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eCommerce Mistakes and Challenges Facing Malaysian Companies Today: Interview

June 21, 2016

Kentico Software's content strategy manager Duncan Hendy talks to Computerworld about Web content strategies for Malaysian companies in the eCommerce age. Despite any economic concerns, eCommerce continues to be seen as a burgeoning sector, according to local players. 

Let's start with what opportunities exist for businesses in the current eCommerce sector?

B2B (business to business) businesses are becoming more like B2C (business to consumer) in their expectations. With more and more innovations arriving every day, such as the Internet of Things (IoT), as well as using the Google or Amazon button to collect customer data and allow customers to make purchases more easily. Because there are many different stores with similar products and price is no longer the only defining factor, it is now more about making the buying process easier.

By connecting existing services together and offering a seamless experience, you can offer the full package of services. It doesn't have to be only about going to the cinema, but being able to book the taxi to get there, the cinema tickets, the restaurant for afterwards and then a taxi home at the same time. Or using IoT to connect a company's stationary cupboard to the supplier to automatically order supplies when stocks get low.

In your view, what impact has eCommerce had on Malaysian businesses and businesses across the APAC region?

With Malaysia and other ASEAN countries' access to international markets drastically improved by the founding of the ASEAN Economic Community, eCommerce has had a chance to widen its impact in APAC countries.Taking advantage of the less-than-favourable economic climate in China, the US, and Japan, the ASEAN economy has been enjoying an annual financial growth of five per cent.

eCommerce's inherent global potential has been further helped in the region by AEC's stimulation of trading between member states through reducing the borders between ASEAN countries. This is increasing Malaysia's attractiveness to international businesses as foreign investors embrace the area's very real opportunities. While the region continues to improve its internal processes, a positive impact can be observed in AEC eCommerce's competitiveness. The ability for growth among small to medium businesses (SMBs), fuelled by the optimism that AEC brings, is reflected by its increase in international outreach.

What do you see as the biggest eCommerce challenges are for Malaysian businesses?

[The primary challenge is about] connecting the online and the offline world. Businesses have online customer data, but how do they use that in their offline store? Imagine a customer coming to their physical store and they already know everything about them. They would be able to direct them to a certain area of their store. Some companies use sensors in their stores to map their customers' movements around the shop and then via their loyalty card, they feed this into their online profile. 

It can be used to understand the psychology of the shopper and even to rearrange the layout of their store accordingly.

Choosing the right platform is another challenge. When starting, it is not just about having an online store. There are many technical aspects to consider upfront. For instance, if they have a global business, having a cloud environment and the store being available all the time, and then there is the order fulfilment process. Customers expect faster delivery rates. It might seem easy, but in the background there is a huge and complex mechanism of order fulfilment when stores can either have things in stock or use drop shipping, meaning the items can be shipped directly from the distributor so retailers don't have to carry physical stock.

Plus, understanding the customer expectations when it comes to global markets and being culturally aware-one marketing campaign does not necessarily work in all territories!

What helps or facilitates the online ordering experience?

It's definitely more about the experience. When you are searching for a product, the ability to find it quickly is a must. For example, if you are looking for a laptop with certain parameters, having filters helps you get to the product you are interested in.

Content personalisation - delivering a personalised experience. It's important that when visitors interact with the site and the site has some data on that visitor, it is pushing content that is relevant to their interaction with the system. It's the Amazon-like experience.

Also, websites must be a multi-channel experience. For example, typically, the day is divided by the device they are using at that time. It's quite normal for visitors to be on their PC/laptops at work, and in the evening, on their laptops/tablets/smartphones. So there is the need to be able to connect these devices and to collect their data to create a single view of the customer.

What are the biggest consumer turn-offs when trying to order something from a company's online store?

UX (user interface) issues. Imagine you have a multi-step process to check out, complicated forms, bad navigation, or even error messages. Also, when it comes to product delivery, sometimes the visitor needs the option of expedited delivery for a product faster than usual because of a forgotten birthday, etc. And if there isn't a faster shipping option, visitors will probably leave and go to a store that can fulfil their needs in the desired timescale. Then there are payment options. When a customer is unable to use their favourite payment method, credit cards, or a payment gateway, e.g. PayPal, it totally turns off the consumer.

Additionally, stock inventory being connected to expected delivery dates. It is necessary to know when the products will be delivered. It's important to have these trust factors. This even sometimes has to do with things such as the design of the website. If it looks ten years behind the times, it is difficult to trust that that business is competent. It is not just about the design, it is also about missing or bad images or thumbnails, these all attract people to go to the store and it helps them choose the right product. Plus, comments and reviews on the available products from other customers that are sharing their experience.

What are some of the most common mistakes businesses make when it comes to establishing an eCommerce platform?

The biggest mistake people make is they only focus on their current needs and do not think about the future. If they are only looking for a platform that fits their current needs, they may get into a situation, as they grow, where they will have to rebuild everything and start again from scratch because they cannot plug in more-sophisticated and necessary solutions into their system. So they need a platform that grows with them and does not restrict their ambition.

Having a platform that allows them to attract and market to customers, to collect data, to do tracking, these things can make them more successful. Not having these tools at their disposal will restrict their growth, and could lead to them making bigger investments of time and resources and needing to learn new tools.

In conclusion, how has the rise of eCommerce changed the way Malaysian businesses should market themselves to consumers and what opportunities exist?

The ability to unify the customer journey across all touchpoints and devices has been made easier by the improvement of access to the Internet (67 percent of the population) and a significant increase in mobile use. Malaysia is currently third in mobile shopping growth in Asia, according to a MasterCard's Mobile Shopping Survey.

And an increase in the use of logistics providers within the region for order fulfilment is a further indicator that eCommerce is on a significant rise.

All of these factors are great opportunities to make significant steps in user experience, digital marketing and personalisation. By treating each visitor as an individual and delivering them a personal experience across all of their access points is an essential measure to ensure that eCommerce stores promote brand advocacy.

Using marketing automation to nurture customers and email recommendations based on a comprehensive profile built up by monitoring how visitors interact with the site and their retail history will boost sales. And it is not just within Malaysia, it is about seizing the opportunities that international customers bring. By incorporating an effective order fulfilment process, by reducing 
the delivery period and integrating solutions, such as online marketing, eCommerce and the platform itself,

Malaysian companies can ensure they offer a seamless experience from the first moment a visitor lands on their doorstep. Plus, boosting the customers' trust by making sure that the site payment process is 100 percent secure will reassure visitors that the business really has their interests at heart. 

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Can Current Apple Watch Owners Make the Next Model a Success?

April 16, 2016

Sixty-two percent of current Apple Watch owners already say they'll buy the next model.

If you own an Apple (NASDAQ:AAPL) Watch, you probably really like it. That's evidenced by a recent survey from Fluent, which found 62% of current Apple Watch owners already plan to purchase the next model of the device expected to launch sometime this year. Still, Apple Watch owners are a relatively small group, accounting for just 8% of the survey respondents. Apple is estimated to have sold somewhere between 10.5 million and 14 million Apple Watches in the nine months it was available in 2015, below initial expectations for the device.

KGI analyst Ming-Chi Kuo expects sales of the device to decline in 2016 (despite three extra months of sales) due to his sources indicating the next model will only provide internal improvements similar to an S-cycle update for iPhone. Even with more than 6 million likely buyers built in, Apple Watch unit sales may not start growing until 2017.

What's holding back consumers?
The biggest problem the Apple Watch faces is that it's viewed as an accessory to the iPhone. An expensive accessory. Even with the recent $50 price cut at last month's event, the least expensive model costs $299.

Sixty-nine percent of consumers cite cost as a reason they haven't bought a smartwatch, according to a survey from Kentico, and Apple makes the most expensive models. Even current Apple Watch owners note that price is the biggest disincentive for purchasing the device.

But Apple is unlikely to cut its price much more after it announces the new device. The price cut for the current Apple Watch came about one year after its release, which is the same cycle for its other devices. It would be odd for Apple to announce a further cut three months later. As such, the new Apple Watch models will likely be priced the same as the original Apple Watch prices.

What could make the next Apple Watch model a success?
With price cuts all but ruled out, the only way for Apple to sell more Watches is to make the device more valuable. It can do this with either hardware improvements -- which are reportedly going to be incremental internal improvements -- or software improvements -- which it can design itself or rely on third-party app developers for.

There's still been no breakthrough application for the Watch, and the top uses are basic functionalities like fitness tracking and listening to music. The Apple Watch is very overpriced as a fitness tracker compared to competing devices with more of a focus on fitness.

But the Apple Watch is already the world's most popular smartwatch. That makes it an excellent platform for developers to try new software. Apps are largely responsible for the huge successes of the iPhone and iPad, and they'll drive sales of the Apple Watch as well (or a lack thereof will correlate with a lack of sales).

While Apple Watch owners are standing by, wallets in hand, to buy the next iteration of the device, Apple may have trouble growing sales. Keep in mind that most current Apple Watch owners are big Apple fans, willing to buy just about anything Apple releases, so that skews the numbers a bit. But without a breakthrough improvement in either hardware or software (which, by the way, could still happen), the Apple Watch 2 may "only" sell a few million units this year.

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Time to Get Smart?

March 30, 2016

By Duncan Hendy, Contributor

Each year, digital marketers are presented with the next big thing. Choosing whether to jump onto that current band wagon or pass it off as a fad means either being a digital pioneer, a disappointed optimist, or left behind and catching up later. Smartwatches are just one of those current trends. And while the adoption of new tech is much swifter these days, the danger that they are just this year’s must-have and nothing more can lead to a huge investment into something that fails to prove its worth, even in the long term.

In a recent survey on the Smartwatch Phenomenon, Kentico Software carried out extensive research of 1,000 Internet users aged 18 years and over, across three continents, to discover what the uptake, interest level, and respondents’ opinions of smartwatches are.

The survey revealed that, in the US, consumer interest in smartwatches is high, (nearly 60% would like to eventually own one – 36% within the next year). However, the figures for Europe and the UK are more conservative (under one third of Brits want to own one – 22% in the next year). This could be influenced by the fact that half as many Europeans as Americans know friends or colleagues with a smartwatch (22% in Europe, 44% in US). Peer pressure can have a lot of bearing on purchasing decisions when it comes to gadgets. The desire to be “in” can cause people to buy into a smart tech item based on want rather than need just so that they are not left behind.

When it comes to reasons for resistance, however, 75% of people in the US and 60% of Europeans blame cost as being the main obstacle to their adoption of smartwatches. The next biggest purchase barrier is the lack of a compelling reason to buy – one third of respondents in the US and 44% in Europe say this. This could be because smartwatch functionality is a rapidly developing sphere and is, as yet, still in its infancy – much like smartphones were in the ‘noughties’. As apps become more widespread and clever in the way they utilise the limited screen display, so will the understanding of their practical purpose and the uptake.

And speaking of their actual usage, 46% of Europeans cited the ability to email and text without having to pull out their phone as the most intriguing, while 37% favoured using them to get directions. The next most popular features are voice and video calling (32%), then safety monitoring (27%), real-time alerts such as those from an airline, bank or social network (24%) and finally tracking diet and exercise (21%).

Why Should Digital Marketers Care?

In terms of how smartwatches can be used as a digital marketing medium, the fact that the smartwatch is worn as an item of clothing means it is more integrated into the identity of the wearer – much in the same way a fashion accessory would be. Smartwatches can be perceived by the user as an extension to themselves – as a timepiece, the watch is already an item that they are used to referring to in terms of accessing information. This fundamental factor makes it a more immediate channel for receiving information than retrieving a mobile phone from a pocket or the bottom of a bag.

As another channel of engagement, it is necessary to consider the factor for delivering this content effectively. As the Kentico Digital Survey explains, “content must be retrieved from content management systems in the most efficient way using raw format with no additional markup other than the information that is being communicated to the user. Content management systems that are being used to support content delivery to wearables and IoT tech must provide developers with atomic, robust, and scalable API with tools that can be used to build platform-specific applications as part of an API First strategy. This involves defining the channels one’s API resources are made available on before beginning work on a website or application, making creating smartwatch and other wearable apps relatively easy when done with write-once, run everywhere development platforms.”

Smartwatch Content Will Soon Be King

Having this extra channel to deliver offers and messages based on the location of the wearer is a powerful tool for digital marketers. Trips to shopping centres where content producers can engage with smartwatch owners, enticing them to visit their store at the precise moment that shopper passes their shop front seems the ultimate in personalisation. But the question remains, at what point does this engagement become perceived as intrusion and spamming? The survey revealed that Brits feel strongly about privacy: the majority of British, 52%, would prefer to totally block ads (against 29% in US). And there lies the problem. How do you outsmart the smartwatch wearer?

As was stated at the start of this article, the cunning marketer is the one that keeps their eye on new technologies. And with the sales of smartwatches on the up – an estimated 30 million units sold in 2015, it would appear that they are here to stay. How their functionality and lifestyle adoption finally resolved themselves is anyone’s guess. As with all new trends in gadgets that we weren’t aware we were missing, the user usually defines the market.

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The SmartWatch: Hands On or Hands Off?

March 01, 2016

Every digital marketer worth their salt knows that alignment of the customer journey through each channel is essential for proper customer engagement, but what happens when you have a new channel that is not only uncertain but also incredibly restrictive in what it can actually display? Enter the smartwatch.   Smartwatches have arguably been around since the 1970s. And just like the way in which mobile phones have made significant advances since their first foray into the Internet with WAP, smartwatches have also seen....

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Can Apple Overcome Consumers' Biggest Objections to Smartwatches?

March 01, 2016

Sales of the Apple Watch are off to a good start, but it's not exactly the game changer many investors were hoping for. Many consumers still hesitate to buy a smartwatch, whether it's an Apple Watch, an Android Wear device using software from Alphabet's Google, or a Fitbit Blaze.

The two biggest reasons consumer give for not purchasing a smartwatch are "cost" (69% of respondents) and "not enough reasons to use" (38% of respondents), according to a recent survey from KenticoOpens a New Window.  highlighted by eMarketer. In fact, those are two sides to the same coin: if consumers had more reasons to use a smartwatch, they'd be willing to pay more.

Apple's not going to lower the price
It's highly unlikely Apple will lower the price on its smartwatch. Apple creates premium hardware products that command premium pricing. It competes by providing better value. That's why the iPhone has been the same price for seven years despite lower priced competition taking market share.

Still, other manufacturers making Android Wear devices might drive down the average cost of a smartwatch. But in the long run, cheaper smartwatches may be good for the Apple Watch.

With 38% of consumers saying they don't have enough reason to use a smartwatch, manufacturers face a chicken-and-egg situation. In order to attract more developers to the platform and discover more uses for smartwatches, consumers have to buy them. Proliferating inexpensive hardware will create more smartwatch software developers.

Apple and Fitbit have both gone after the fitness niche with their smartwatches. But the number of people that will buy an expensive fitness tracker is limited even though Apple's brand has taken it further than most.Apple had pent up demand for a smartwatch from its fans and customers leading up to the release of the Apple Watch.

But a strong brand, such as Apple's, isn't always enough. When Fitbit, one of the strongest brands in wearables, launched a rival device to the Apple Watch, the Fitbit Blaze, investors punished the stock because its price point was incongruent with its functionality compared to the rest of Fitbit's lineup. Now, Fitbit's management is saying the Blaze is in part to blame for its poor outlook for the first quarter.

Expanding the functionality of smartwatches means addressing consumers' No. 1 objection: They cost too much. As the functionality improves, consumers will be willing to pay more.

The iPhone as an example
The original iPhone wasn't an immediate hit, either. Starting at $500 (4 GB model), its functionality was limited: no app store, available exclusively on AT&T's network, and only 2G data speeds. In its first full year of sales (fiscal 2008), Apple sold 11.6 million iPhones. Apple isn't releasing numbers for the Apple Watch, but estimates put it at around 12 million units in 2015 since its launch in last April.

Apple iterated quickly with the iPhone and added a lot more functionality thanks to third-party developers. Apple did lower the price of the original iPhone (8 GB model) to $400 shortly after launch to help spur sales. And when the next version came out in June 2008, Apple capitalized on AT&T's willingness to subsidize the phone, bringing the price down to $200 (even though the actual hardware price went up $50 to $650). These price cuts helped proliferate the iPhone and smartphones in general, which ultimately led to innovative mobile apps. As a result, sales of iPhones grew substantially over the next eight years, and now account for about two-thirds of Apple's revenue.

While the Apple Watch may not grow to be as popular as the iPhone (its market is more limited), the latter shows that it can take years before a device gains mainstream appeal. Apple successfully accelerated that timeline in the past with the iPhone, and used what it learned to grow sales of the iPad even faster. The Apple Watch also appears to be selling faster than the iPhone thanks to the built-in ecosystem of Apple users, but it will still take time to gain mass appeal and improve functionality.

Apple should be able to overcome consumers' biggest objections to smartwatches, but not by lowering its price. Just as it ultimately increased the price of the iPhone while adding more functionality, investors could expect something similar from Apple Watch.

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Australians are very interested in adopting smartwatches but are still holding back because of the prices

February 23, 2016

A just-concluded survey of over 1,000 people shows consumer interest in smartwatches in Australia is high, with 51.8 per cent indicating they would like to own one in the future, although 71.4 per cent of Australians were concerned about the current cost of devices, which could delay their purchase.

Alarmingly for marketers considering smartwatches as a new platform to further brand, or raise product awareness, 61.2 per cent of Australians state they would like to block (be that selectively or entirely) any advertisements that could appear on their smartwatch; although 13.3 per cent of people would be open to proximity / location based offers from local merchants. This aversion to receiving advertisements on their smartwatches contrasts with American survey respondents where 71 per cent of people would be open to at least some form of advertising on their device.

What do Australians plan to use smartwatches for?

The survey, undertaken by Kentico Software, provider of an all-in-one CMS, e-commerce, and online marketing platform, showed of those Australians interested in purchasing a smartwatch, 74.1 per cent of people plan on using a smartwatch for personal, not business use – with only 2.3 per cent of people indicating they would use a smartwatch primarily for business purposes.

The second most popular smartwatch feature for Australian consumers, after ‘sending and receiving email and texts’ was actually ‘tracking diet and exercise’ with 36.9 per cent of all survey participants saying this feature was of most interest to them. This compared to only 18.9 per cent of Europeans saying the diet and exercise functions were key to their interest in smartwatches.

“That ‘tracking diet and exercise’ is perceived to be one of the most popular smartwatch features to Australians, and interest in using the devices for businesses purposes is so low, shows how local consumers view the smartwatches as a lifestyle tool with different capabilities and advantages compared to other advanced communication tools like smartphones,” said Wayne Jasek, Director of APAC Operations for Kentico Software.

“Businesses looking to market themselves to consumers via smartwatches will also need to ensure their activities are targeted and meaningful given the reluctance of Australians to receive adverts on these devices.”

What are Australians looking for in a smartwatch?

Key smartwatch features of interest to Australian consumers were:

Sending and receiving email, texts: 42.4 per cent
Tracking diet and exercise: 36.9 per cent
Placing and receiving phone and video calls: 35.3 per cent
Getting walking, driving, or mass transit directions: 32.9 per cent
Real-time alerts such as those from your airline or bank: 24.3 per cent
Safety monitoring (Senior citizens, children, pets): 21.2 per cent

Surprisingly, the survey also showed that despite mass awareness of, and some direct exposure to, smartwatches – 34.1 per cent of Australians know someone that owns one – only 8.2 per cent of Australians say they have a good understanding of a smartwatch’s uses; compared to 23.2 per cent of Americans who said that they knew ‘a lot’ about a smartwatch’s features.

“While Australians are renowned for being early adopters of new technologies, it is surprising that only 8.2 per cent of people say that they have a good understanding of a smartwatch’s uses. This shows that manufacturers and retailers need to refine their own marketing efforts to better educate the public around what makes a smartwatch an essential technology,” added Jasek.

*255 Australian Internet Users 18 years old and over (and 1,015 people globally) participated in Kentico’s Smartwatch Survey.