The Future of Retail: Insights from E2E Commerce Indonesia 2019

Last month, CleverTap was at the E2E Commerce Indonesia. The event hosted a variety of companies offering marketing, logistics, packaging, and cloud services to ecommerce businesses predominantly in the SEA region. We loved the vibe of the event as we interacted with our customers and their end users.
There were a good number of panel discussions and talks given by experts in the ecommerce domain. And while we couldn’t attend all of them, we took notes and gathered insights from the ones that we attended.
Below are some highlights:

The Four Pillars of Ecommerce in SEA

According to Jemy Confido, CEO of Blanja.com, there are four pillars of ecommerce in Southeast Asia: platform, payment, logistics, and of course, product.

• Platform enables customers to purchase via website or mobile apps.
• Payment modes that are suited to the unbanked population.
• Logistics and warehousing to ensure last mile on-time delivery of products.
  Without logistics improvement, Indonesia may have difficulty continuing to grow in online commerce. The key here remains in building supporting infrastructure to improve back-end efficiency, last mile delivery to urban and especially non-urban areas.

The average Indonesian spends four hours a day accessing the Internet on their mobile device —twice the USA average. 30 million Indonesians today are transacting online, creating a market of at least $8 billion.⁰¹
The rapid growth in online commerce in Indonesia is powered by its mobile-first and digitally savvy consumers, increasing the participation of micro, small, and medium enterprises (MSME) in online commerce, growing investments, and supportive government policies.

Technology’s Impact on Retail

Technology is changing the way we shop. IOT, virtual reality, and augmented reality are not just buzzwords. They are set to usher in a shift in the shopping experience, both online and offline. The promise of connected devices capturing data and delivering amazing shopping experiences is materializing even now.
Muliadi Jeo, CTO of Icube Inc., talked about how technology is bringing change in retail, emphasizing that despite these changes, we should always keep the customer at the center. He further underscored that omnichannel is no longer an option for retailers; it’s a prerequisite to success.
Other examples of shopping experiences made amazing by tech:

• • Amazon Go, Amazon’s brick-and-mortar stores have made self-service shopping not just cashless but also cashierless.
  • Brands can let customers try out clothes in retail stores without actually wearing them – via smart mirrors or virtual trial rooms that use augmented reality.
  • Using AR, online customers can see and place products before they buy, bridging the gap between online and offline buying experiences.

From Cash to Cashless: Banking and Payments

The growth in online commerce offers financial service providers opportunities in two areas: non-cash transactions (by customers) and lending to smaller enterprises.
This ushers the growth of digital payment solutions, including wallet apps that link to bank accounts and let users store money on the platform and perform transactions.
Digital technology is gradually transforming the banking and payments landscape in Indonesia. The percentage of Indonesia’s banking consumers that are digitally active has grown 2.5 times since 2014, and they now comprise 32% of the banked population.⁰²
In his talk, Dean Krstevski, COO of Dana.id, threw light on how efficiencies in cashless payment are driving growth for digital payments in Indonesia. He also emphasized that providing a seamless experience to customers across touchpoints is a key driver for growth.

We’re living in an interconnected world where Science Fiction is becoming Science Fact. – Gerd Leonhard, Futurist

Using AI/ML to Drive Retention for Shopping Apps

For marketers in the ecommerce space, clicks and conversions often come with a price tag. High customer acquisition costs make it close to impossible to keep adding more users and grow the top line.
On average for shopping apps, 86% of users churn in 4 weeks of downloading the app.
In short, without focusing on retaining current customers, ecommerce apps are trying to fill a leaky bucket by constantly acquiring users that don’t stick around. This results in low customer lifetime value, hampering brand loyalty and growth in the long run.
Jay Magdani, Product Manager here at CleverTap, talked about how our AI/ML enabled features are helping brands convert, grow, and retain users.
Advanced features like Psychographic Segmentation, and Intent Based Segmentation use machine learning models to determine the propensity of users to perform an action or like a category of product. Similarly, our product recommendations make use of sophisticated AI to recommend products to users based on their past behavior.

Here’s to the Future

Events like this help us understand the pulse of the industry and what lies ahead for the ecommerce market at large. While it was insightful to listen to the talks given by industry experts, listening to the feedback of customers and answering the queries from our prospects was the icing on the cake for all of us at CleverTap.
We hope to see you at the next event!