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Main Feature Marketing Southeast Asia

Revenge Shopping – the unexpected saviour of the Luxury Economy

Bricks-and-mortar has taken a nosedive in recent months all over the world, and luxury is undoubtedly one of the hardest-hit sectors. But with lockdown measures easing up, the economy is starting to show signs of recovery via ‘Revenge Shopping’, a phenomenon that sees luxury stores opening their doors to shopping-starved consumers looking to avenge their months spent holed up at home during lockdowns. 

This is especially prevalent in China, whose shoppers make up one-third of global luxury sales. Hermes is said to have generated $2.7 million in sales on the day that their flagship store in Guangzhou, China reopened in April, marking this as one of the biggest single-day shopping sprees at a luxury outlet in the entire country.

Will discounts hurt the image of luxury brands?

In order to encourage shoppers to step out of their homes and shop outside, shopping malls and retail brands are incentivising consumers with vouchers and massive discounts to encourage this phenomenon. 

Luxury fashion brands, that were once perceived as unattainable, out of reach and reserved for a privileged few, have diversified their customer base in order to access the new breed of Gen-Z consumers as they reach shopping maturity and begin to demonstrate significant purchase potential. 

According to South China Morning Post, local governments are further fuelling the return of bricks-and-mortar shopping by issuing prepaid coupons, with at least 30 cities across APAC reportedly having issued residents over US$706 million worth of shopping vouchers.

Shoppers now have a vast spread of luxury options to splurge on, as luxury brands redefine their brand values and make them more accessible to the masses. But not all agree that discounting is the right strategy for luxury brands. 

“Having your products be more coveted is often something that can drive higher earnings,” said Sucharita Kodali, a retail analyst with Forrester Research. “That’s what makes the luxury sector unique.”

Is revenge shopping truly for everyone?

Despite its success thus far, qualms remain about the longevity of the revenge shopping phenomenon. Revenge shopping applies mainly to the happy few who can afford high-price-point items, keeping the wider population at arm’s length. According to a recent survey reported in Quartz, 41% of respondents would reduce spending to prepare for future crises. Only 8% expressed willingness to do more shopping after the outbreak. 

In another survey 68% of people say they expected their income this year to be lower. With many having been put on furlough, having had their salary decreased or having had lost their job altogether, the main consensus will be of wariness and care.

On the flipside, a recent study by Rakuten Advertising reports that Asian consumers are more likely to increase their shopping spend, especially when it comes to big holidays such as Christmas and Lunar New Year, compared to their Western counterparts.

The downsides of a swift economic recovery

While stores may be relieved about increased revenue after months of economic downturn, they would still face the issue of excess inventory. It might not be such good news for the planet, and scientists warn that returning to business-as-usual at an accelerated pace could bring about negative impacts to the environment. 

The fashion industry, already contributing 10% of global carbon emissions, is also a major driver of waste, unsustainable agricultural production and water contamination causing major harms to wildlife. With revenge shopping on the rise, it is likely that the bounce back in demand for fashion will reignite these environmentally destructive practices that make future pandemics more likely. 

As brands face the pressure of recovery and clearing stock to make way for new collections, e-commerce and affiliate marketing may help with targeting newer and a wider range of audiences.

A few weeks after the reopening of the economy post-pandemic, almost 80% of shopping mall merchants observed customer foot traffic at levels more than half of what it was before the Covid-19 outbreak, according to the China Commerce Association for General Merchandise. Looking back, during the financial crisis of 2008-2009, luxury was also one of the categories to recover the quickest. 

If history is any indication, the luxury economy may be forecasted to experience a healthy and speedy return to normality, thanks to revenge shoppers. However whether this phenomenon is sustainable for luxury brands themselves and the environment, that answer is yet to be discovered.

The author is Stella Berry, Regional Business Director of Adludio, a premier advertising platform for delivering brilliant creative on mobile devices.

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Technology Featured Southeast Asia

How a modern data platform can enhance data app experiences

Fast-growing Software as a service (SaaS) and other cloud-based solutions providers in Singapore, and across the region, have developed data apps for a variety of business uses across functions and industries. These companies are receiving huge volumes of valuable data that promises to unlock significant insights for their customers, if managed properly. From marketing apps that provide customer insights, to Internet of Things (IoT) apps that handle device feedback, and data analytics apps that process both historical and near real-time data, the demand for data apps for analysis is growing exponentially. 

Various data apps that promise to help companies take advantage of their data in real-time to improve business outcomes are emerging. However, many businesses using these applications struggle to extract and analyze these growing volumes of data efficiently. This is due to challenges that developers often face when building, designing, and supporting these applications including developing a 360-degree view of the customer data, handling IoT device data in near real-time, combining historical and current data for analysis, bringing data together for machine learning (ML) models, and embedding analytics in data-intensive applications. 

A key obstacle in overcoming these challenges is app developers’ reliance on legacy architectures that only enable limited scalability, concurrency, and performance. To address these challenges, software companies can turn to cloud data platforms to build and manage their data stack. By adopting a modern, cloud-based data architecture, developers have an opportunity to deliver differentiated and defensible value to customers who need powerful features and real-time insights to run their businesses better.  

Why does architecture matter?

While apps have been modernized, the infrastructure powering these apps still runs on a traditional architecture that was built on the assumption that small clusters of machines with predictable amounts and types of structured data would be created largely by internal sources. Not surprisingly, these companies struggle with large volumes of data, as well as schema-less and semi-structured formats from external sources, such as application logs, web applications, mobile devices, social media, sensor data, and IoT data. This legacy architecture, created long before the emergence of the cloud and IaaS and PaaS services, was not built to run massive SaaS applications with semi-structured data. Additionally, traditional data warehouses cannot scale to match data capacity or demand easily, which creates constraints on data availability. Adopting generic architectural plumbing and tools might be a quick and low-cost fix, but such strategy can cause technical challenges down the road that can lead to lower output and a disappointing customer experience. 

As a result, investing in new architecture is critical to delivering on customer expectations of data apps. Some key capabilities to look for in a modern data platform for data applications are:

  • Decoupled resources which allow apps to scale computing resources independently, and in a linear fashion for each job. It also enables multiple queries to be run against the same data without conflict. 
  • Elasticity to allow software companies to grow or shrink dynamically and adapt to load changes. 
  • Support for various data types to provide a holistic view of the data.
  • Developer tooling and automation to enable developers to “plug in” services with APIs, applying a building blocks approach, rather than rebuilding with each addition to the app.  
  • Strong security baked into the design to enable fast development, while protecting against security threats. 

To ensure that data apps deliver on their customers’ expectations, software companies need to align technology decisions with long-term product needs, keep evolving customer needs in mind and design with growth and flexibility in mind. App developers need a central repository to provide the workload isolation, instant and near-infinite elasticity, unlimited concurrency, and ability to natively ingest semi-structured data. 

Additionally, many data app developers adopt generic low-cost tools that allow for quick development without upfront investment, as well as using traditional data platforms. When developers do not fully consider what is needed from their data stack to deliver powerful data analytics apps, problems can arise down the line. These problems include data storage and computing strains on the system, difficulties supporting semi-structured data, frequent maintenance and upgrades, and a lack of employee resources to configure the platform to their requirements. That will eventually lead to a full re-architecture of the data platform to address these issues, which can leave customers frustrated by latency issues and incomplete data analysis.  

In order to develop powerful, modern data apps, software companies need to invest in a modern, cloud-built data platform. Consider the data architecture before technical issues arise to enjoy a lower total cost of ownership from the beginning, remove the restraints of traditional data platforms and deliver fast, differentiated customer experiences.

The author is Geoff Soon, Managing Director, South Asia, Snowflake. Snowflake equips organizations with a single, integrated platform that offers the data warehouse built for the cloud.

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Categories
Main Feature Marketing Southeast Asia

Influencer marketing in the new normal

The world has always been resilient, but the past months have proven to be one of the most comparably difficult challenges that we have faced in a very long time. The rising number of cases of COVID-19 has crippled many citizens and businesses, forcing all of us to hastily adjust to what we would probably consider our “new normal” moving forward.

During this period of lockdowns and social distancing, I’ve seen our clients and partners forcing themselves to quickly adapt work-from-home arrangements with their teams and trying to recreate the traditional office environment through video meetings via Zoom or Google Hangouts.

The social media universe also saw (and judged) influencers and celebrities who made the industry proud because of their philanthropic engagements, be it in the frontlines distributing food and equipment to people in need, or as keyboard warriors making good use of their influence and reach in massive information and donation drives. Some even went as far as organizing and volunteering their personal resources to extend help to as many as they possibly can.

Consumer behavior has changed drastically, maybe the most drastic one I’ve seen in years. Amidst the changes in the way that brands would have to communicate their stories and value propositions in this “new reality,” many marketers may ask, “What are the implications of this “new reality” to the way that we do influencer marketing?” or maybe, “Can we still have campaigns and engage influencers given the current situation?” and possibly, “Is influencer marketing still relevant in this time of a pandemic?”

As someone who’s seen many evolutions and shifts in this industry, I have a couple of thoughts, insights, and recommendations that I could share with you:

1. This is a good time to review and re-align.

If you’re a brand, I suggest it’s high time to review what you value and assess the alignment of your current and potential influencer partners with your brand promise and value proposition.

If you’re an influencer, it’s good to know and be firm about what you believe in and stand for; even better if you could communicate this well in your online channels.

This way, brands and influencers are able to identify if their principles are in alignment, making it easier to work on future engagements.

2. Supercharge your social media presence.

The volume of content and conversations in social media rose in epic proportions, attributable maybe to the fact that many internet users are staying at home with very few things to do. Some brands stood out because of their timely (and very witty) appropriation of trending topics in their promotional materials, which earned them amazing engagement metrics.

Everyone is spending longer hours on social media during this pandemic. I, for one, get all the relevant news and updates through social media; I don’t even turn on the TV anymore. If you want to be where the people are, it’s the best place you can be, so take extra effort to increase your visibility.

Caveat: Stay true to your brand promise and go to where you believe you can create and provide more value. For brands most especially, if TikTok is particularly new to you, I don’t think now is the best time to start. For influencers though, maybe this is a good time to see if TikTok is something that will work for you.

3. Ask yourself, “How can I solve a consumer pain point right now?”

I understand that the “cancel culture” has made it very challenging for people to find their place and post their opinions in the organized clutter of social media. I also recognize that toxic positivity is frowned upon by many, and we all have to tread carefully for fear of offending somebody unintentionally.

My take on this is that different individuals have different ways to cope, and at this time, people also have different pain points that we can provide solutions to. As for me for example, one of my pain points is that I’m not able to take my regular fitness and meditation classes anymore. It’s good that some fitness studios like Plana Forma, White Space Wellness, and Beyond Yoga offer free classes via live guided sessions in social media.

What are other consumer pain points right now and how can we provide solutions to these? Businesses and influencers alike can actually be instruments in providing temporary solutions to these temporary pain points — just a quick fix while everyone is in quarantine. Many people likely have plenty of time in their hands and might have a need for educational articles or videos to consume, new recipes to try, instructions for building DIY stuff, tips for keeping the kids entertained and busy, exercises for physical health and mental stability, or even a simple uplift in spirits during this trying time. Those are just examples of situations where we can fit our narrative, tying the stories we wish to tell to pain points of people we want to speak with and reach.

4. Now is the best time to really show what “authenticity” looks like.

In general, people are interested to see what happens in real life, beyond the glamorous filters of social media. I do not expect people to engage very much with well polished, professionally shot and edited content especially at this time; what they want is content that is raw, real, and speaks to their current reality.

This is a good time for both brands and influencers to talk about a narrative that shows a bit of vulnerability. Unshaved beards? Check. Legit woke-up-like-this face? Check. I-haven’t-taken-a-bath-yet-but-let’s-do-a-video-call-nevertheless? Check. “Realness” is what’s most desired now, and we can make this difficult time more bearable with a trifle of humanity.

The author is Ace Gapuz, Founder & CEO of Blogapalooza. Blogapalooza is the Philippines’ premier influencer marketing company, having 7,000 influencers in its community of influencers and digital content creators.

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