Brand and Commerce: Connected by Digital Transformation


Digital transformation has become a hot topic, with CEOs talking about it every day and allocating significant budget for it in 2018. In the past, most digital transformation initiatives were about high-end and edgy technologies or solutions. However, now Digital Transformation ROI has been validated across many industries, C-Suites are understanding that it is more important to map out the right strategy rather than implementing complex tech solutions.

Let’s take a look from the perspective of branding and marketing. Under the trend of transformation, “Brand” and “Commerce” have gradually merged into one term, “Brand Commerce”, a term to describe the narrowing of the gap between brand inspiration and consumer transaction. The concept of Brand Commerce has become the ‘North Star’ for brand marketers when reviewing and evolving their own work and methodologies.

Take the example of a brand’s entry in to the Chinese market. In today’s climate, the brand will decide on an online and offline channel strategy, and the local brand channel planning teams work together in an agile way for rapid progress. This is the opposite of the linear and separate ways of working in the past.

To be specific, brand positioning in the Chinese market needs to be worked out in response to specific online channel strategies. Online and offline media strategies and campaign planning need to direct data to inform channel planning. When sales begin, media data, sales data and customer membership data needs to be consolidated and analyzed in time for optimizing the next round of brand and commerce strategy. The fast-paced and complicated way of working presents traditional organizations with many challenges.

From my point of view, Brand and Commerce go hand in hand, and have only previously been separated because of traditional ways of working — using digital to reach, communicate and interact with customers in real time.

A great example for this new era is the story of a female entrepreneur, who found out that her company’s reputation was being damaged by other vendors selling fake versions of her products, so she made the decision to invite whoever bought the fake products to store to swap them for genuine products from her company. Not surprisingly, a lot of customers went to the stores. She saved the company’s reputation, won back customers’ hearts and sales grew three times, driven by more store visits.

This story strongly demonstrates the benefit of Brand & Commerce working together. Imagine, if the same situation happened in your company, how long will it take to go through the discussions with the brand team, marketing team, legal team, operation team and channel team?

When developing a digital transformation strategy, is there a way to evaluate how well Brand and Commerce actually work together? This is where the original thinking framework — the Brand Commerce Digital Transformation Matrix — is used as a diagnostics tool for brand and marketing related professionals.

Brand Commerce Digital Transformation Matrix

Studying this framework, there are few brands located in area (1) of the matrix nowadays. Most brands are moving toward mid-high level, in terms of digitalisation of brand building or digitalisation of commerce.

Take T-mall’s one-to-one brand commerce ecosystem and seamless experience as an example for type (5) in the matrix.

In terms of digitalisation of brand building, T-mall has been known for being a personalised one-to-one medium (Thousand Faces to Thousand People) on its marketplace. This year, the service has been upgraded to “Unidesk” service, which seamlessly synchronises all of Alibaba’s platform data, such as Alipay, Ant Finance and Cai Niao Distribution, in order to provide integrated services to customers in different scenarios. However, it still has some challenges and sometimes recommends irrelevant products to consumers, such as serving unrelated product categories to a given consumer, again and again.

When talking about the digitalisation of commerce, besides desktop and mobile channels, T-mall celebrates the concept of “new retailing” ­– such as T-mall automotive mall, shopping mall, self-service unmanned store and mini supermarkets — with the purpose of covering all online and offline touchpoints.

It’s only a matter of time until T-mall excels in omni-channel selling, but personalised interactions need to improve. From my perspective, truly personalised digital interaction is essential in selecting the right scenarios, targeting certain audiences and creating tailor-made interactions. Coca-Cola, for example, created an “invisible” vending machine that only showed itself to couples walking by for Valentine’s Day.

The incredible thing about it is that it could recognise couples, activate vending function and show a huge, romantic ad when necessary, while the whole experience was “invisible” for other passers-by. In addition, the vending machine would ask names of the couples and print them on the bottle, making the drinks unique to each couple.

There are several elements of this case worth considering. The context of Valentine’s Day, that only couples were targeted and the experience of personalising drink bottles. This is a case of a truly personalised customer experience.

So, how can the Brand Commerce Digital Transformation Matrix help find the right path for traditional firms’ digital transformation of brand commerce?

The banking industry is under strict supervision by Chinese financial departments, especially in terms of privacy, and with the increasing complexity of banking services, it is one of the most challenging industries for digital transformation of brand commerce.

As an example, China Merchants Bank made early progress in digitalisation in China. They created a range of differentiated services, such as the visionary VIP systems like Sunflower, to target different segments of customers. The bank also made attempts in marketing automation to support brand experience and reduce costs. Every month when receiving payments, customers would receive an SMS with contact information of tele-marketing representatives, reminding them to grab the opportunity of buying financial products specifically designed for their salaries.

However, the bank has quite a long way to go in enhancing engagement with customers and improving customer experience, so I’d place them in area 4 of the Matrix.

Brand Commerce Digital Transformation Matrix

China Merchants Bank has the natural advantage of accessing data of customers with debit and credit cards, including all aspects of life, such as shopping, traveling, transportation and shopping area, shopping timing, etc. Customers’ records of income and expenditure naturally become shopping logs, reflecting all kinds of motivations and needs for shopping and financial management. Such data can be extremely beneficial for brands. How to dig out customers’ needs of next steps via data analysis is the question that brand builders should consider for digitalisation.

For instance, for customers who have purchased flight tickets for traveling abroad on tourism websites, they will be preparing foreign currency and completing budget plan in addition to itinerary planning. There’s so much more to guide customers besides promotion and discount messages. On the other hand, for a customer who constantly faces credit card overdraft, what they truly need is a well-rounded financial management plan instead of more promotional messages on loans and overdrafts. Different customers have different needs — we need to use technology, data and creativity to deliver on these expectations

Looking at China Merchants Bank from the aspect of digitalisation of business operations, its branches and communication channels cover a large area. By trying the services offered on different channels, services are neither consistent nor continuous.

Try opening a credit card at the bank counter of a branch in China. When you finish filling out the forms, the clerk will send them to the headquarters and someone will get in touch at some point. What if the mail never reaches the headquarters? Who should customers look for then? Or try calling the hotline and consult membership-related questions. Only one type of question can be answered per time the call is forwarded, i.e. representatives in charge of member events can only answer event-related questions, and your call has to be forwarded again if you want to ask about member login. Therefore, the level of digitalisation of business operation is in the middle, too.

Of course, a complete analysis of Brand Commerce needs in-depth research from both inside and outside the brand. The best route for development can also vary for different industries and brands, so there is not a one size fits all model to digital transformation.

So what actions can China Merchants Bank take in order to improve the level of digitalisation of brand commerce?

Suggestion 1:

Utilize the consumer data with more flexibility, look into their needs in-depth and explore more possibilities to interact with them with more personalized experiences.

Types of analysis supported by UnionPay transaction data

Suggestion 2:

Based on a customer’s personal experience, analyze the business service journey, and prioritize key parts in order to renovate brand experience.

Customer Journey Analysis

Article by Cecilia Huang, Senior VP of Brand Commerce Consultancy, Isobar China Group.

Originally published here.