plays into the hand of e-commerce retailers. That’s because they can offer products to consumers outside of major cities where consumers don’t have many shopping options. Sieuzac told Portada, “It’s a massive opportunity. You have people that simply don’t have access to products, even from a normal shop.”

A “key component” of e-commerce growth in Latin America proves to be shopping online with a mobile phone. As a result, a report by yStats.coMobile commerce reveals experts expect it to increase at a faster rate than e-commerce.

Brazil offers the largest consumer e-commerce market in Latin America. The report found experts predict Colombia to show a 20 percent growth rate through 2021.

A summary of the report reveals experts predict: “Rising internet and smartphone penetration rates, greater online payment security and development of MCommerce to contribute to the growth of online retail sales.”

What: Ecommerce marketing strategy is revealed by retailers Walmart and Soriana. It shows how they’re capturing the e-commerce home delivery grocery market in Mexico with alternative digital payment strategies.
Why it matters: Fear of fraud stops many Mexico consumers from making online purchases with a credit card. As a result, Walmart and Soriana are on it. Consequently, they’re deploying cash on delivery, branded digital cash cards, mobile phone loyalty programs, and PayPal options.

The race is on as grocers deploy ecommerce marketing strategy in Mexico. Grocery and general merchandise retailer Walmart has taken the lead. But in Mexico, its competitors, including Soriana, are racing to build their online-delivery businesses.

How customers pay for their online purchases could make all the difference.

High credit card commissions and fear of fraud pose a significant barrier to online sales in Mexico. Digital purchases make up only 3 percent of all consumer goods sales nationwide. As a result, that’s way below the average seen in other countries, according to branding expert Vilma Vale-Brennan. She is deputy general manager of Vale Network in Mexico.

The new President of Mexico, Andres Manuel Lopez Obrador, has promised to get banks to lower credit card commissions. But grocery retailers like Walmart don’t have time to lose.

Ecommerce Marketing Strategy with Digital Payment App

Last year, Walmart launched its own digital application. As a result, it allows customers to pay for goods at stores with the Walmart digital application “Cashi.”

After downloading the app to their mobile phones, customers can recharge it with cash at any Walmart-owned store. It’s a fast and easy way to convert cash into a secure digital payment option. As a result, customers use it for purchases at Walmart, Superama, Sam’s Club, and Bodega Aurrera stores.

Cashi can be used to pay electric bills and services including Netflix, Spotify, and Uber.

The idea here is to make purchasing with Walmart easier, and to give people more options.

But perhaps more importantly, Walmart tells Portada it expects to extend the Cashi digital payment system later this year to allow its online customers to use Cashi for online grocery purchases, according to Gabriela Buenrostro, assistant director of corporate communications. “The idea here is to make purchasing with Walmart easier, and to give people more options,” she said.

Walmart’s ecommerce marketing strategy outpaces the online market with 4.5 million e-commerce shoppers in Mexico, followed by grocers Soriana at 1.1 million, according to a study by the American media measurement and analytics company Comscore as reported by Portada.

Cash, PayPal Options Offered

Walmart offers online customers the option to use PayPal, and Soriana added the PayPal payment option to its online shopping site this year.

Soriana also allows its online customers to pay cash to the home delivery person, or use their credit card on the delivery person’s portable card reader, Director of Electronic Commerce Rafael Castelltort told Portada.

Most of Soriana’s online grocery customers shop online using Soriana’s branded mobile application on their cell phones. A Soriana loyalty card program has more than 9,000 users, and to build loyalty even more, Soriana, deploying its own ecommerce marketing strategy launched its own mobile phone service “Soriana Movil” in 2017, which earns users loyalty points that can be exchanged for free products, Castelltort said.

The trends are very clear. Mexicans prefer to use a mobile phone when visiting grocery stores’ online sites.

Soriana’s decision to launch its own mobile phone service in Mexico might appear tangential to an effort to build online purchases, however, it could be spot-on in terms of getting more online shoppers.

“The trends are very clear,” comScore’s Alejandra Ibarra, manager of comScore’s Latin America Services, told Portada when asked about ecommerce marketing strategies among grocers in Mexico. “Mexicans prefer to use a mobile phone when visiting grocery stores’ online sites.”

And as time goes by, mobile applications are becoming more and more important for grocery ecommerce market leaders like Soriana and Walmart.

Just last year, Walmart announced its acquisition of the online marketplace Cornershop. Users download the Cornershop application to make online purchases using their mobile phones at supermarkets, specialty food stores and pharmacies in Mexico and Chile, according to Forbes.

“The Cornershop acquisition by Walmart shows the focus that applications have for the company and the performance it must deliver to maintain its leadership,” Ibarra told Portada.

What: Ecommerce marketing strategy is revealed by retailers Walmart and Soriana. It shows how they’re capturing the e-commerce home delivery grocery market in Mexico with alternative digital payment strategies.
Why it matters: Fear of fraud stops many Mexico consumers from making online purchases with a credit card. As a result, Walmart and Soriana are on it. Consequently, they’re deploying cash on delivery, branded digital cash cards, mobile phone loyalty programs, and PayPal options.

The race is on as grocers deploy ecommerce marketing strategy in Mexico. Grocery and general merchandise retailer Walmart has taken the lead. But in Mexico, its competitors, including Soriana, are racing to build their online-delivery businesses.

How customers pay for their online purchases could make all the difference.

High credit card commissions and fear of fraud pose a significant barrier to online sales in Mexico. Digital purchases make up only 3 percent of all consumer goods sales nationwide. As a result, that’s way below the average seen in other countries, according to branding expert Vilma Vale-Brennan. She is deputy general manager of Vale Network in Mexico.

The new President of Mexico, Andres Manuel Lopez Obrador, has promised to get banks to lower credit card commissions. But grocery retailers like Walmart don’t have time to lose.

Ecommerce Marketing Strategy with Digital Payment App

Last year, Walmart launched its own digital application. As a result, it allows customers to pay for goods at stores with the Walmart digital application “Cashi.”

After downloading the app to their mobile phones, customers can recharge it with cash at any Walmart-owned store. It’s a fast and easy way to convert cash into a secure digital payment option. As a result, customers use it for purchases at Walmart, Superama, Sam’s Club, and Bodega Aurrera stores.

Cashi can be used to pay electric bills and services including Netflix, Spotify, and Uber.

The idea here is to make purchasing with Walmart easier, and to give people more options.

But perhaps more importantly, Walmart tells Portada it expects to extend the Cashi digital payment system later this year to allow its online customers to use Cashi for online grocery purchases, according to Gabriela Buenrostro, assistant director of corporate communications. “The idea here is to make purchasing with Walmart easier, and to give people more options,” she said.

Walmart’s ecommerce marketing strategy outpaces the online market with 4.5 million e-commerce shoppers in Mexico, followed by grocers Soriana at 1.1 million, according to a study by the American media measurement and analytics company Comscore as reported by Portada.

Cash, PayPal Options Offered

Walmart offers online customers the option to use PayPal, and Soriana added the PayPal payment option to its online shopping site this year.

Soriana also allows its online customers to pay cash to the home delivery person, or use their credit card on the delivery person’s portable card reader, Director of Electronic Commerce Rafael Castelltort told Portada.

Most of Soriana’s online grocery customers shop online using Soriana’s branded mobile application on their cell phones. A Soriana loyalty card program has more than 9,000 users, and to build loyalty even more, Soriana, deploying its own ecommerce marketing strategy launched its own mobile phone service “Soriana Movil” in 2017, which earns users loyalty points that can be exchanged for free products, Castelltort said.

The trends are very clear. Mexicans prefer to use a mobile phone when visiting grocery stores’ online sites.

Soriana’s decision to launch its own mobile phone service in Mexico might appear tangential to an effort to build online purchases, however, it could be spot-on in terms of getting more online shoppers.

“The trends are very clear,” comScore’s Alejandra Ibarra, manager of comScore’s Latin America Services, told Portada when asked about ecommerce marketing strategies among grocers in Mexico. “Mexicans prefer to use a mobile phone when visiting grocery stores’ online sites.”

And as time goes by, mobile applications are becoming more and more important for grocery ecommerce market leaders like Soriana and Walmart.

Just last year, Walmart announced its acquisition of the online marketplace Cornershop. Users download the Cornershop application to make online purchases using their mobile phones at supermarkets, specialty food stores and pharmacies in Mexico and Chile, according to Forbes.

“The Cornershop acquisition by Walmart shows the focus that applications have for the company and the performance it must deliver to maintain its leadership,” Ibarra told Portada.

What: IAB Mexico has presented the results of its 11º Study of Media and Device Consumption, based on a survey of 1297 Mexican internet users.
Why it matters: The media landscape has evolved a great deal in the last 10 years; advertisers need to understand the different types of internet users to be able to cater to their needs in an effective way.

 

In a private event held in Mexico City this week, IAB Mexico presented the results of its 11º Study of Media and Device Consumption, developed by Kantar with sponsorship from Televisa Digital. In this edition, the study explores the habits of Mexican internet users and their relationship with digital advertising by dividing their behavior into four areas that correspond to the different devices, platforms, and activities related to the online world: digital, social, entertainment, and e-commerce.

In order to find out how consumers’ online habits have changed in the last 10 years, 1297 people between the ages of 13 and 70 were surveyed (49% women; 51% men), and their answers revealed that the percentage of connected population in Mexico grew from 30% to 67% (about 75.8 million internet users).

 

Digital Devices Continue to Rise

According to the study, there’ll be about 29 billion connected devices by 2022. Today, 90% of Mexican internet users own a smartphone, and 7 in every 10 declare owning a complementary device such as Smart TVs and speakers, wearables, streaming devices, etc. As explained in the report, “accurate understanding of all the different types of internet users provides the industry with tools to segment them according to their needs.

 

Social Media: Your New Best Friend?

A big majority (84%) of Mexican internet said they use an average of 4 different social media every day, and even though most of the social networks that were predominantly used 10 years ago have disappeared, two of them (Facebook and Twitter) are still on the top three.

As the study shows, users go to social media both to consume (86%) and to create content (94%), and 61% say they follow their favorite brands in order to keep themselves informed about news, discounts, and other consumers’ opinions. “In the last ten years, social media have evolved from a social communication space to a key ally for brands,” says the report.

 

Online Streaming Gives Consumers Freedom to Choose

From music to TV and videogames, 83% of surveyed respondents declared having access to online streaming services. The video platforms with more sustained growth are Netflix, Claro Video and Prime Video; Spotify leads the music category; and Xbox and Twitch are the videogame streamers with more users.

According to the report, advertisers have an opportunity to gain consumers’ attention provided that they take into account what really matters to them. Only 18% of viewers say they “always pay attention” to online ads, and the main reasons why the remaining respondents pay attention “sometimes” or “never” is that ads are simply not attractive, or that they feel their experience is being interrupted in an annoying way.

 

A Majority of Respondents Have Tried E-Commerce

Even though the growth has been slow, the study reports that e-commerce is gaining relevance among Mexican internet users, as 67% declares having completed an online purchase recently. Among the main reasons why they decided to buy online, they said “there was a special offer”, “it was quick and easy”, or “it was cheaper”. One of the things that have favored this growth, as said in the report, is the increase of connectivity both in and out of the store that allows consumers to compare prices. In average, consumers completed 3.5 e-commerce activities, with the top 5 categories being bank transactions, payment of services, clothes, electronic devices, and music.

However, it is still difficult to get the remaining 33% to make purchases online. Among those who declared not completing any transactions online recently, the main reasons were not having a credit card (42%), distrust when asked to share personal information (36%), and a wish to see the product before buying it (29%).

 

All images except feature image by Freepik.

Feature image by IAB Mexico / Kantar 

What: The market for online grocery sales and home delivery is in its infancy in Mexico but offers huge potential given the 65 million Mexicans who now have access to the internet.
Why it matters: Grocery and general merchandise retailer Walmart has 4.5 million e-commerce customers in Mexico, and its competitors, like E-commerce Director Rafael Castelltort at Soriana, tell Portada how they are racing to sell groceries online, building new digital infrastructure, deploying machine learning, creating alternatives to credit card payments and launching websites highly customized for e-commerce and home deliveries.

Mexico may offer the perfect storm for selling groceries online. A rapidly growing urban middle class, internet penetration that now reaches 65 million, and grocery retail chains building sophisticated online payment and delivery infrastructures combine to make a bright future with huge potential, according to analysts.

“Supermarket chains in Mexico can grow tremendously in the future,” concludes a new study by the American media measurement and analytics company comScore. “The sector has huge potential for growth.”

Walmart leads the online grocery market with 4.5 million ecommerce shoppers in Mexico. Grocery chain Soriana comes next at 1.1 million, followed by Superama with 992,000. But while most Mexicans shop online using their mobile phones, online grocery shoppers still tend to use PCs more than any other device.

Many retailers now offer their own mobile applications, but the majority of online grocery shoppers in Mexico use a cell phone and rely on the cell phone’s internet browser instead of the retailer’s mobile application.

“Consumption by applications is still very incipient,” the study notes. Walmart’s online shoppers use its application only 25% of the time, while Soriana shoppers use Soriana’s application 15% of the time, according to the study shared by comScore with Portada.

Surprisingly, when it comes to time spent shopping online for groceries, the PC is king, with the exception of Walmart and Chedraui. More ecommerce shoppers at Walmart and Chedraui use their mobile devices than the PC.


Source: comScore

In Search of Younger Online Grocery Shoppers

All of the grocery chains chasing the ecommerce market face the challenge of winning over younger shoppers.

Adults over the age of 35 are more likely to shop for food online than any other age group. La Comer, however, has the largest group of online shoppers ages 25 to 34, compared to all grocery retailers, the comScore study found.

Women make up the majority of online grocery shoppers at Soriana, La Comer and Superama, while men dominate at Walmart, Costco and Chedraui.

The majority of our clients are women who value their time and value home delivery.

“The majority of our clients are women who value their time and value home delivery,” Rafael Castelltort, Director of Electronic Commerce at Soriana, tells Portada.

E-commerce shoppers have the option to pick their orders up at the stores, but home delivery is more popular.

Excellence in service is a pillar of Soriana’s strategy for winning over e-commerce customers. “We focus on the customer, deliver what they request, and in the time promised,” says Castelltort.

Soriana does not offer lower prices online than in stores to win over new ecommerce customers. The average weekly order is between 50-60 items and customers can pay for the delivery using PayPal, by paying cash to the delivery person or swiping a credit card on a mobile terminal the delivery person brings with the order. Customers don’t have to pay online with a credit card to make a purchase.

Service, Service, Service

A totally seamless purchasing process, from order to payment and delivery is Walmart’s mantra for winning the battle of online sales.

“We understand that customers aren’t only looking to save money, but are also looking to save time,” Roberto Villalobos, Director of Web Operations at Walmart and Superama tells Portada.

“We are constantly improving the online shopping experience for our customers and have implemented significant changes for grocery shopping on our internet site, including our own mobile application.”

We understand that customers aren’t only looking to save money, but are also looking to save time.

Walmart’s mobile application received the Best App award at eShow Mexico last year, Villalobos notes.

Challenges Ahead

Online grocery revenue in the U.S. reached $17.5 billion in 2018 and is expected to reach $30 billion by 2021.

In Mexico, however, the comScore study found uneven growth over the past few years, and a slight downward trend for 2019. Long delivery times may explain both factors, the study said.

And while the online grocery sale market has “huge potential” in Mexico, the comScore study finds significant challenges remain on the horizon, including the need to incorporate machine learning, big data, and logistics which have proven key factors for success in other parts of the world.

“With sophisticated technology and offers oriented to the user, Mexican grocery chains can grow greatly in the future,” the comScore study concludes.

In Part Two of our series on e-commerce grocery sales in Mexico, we explore specific marketing innovation, payment, and technology strategies being used to win the battle to increase market share.

What: We looked at the top 15 online retail sites visited by Hispanic shoppers in the US in November of 2018 and how they scored in numbers of visitors.
Why it matters: Best Buy and Kohl’s benefited handsomely from increased visits by Hispanics to their websites in the lead up to the 2018 holiday shopping season. Both saw a nearly 40% increase in visitors in November compared to the previous month. While maintaining its first-place ranking in the top 15 most visited sites by Hispanics in the US in November, Amazon nonetheless saw a dip of 2% in its overall share of total visits compared to the month of October.

 

Number of Hispanic visitors to the Top 15 e-commerce sites in the US, November 2018
Total Audience, Home and Work, PC/Laptop154,176
SiteTotal Unique Visitors*
Amazon Sites28,333
Walmart18,602
eBay16,004
Apple.com Worldwide Sites11,959
Target Corporation10,433
Samsung Group9,701
WISH.COM8,611
Best Buy Sites8,485
Kohl’s Corporation7,541
The Home Depot, Inc.6,697
ETSY.com6,462
Ticketmaster6,342
Macy’s Inc.5,911
Wayfair4,913
Lowes.com4,182

Source: comScore *Numbers reported as shown

Kohl’s and Best Buy saw significant increases in the number of Hispanic visitors to their sites in the month of November, 2018 compared to October. Visits to both sites by Hispanics surged by nearly 40%, catapulting Kohl’s to 13th place among the top 15 ranked sites from 11th place in October. Best Buy jumped from 8th place in November from 11th place in October.

  • Walmart increased its share of Hispanic visitors to the top 15 sites ranked by comScore in November by 2,498 visits over the month of October.
  • Amazon saw a drop of 2% in its share of the total visits to the top 15 sites by Hispanics compared to October, but continued to hold first place among the sites monitored.
  • Amazon, Walmart, eBay, Apple, Target and Samsung maintained their top five rankings with Hispanics in that order in November compared to October.
  • Etsy dropped from 8th place in October to 11th place in November, or from a total of 7,012 visits to 6,462 with Hispanics.
  • Ticketmaster saw a dip in visits by Hispanics in November compared to October, slipping from 8th place in the rankings to 11th.
  • The Home Depot remained steady, garnering 4.3% of overall visits to the top 15 sites in November, the same percentage as in October.
  • eBay and Walmart saw decreases in their share of total visits to the top 15 sites by Hispanics by half a percentage point in November compared to October.

 

What: A summary of the most relevant consumer insight research in the US, US Hispanic, and Latin American markets.
Why it matters: If you’re trying to keep up with the latest happenings, this is your one-stop shop.

 

  • According to Packaged Facts in the report The Financial Services Market: African Americans and Hispanics, as of 2018, some 70% of U.S. adult consumers say they don’t like the idea of being in debt—a response rate has held relatively steady since 2009, even as consumers have gradually added debt to their balance sheets. African American consumers are 28% less likely than the average U.S. consumer to feel financially secure, but at the same time, they are 16% less likely than average to view the idea of being in debt negatively. Likewise, Hispanic consumers are 15% less likely than the average U.S. consumer to feel financially secure, and they are also more likely than average to say they are no good at saving money.

 

  • US organic sales surpassed US $21 billion in sales in the 52-week period ended Nov. 24, 2018, which was up nearly 9% from the previous 52-week period, according to Nielsen Homescan household projected data. Millennials spent 14% more on organic products compared to the previous 52-week period, and Hispanic consumers spent over 13% more.

 

  • More and more Mexicans are willing to try online grocery shopping, as demonstrated by recent Comscore data. 4.5 million users buy on Walmart, followed by Soriana (1.1 million) and Superama (992,000 users). Bearing in mind that Mexico’s total population reaches over 65 million users, the market of online grocery shopping has great potential in this country.

 

  • The latest findings from MRI’s Cord Evolution research show that Americans watch TV or video in groups almost half (48%) of their total viewing time. Over half (58%) of co-viewing time is spent watching with a “significant other,” while children account for 19%; adult family members, 16%; and friends, 9%. Preferred genres for watching with others change depending on who else is in the room; while Movies come in first or second in all four co-viewing situations, and Comedy TV Shows consistently place in the top three, Sports score highest when friends are the co-viewers.

 

  • According to a report by Pew Research Center, the views of Gen Z – those ages 13 to 21 in 2018 – mirror those of Millennials. Only about three-in-ten Gen Zers and Millennials (30% and 29%, respectively) approve of the way Donald Trump is handling his job as president. This compares with 38% of Gen Xers, 43% of Boomers and 54% of Silents. Similarly, while majorities in Gen Z and the Millennial generation say government should do more to solve problems, rather than that government is doing too many things better left to businesses and individuals, Gen Xers and Boomers are more evenly divided on this issue. For their part, most Silents would like to see a less activist government.