How online and offline will dominate retail in Asia in 2016

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Innovations in technology are predicted to make progressive strides related to online and offline commerce, thus improving the retail experience significantly in 2016.

With new developments like Google’s Physical Web and Eddystone, we’ve started to get a glimpse of what the future might look like in a perfect online to offline marketing world. But is this futuristic new line of digital marketing really so far away, or are we on the cusp of a new reality?

Here are major trends that I anticipate will lead to progressive shifts in how online retail addressed this year in the Asia Pacific region:

1. Full integration of online and offline

In my last column, I talked about Google’s Physical Web and Eddystone. Technologies like these will enable users and shoppers to communicate via their mobile devices with physical objects, sending their real-time location and behavior to marketers who can now identify them, in exchange receiving more personalized and customized experiences when visiting offline shops.

With these new innovations, the traditional challenges of user anonymity are being resolved. Therefore, we can expect to start seeing user retail experiences that truly bridge the gap between offline and online (O2O) by the mid-2016.

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2. Deep customer insights meet highly targeted displays

How to drive traffic the most effective and efficient traffic to your website is an ongoing challenge for marketers. By “most effective traffic,” I mean traffic that comes from the cheapest source, and “efficient traffic” refers to the frequency at which your traffic will eventually convert (ideally instantaneously).

In the past, one solution was to use a large proportion of marketing budgets to acquire new customers using Google SEM. However, this has proven to be very expensive and less efficient in driving qualitative traffic to a website over time. It is also only focused on capturing demand.

This has driven marketers and budgets to Facebook, where interest-based targeting could be used to find new users. And what happens when everyone does the same thing? Eventually the channel becomes more expensive and less efficient.

Publishers can now address this challenge via the use of an Audiences feature. Both Google and Facebook now have Audiences as a core function in their display offerings, allowing advertisers to target more accurately when uploading emails or finding specific audience demographics. Such technology enables advertisers to deliver the right ads, to the right people, across devices.

Many platforms also use sophisticated look-alike modeling, which lets advertisers target similar profiles of those already targeted, specifically by email. There are also retargeting technologies that can find people that have browsed a particular website, and present them with ads or even specific products from that site.

To complete the value proposition, marketers are provided with reporting that highlights conversions and contributions to online sales. But here’s a little secret: revenue from abandoned carts contribute significantly to these sales numbers.

How many times have you been presented with display ads for products that you’ve already purchased? Well, here is how this happens; let’s say someone has a basket full of goodies, but bounces over to a different site momentarily, before coming back to their basket and completing their purchase. This will cause a view-through conversion, which means that revenue will be attributed to the retargeting campaign, even if the purchase occurs without clicking on the display ad. Retargeting companies focused on pricing for cost per click (CPC) or cost per action (CPA) models make a lot of money this way.

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Going back to Google and Facebook, the ability to target someone specifically is great, however it is important to know the context in which a user/shopper is being targeted. How do we link both audiences and standard retargeting to the purchase cycle as well as to the interaction a user has with your brand?

In 2016, we will start to see the emergence of more quality identification technology that is able to work across mobile devices and computers. Marketers will be able to find users and send contextual display ads that feature the right product or coupon, on the right device, with incentives based upon insight regarding what really makes the user tick. This delivery will also be matched with the right objective based on where the customer is in the lifecycle.

In the beginning, identification will probably range between 30 and 50 percent of the users, but I predict we’ll see these numbers increase as the technology evolves. Though these advancements are on the horizon, this level of sophistication will only occur once matching email addresses to third-party cookies becomes feasible. More importantly, this cannot happen unless multifaceted user insights are aligned with intelligent advertising platforms.

3. AI driven marketing

Artificial intelligence will be one of the hottest topics in the tech industry in 2016. Just recently, Google launched TensorFlow, a very powerful artificial intelligence and machine-learning open source software.

Here is an introduction:

Added to this is a recent announcement to commit $1 billion to researching artificial intelligence from a group of Silicon Valley entrepreneurs, which includes Elon Musk, chief executive officer (CEO) of Tesla.

How does all this come into play for the marketing landscape?

Marketers today are very operative. First, they think about an idea or a campaign, then they automate it with either display ads, email campaigns, push messaging, social releases, and so on. After that, they test against it and continue to optimize. They go through this process again and again and again, and do so because of the vast amount of variables and data sets that need to be taken into account to get the best results. With this process, solutions rooted in artificial intelligence will change the lives of the marketers and their audiences, helping each make more informed decisions.

Think about the type of software needed to create the customer journey and then execute after uploading all the necessary data and required content; this year, marketers can expect some of the functionality affiliated with this process to be automated. Expect this progress to in ways that will cover most of the operational decisions marketers make today, and for this evolution to continue over the next three to four years.

4. Messaging dominates media activity

Over the past five years, messaging has become one of the fastest growing online channels, according to Activate’s Tech and Media Outlook 2016. Messaging has developed more quickly than social media, coming only in second to the time spent online by users globally. By 2018, messaging is expected to grow by an additional 1.1 billion users.

The global messaging space continues to be dominated by Facebook Messenger and WhatsApp. In the Asia Pacific region, local players include China’s WeChat, Japan’s Line, and Korea’s KakaoTalk.

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Messaging services are now accessible by third-parties, thus resulting in an explosion in of real-time offerings for services, including booking taxis, making payments for practical necessities like utilities bills, music and television entertainment, games, stickers, e-commerce capabilities, video, and live voice calls. The messaging app has transformed into a hub of communication and consumption of services for users, creating monetization possibilities for both for media owners and third-party developers.

So, what can digital marketers ultimately expect for 2016?

In conclusion, the integration of online and offline real-time marketing opportunities isn’t something we can hope to see somewhere in the future, as what was once a fantasy is finally materializing into reality. Now that these technological innovations have made linking these contrasting realms much easier, wise marketers and retailers will take advantage of this progress immediately….will you?

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