APEX Technologies hosted a live event with PwC on Customer Experience Management
The way consumers interact with brands and the emergence of innovative business models have become the two major challenges for retail businesses, affecting their continued growth. Today, in an environment of weak business growth, maintaining a large customer base does not take customer interaction to the next level. Lots of companies struggle with maintaining, deepening and strengthening the relationship with their customers through digital means, so as to achieve new growth.
On November 26, APEX Technologies hosted a live event with PwC experts on Customer Experience Management and how this can boost retail growth. The even was hosted by the co-founder and president of APEX Technologies, Tiger Yang, together with China Shanghai Management Consulting Partner & Consumer Market Industry Partner, Lai Kuibai. During this event, both hosts participated in an extensive workshop and explored how to find a growth path suitable for development of retail companies in a new digital environment, the new marketing environment and an economy of weak business growth.
Lai Kubai chooses “Reinventing Experience Marketing in a Changing Environment” as the theme for the new normal of consumption and shares his views from a macro environment perspective, taking into account the changes in China ’s consumer behavior preferences and opportunities in the lower-city market. He proposes consumer-centric and defensive strategies to support sustainable development for retail companies.
Overall economic and market growth has slowed down and consumer shopping preferences have changed
Establishing a flexible supply chain through digitalization to reduce the impact of uncertainty
China’s overall economic and retail market growth has slowed, posing new challenges for brands and retailers. In the long run, Chinese companies will become more independent, autonomous and flexible in the global value chain. Retail companies need to digitally build flexible supply chains to mitigate the effects of uncertainty.
- Integrated supply chain planning and execution: integrated end-to-end supply and demand planning, end-to-end data collection, utilization and analysis.
- Strengthen digital operations: Improve supply chain efficiency through automated manufacturing, warehousing, and logistics, and use data analysis to achieve real-time control of procurement and logistics activities to improve supply chain visibility and accuracy.
- Build a strong back-end: Highly integrate the supply chain with business partners to gain a strong data pillar.
Domestic consumer shopping behavior patterns are constantly changing
With the popularity of 4G and the advent of 5G, the development of Internet payments and mobile payment technologies has made online and mobile terminals the most frequent shopping channels for Chinese consumers. A survey by PwC “Global Consumer Insight Report Survey 2019” shows that 68% of Chinese consumers surveyed make online purchases at least once a week. 55% of Chinese consumers surveyed use mobile phones for shopping.
At the same time, China’s sinking market is receiving more and more attention, and its extremely strong consumption potential has become a blue ocean market that cannot be ignored. Whether it’s in terms of consumption quantity or consumption quality, consumers are becoming a new driving force for consumption upgrade. Compared with Tier 1 and Tier 2 cities: The social connections in markets such as Tier 3 and Tier 4 are based on acquaintance relationships and are more humane. Social fission has overturned the original product life cycle model; with the popularity of the Internet, consumers in sinking markets are relying on online entertainment. The strong demand for online entertainment has spawned a new model of short video sales, which also meets consumer demand. Today’s consumers are more sensitive to price, and high cost performance is still the main consumer appeal.
Return to the nature of consumption and adopt a more defensive strategy to support sustainable business development
Faced with the overall economic slowdown and changes in the patterns of the Chinese consumer market, how should retail companies respond?
Lai Kuibai said that the retail enterprises need to return to the essence of consumption and adopt a more defensive strategy to support the sustainable development of the business.
- Focus on profitability: slow down the rapid expansion and mergers and acquisitions, strip long-term unprofitable businesses, and use profit as a key performance indicator.
- Consumer-centric: Mining consumer behavior and analyze preference insights, placing consumers at the center of business models.
- Strive for operational excellence: borrow technology to better manage inventory, adopt more flexible supply chains to respond quickly and reduce costs, and control cash flow to ensure sustainable operations.
New Retail 2.0 More Focused on Consumer Experience
From an industry perspective and compared with new retail 1.0, consumer-centric new retail 2.0 will focus more on the consumer experience.
Sales channel level
New Retail 2.0 focuses more on experience-driven consumption, and is committed to creating resonance between products and brands among consumers; it tends to have more diversified e-commerce channels, focusing on social retail; not only integrating payment and logistics, but also integrating all contacts in the consumer journey.
Marketing level
New Retail 2.0 further uses data and algorithms to create more targeted marketing and performance improvement methods. At the same time, it places greater emphasis on digitalization and subverts traditional marketing exposure models.
Product development level
New Retail 2.0 further uses data to better analyze demand signals and develop more consumer-centric products. It continues to explore disruptive innovation opportunities through big data.
Supply chain level
New Retail 2.0 enhances flexibility by optimizing warehousing and inventory deployment to support an omnichannel experience, and enhances the ability to collect and analyze information from data throughout the supply chain. Data sources include production, warehousing, and delivery to end consumers.
Purchasing and manufacturing level
New Retail 2.0 further utilizes data to drive supply-side and demand-side forecasts to optimize inventory management. Both multinational companies and local brands are making greater use of data-driven insights and production capabilities, and more broadly accepting technology in procurement and manufacturing.
How to measure return on experience (ROX)
Return on Experience (ROX) is a better understanding of the return on investment for consumer interactions with brands.
Lai Kuibai suggested the following three steps to build the ROX framework:
- Draw the consumer journey
- Define the drivers of the consumer experience and contact points
- Invest in links that can bring quantifiable benefits
ROX can be further maximized by:
- Integrate consumer experience into the entire value chain: create seamless consumer processes and higher customer satisfaction; invest resources in the weakest link of the front end and back end; use the ROX framework as an experience-driven strategy for planning, execution, and measurement of the customer life cycle.
- Identify key moments and build communities to enhance interactions: Identify those “magic moments” that can build customer loyalty and build long-term relationships; build communities and connect consumers through narrative or interaction.
- Use new technology to achieve flexible digital operations that are data-driven: establish digital flexibility and continuously innovate through emerging technologies; use big data to tap consumer insights and improve traditional retail models; respect consumer data and return corresponding value.
Using AI to build a growth engine
The dilemma retail companies face
- Variable marketing environment: Different shopping styles and methodes (shopping-style, efficient, search shopping, …), online + offline constitutes a complete retail market structure, more and more information and marketing channels affecting consumers are becoming available. The consumer environment will become more complex, diverse and fragmented.
- Incremental market transfers: According to the National Bureau of Statistics, the total retail sales of consumer goods totaled 30.98 trillion yuan from January to October 2018 — a cumulative year-on-year increase of 9.2%, and the growth rate fell 1.1% year-on-year. On the whole, China’s retail industry is gradually moving towards brand competition, and traffic is accelerating seriously.
- Weak format growth: According to data from the China National Commercial Information Center, the year-on-year growth rate of retail sales of offline physical stores in the first half of 2019 was 5.6%, which was less than the year-on-year actual growth rates of total retail sales of social goods and online retail sales of physical goods.
Based on the above dilemmas, the value of brands’ existing customers is particularly important. The actions of leading retail companies indicate that their top priority is to adapt to the era of the digital economy, hoping to break the bottleneck of weak online traffic growth, and use technology and data to achieve this.
Using Intelligent AI to build a growth engine
When new retail is mentioned, online marketing and offline marketing are equally important. How to effectively combine online and offline customers and data to create a new retail method, better control channels and customers, and make business growth quantifiable. The adjustable parameter process is a problem that every retail enterprise needs to face and solve. At the event, Tiger Yang said that the customer data platform (CDP) equipped with algorithms such as AI is the solution.
Step 1 of building a growth engine: Intelligent collection, get data through multiple channels
APEX Technologies’ customer data platform, NEXUS, can help companies integrate online, offline, real-time and non-real-time data assets, and integrate management data, customer contact data, production and operation data, and external enterprise data — such as multi-platform and multi-channel data. The CDP connects and converges to update the customer’s latest behavior in real time.
Building a Growth Engine Step Two:Multi-dimensional tagging, multi-angle recognition of customer portraits
NEXUS supports group portraits and individual portraits to help companies recognize customers from a macro to a micro point of view. It pulls customer information through uniquely identified data, combines customer purchase behavior and the eight most valuable consumer interactions with the brand — such as product browsing, product collection, brand search, etc. — to form a comprehensive customer portrait, intuitively depicting a consumer image. After tagging, companies can choose the customer groups that they want to push. This enables a multichannel (WeChat public account, EDM, SMS, etc.) marketing reach.
Step 3 of building a growth engine: marketing automation — precise distribution of ads and scoring for monitoring and analysis
The product provides a variety of advanced statistical analysis models, which can perform complex advanced statistics as required, and can display data at multiple levels and angles to support marketing automation. The software can can recommend personalized advertisement based on customer behavior, and reduce repetitive work, giving customers more time to make decisions. The advertisement effect can be analyzed and adjusted in real time.
Step 4 of building a growth engine: equipment of an AI module to realize value-added management over the entire life cycle
The latest enterprise-level artificial intelligence application IQ2.0 launched by APEX Technologies can be understood as a non-technical and friendly artificial intelligence application platform, which is used in applications such as submerged mining, customer group analysis, customer behavior prediction, sales conversion, and precise delivery. Additionally, the platform provides targeted and accurate marketing solutions at all stages in the customer life cycle to continuously improve marketing capabilities.
Using IQ2.0 for AI algorithm modeling, retail companies can introduce influence factors such as holidays and promotions to build features and appropriate models. Through fully understanding your business and continuous parameter tuning, your business’s output accuracy is higher than what manual predictions show and additional growth can be established.
Retail companies need to focus more on consumer experiences and look for customer-centric consumption growth points. Consumers need to be approached on a personalized level. This allows for the maximizing of existing customer value, and in turn help the sustainable growth of retail companies.
About APEX Technologies
APEX Technologies provides an enterprise customer data technology solution that helps marketers connect, unify, analyze, and activate their customer data.
