Ogilvy’s latest eport, “Driving Growth with D2C,” in collaboration with Verticurl and commercetools, highlights the need for brands to pivot to direct to consumer digital strategies in order to stay relevant in Asia and lead the market in the future.
The report argues that direct-to-consumer (D2C) strategies provide the ability to adapt nimbly to changing customer expectations, offering unique experiences that sets brands apart. Beyond providing ownership of invaluable customer data, the report encourages innovation and personalising offerings based on data-driven insight.
Last year, the pandemic significantly increased the adoption of digital commerce and related digital services in Southeast Asia. Internet penetration, digital payment and consumer trust in digital commerce all rose significantly in 2020. The region’s online industry is poised to triple to $309 billion USD in gross merchandise value by 2025.
“In Southeast Asia, social media penetration ranges from approximately 60% in Indonesia to 90% in Malaysia from early 2021,” said Vice President of Presales Consulting-Technology for Ogilvy, Tim Till. “Referral-based commerce with influencers may see an increase as the sophistication in payments to those influencers matures. A growing consumer base, including unbanked individuals will increasingly be able to buy online as individuals and businesses become able to receive payment and pay through new and developing methods such as crypto currency, buy-now-pay-later, e-wallets.”
According to Global Vice President for Verticurl (Ogilvy’s Delivery and Operations Center) Waheed Bidiwale, this is only the beginning and the digital commerce trend will eventually accelerate from lifestyle to the entire gamut of products and service categories,
“Not many thought of buying toilet paper online before Covid,” Waheed said. “Brands that are thinking ‘I’m in a commodity business, or I am in the impulse purchase category or nobody buys a car online so I don’t need digital commerce,’ need to relook at their strategies.”
The Ogilvy report also argues that the advantages of marketplaces will not be sustainable as a long term option and eventually there will be associated costs such as a need to buy advertising in order to generate traffic on the site.
Marketplaces already demand a percentage of transactions and may charge extra for certain services and functionality. With D2C, the middleman is removed and brands gain an advantage on costs, savings that can be passed along to their customers.
Ultimately, D2C gives brands a long-term edge by placing customer-centric innovation at the heart of how a brand operates and ensures control of customer data and customer experience.
To find out more about how D2C works for brands plus a wealth of stats and examples download the full report here: https://bit.ly/36fxLWG
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