EP #42: Customer engagement and retention lessons

Pradyut Hande(Host): Hi guys. Welcome to yet another super insightful episode of the MarTechno Beat, especially curated podcast series powered by Netcore Smartech. Here’s where you gain cutting-edge insights from leading marketers, product champions, and MarTech influencers on all things, user growth, engagement, retention, and personalization. I’m your host Pradyut Hande. And today I’m joined by a couple of very special guests for our very first episode from South Africa. My first guest and co-host on this episode is Yaron Assabi, founder of the Digital Solutions Group or DSG, Netcore trusted partners from the rainbow nation of South Africa. Welcome, Yaron. 

Yaron Assabi: Thank you so much.

 Pradyut Hande: For the uninitiated Yaron is an entrepreneur and strategic consultant with over 20 years of experience in the information and communications domain across the USA, UK, and South Africa. He specializes in the consultancy and implementation of internet-driven customer relationship-building solutions for leading B2C brands. And my next guest on today’s episode is none other than Mr. Shahil Maharaj, MD of Planet54.com; one of the top e-commerce platforms in South Africa that specializes in the retail of fashion, footwear, and tech gadgets. Welcome, Shahil. Thank you so much for joining us today.

Shahil Maharaj: Thank you so much for your attention. Thank you for having me. 

Pradyut Hande: So ladies and gentlemen, Shahil is a business and marketing leader and e-commerce executive with over 11 years of experience in the retail industry. He has been at the forefront of the evolving e-commerce revolution in South Africa. Welcome once again to Yaron and Shahil. And today, ladies and gentlemen, we will definitely gain a lot of razor-sharp insights to our shopping carts. You will gain on all things, e-commerce user growth, behavior, and personalized user experiences. So what do you say let’s get down to a gentleman?

Shahil Maharaj: Go for it. 

Yaron Assabi: Go for it.

Pradyut Hande: Awesome. So Shahil, let’s start with your story in the South African retail and e-commerce space. Could you walk us through your journey leading up to your current role at planet54.com? 

Shahil Maharaj: Thanks Pradyut. I was walking by my one of the days. And someone has called me to the office and said, “Hey! You want to try going online?” And I said, “Yes”. And I just started working. No, I am kidding. 

Pradyut Hande: Okay. 

Shahil Maharaj: At a really young age, the entrepreneurship at a very young age of my life and evolving through the years of retail in the industry. And I think tech caught my attention I think being a young entrepreneur at the time and our group, our company, a holding company is one of the leading manufacturers and suppliers of fast fashion in the country. And 30 plus-minus five years back, we said, how do we vision? And we look in the future of business and business relationships. And that’s where we built a business-to-consumer model planet54.com. And it was just a future vision planning for the group as well. And how do we get into the space of the e-commerce space and the rapid growth that we saw happening in places like China and America at the time? And I think we started about five years ago and we had a really small team. We still are more than lean team. And I think with God’s grace as well, the business has been on a good upward projection moving forward. 

Pradyut Hande: Awesome. 

Yaron Assabi: And Shahil as obviously being pushed up due to the demand and the forefront of COVID-19 and the lockdown this year, I mean, we’ve seen all these crazy different levels that we’ve been going through, some it’s so that I’m sure you’ve heard that the global industry is likely to grow to USD 3.5 billion this year by the end of 2020, what was some of your key challenges and changes in online shopping behavior that you’ve witnessed at the peak of the lockdown. And when did things really start happening and opening up in South Africa? 

Shahil Maharaj: Thanks Yaron. So some of the challenges faced in a broader perspective of South African e-commerce was the trust aspect. Our country from history and from tradition is a country that had a major backlog of technology deal advances within the African continent. And if you take place in like Europe, if you take places like American, especially China e-commerce was, I would say five to 10 years ahead of us in South Africa, especially. And one of our biggest challenges in the global aspects is the e-commerce partners that e-commerce technology, the e-commerce aspects when it comes to the internet of things, what we’ve seen in pre-Covid and suddenly that planet 54 had a major challenge. What was the relationship to the brand and what we’ve done pre-Covid was we opened up the pop-up store that we ran in one of the retail was in Durbin for meant to be for three months? We had it for two years because the customers around the area refuse to actually allow us to leave because of the value. But the interesting part to just touch base on your question was that majority of our customers who walked in, followed us on social. They got our emails, they know about our company, but they were too scared to transact. They didn’t trust the claim payment portal. They didn’t trust the platform. They weren’t, they didn’t understand that I place an order now online; I can get it delivered to me that must a major gap, our younger generation. Yes. Now know it because it’s a norm that they are growing upward, but the older marketing and more, the trust factor market had major problems with it. What we have seen when we came to Covid when the lockdown happened, we did see a major decline in the business, the sales certainly essential what could only control. We published the business in three working days and returned to essential products and services. And when our very good friend, Mr. Cyril Ramaphosa, our President announced that e-commerce is safe to trade. E-commerce is the way to actually move forward. That debt, I think, was a major catalyst for our business to actually push consumers, to shop online where you take the Covid situation right now, before e-commerce and online shopping and any type of tech service and industry were, maybe I’ll try it out. I might not. But what Covid actually does, what was you had to, you have to shop online, you had to go online, you had to use the social distancing and other regulations that have come into place. It forced consumers now to actually shop online, from a safety perspective where they were scared to shop online because of safety. Now they have to shop online because of safety. So it’s a complete switch of where consumers’ mindsets are. They yet, there is a still mess up of the market that is still scared to shop online. That won’t take the blood online, but we also look at the only channel market for those types of consumers. But that just touched the base of where we were at peak and where we are now, when things are opening up, we’ve seen a really good stable growth projection within planet 54 in the e-commerce space. 

Pradyut Hande: Great. I think interesting insight there because how you mentioned digital customers were sort of almost forced to migrate, to consuming online, and all of a sudden those purchase patterns just change. It was not because of just the convenience and comfort that e-commerce brought to their fingertips, but also because it was the need of the, or there wasn’t an alternative as such so that I’m sure played right into the hands of e-commerce players like you. 

Shahil Maharaj: Absolutely yes. 

Pradyut Hande: Alright. You know, at a time when customer acquisition costs very often ease beginning to outstrip customer lifetime value, especially in a lot of our conversations with other e-commerce players across geographies as well. Many online businesses now appear to be adopting customer retention as the new acquisition stance. What are your thoughts on this with regards to the entire e-commerce space Shahil? 

Shahil Maharaj: Thanks Pradyut. So when it comes to customer retention and customer experience as a whole; I personally believe, and this is something that we and our team constantly refine and the beautiful part about our customers. And I’m going to steal a quote from Amazon is that customer that must be satisfied and the beautiful part about that is customers are satisfied. There’s always a need to serve those customer relationships. And when it comes to customer retention is a new acquisition, customer-focused and customer-centric businesses in the e-commerce space is the publishing part for any successful e-commerce time right now, because what you found post-Covid is that and I’m sure you are already as well have something to touch on this as well, is that the amount of businesses that have now pushed and published to go online, space has now become narrower, but the need of requirements for services is still a massive drive for customer service for e-commerce because you’ve now eliminated completely the touch of touch and field eliminated completely. Now, a lot of e-commerce stores have now gone away from call center agents because of the scale and the type of influx that is coming in with orders. So you look at how customer retention is one aspect, but you look at the whole customer experience. And one of the new acquisitions, because what a method thing of e-commerce and e-commerce your customers are e-commerce, and this is something from my personal experience and points of view is they aren’t loyal e-commerce shoppers. When you walk into a retail store, you have a relationship with the brand manager, you know the guy at the cashier, you build this relationship, or what were the people. And when you shopping online, you have so many options that are at your fingertips, being a customer-focused business, in whatever you’re selling in the e-commerce space should be the number one effect, and priority, and customer retention, how you service those customers, how you look after the customer experience in a whole should be always relooked and revamped and working from the customer backward if that makes sense. 

Yaron Assabi: Totally, totally agree. I think these days that takes so many options, right? There are just so many different channels that you can interact with customers via WhatsApp, via SMS, via emails; consistency is a key, right? So we talk about omnichannel and how marketing automation is a way to kind of achieve value at scale. And it’s a key success factor, right? But I think that we’re seeing more and more businesses now trying to personalize the customer experience to your points, Shahil. And I think that’s really, really important to be able to treat different customers differently. And I’m just wondering, what is your kind of like focus areas, how are you guys using marketing automation? Obviously, it’s a hot topic for us. What are the key success metrics that you track around, your marketing automation, and the ability to drive lifetime value and value shared from customers? 

Shahil Maharaj: Thanks Yaron. So I think automation as a whole is a catalyst for scaling any online company today. When you look at resources and the cost of resources, you look at how you actually take a business as a functioning word, A B and C, and you look at scaling the projection growth in the future. Automation plays a massive, massive part in the whole supply chain of e-commerce when it comes to the marketing part, when it comes to the supply chain part of automating orders, automating suppliers, top-ups automating fulfillment requests and feedback, and even take automation and you bring it down to the customer service journey from your tickets, from your queries, how do you help customers? And I know we’ve seen major driving automation and chatbots. And I know, I know Google was with the testing automation on the call centers, you know, where you call in, it’s actually a bot that you’re chatting to, but it’s all automation, AI intelligence that goes into it. And coming back through how you get the marketing automation that helps with resources. I personally say it’s when it comes to scaling and scalability. And before in the back, you’ll need probably about three, four, five, six types of different scale staff to handle the certain requests and stock. And now look at the automation technology that’s out in the market where all of these features can be actually built into one type of application from a marketing perspective. And we look at the data and how it helps customers and automation. And I think we know the old thing of automation and targeting and Facebook and show your content and product that you may have been interested in. I love it. I’m all for it. I know it’s a mess of drive when it comes to certain companies that if you can serve the right product, the right customer at the right time, you will get the order faster and you can fulfill faster. That is the key metric is speed to market. And when you look at the value, it comes down to a product offering or a product proposition. And then how do we, what are some of our metrics that we look at? And I think one thing that a lot of people look at in the e-commerce space is customer retention and your customer return rate. Now we have one that’s 60%. So that’s a good sign that customers are coming back to us for, for products or something is working the formula. And you look at stuff like your average basket value, increasing via customer lifetime value. So if you are on came to our site in his first order, it was $20. His next audit should be for $40 and he’s a lifetime cycle. And his average basket value increases in due time. That means you serving the right customer, the right product constantly. 

Pradyut Hande: Now I think that makes a lot of sense. And I’d just like to reiterate the point that you highlighted there about how marketing automation helps you reach the right customer with the right message or product recommendations at the right time. And I’d like to add the right channel is when, so that’s the four-hour success model, I think a lot of e-commerce businesses are now trying to crack. And in this scenario, we spoke about the importance of being omnichannel today. So I’d just like your thoughts on, you know, what are the marketing channels that are working for you to help drive higher customer engagement and conversions, has this marketing channel mix changed during COVID-19? How do you see this evolve moving ahead as well?

Shahil Maharaj: Thanks Pradyut. So when it comes to the e-commerce space, and I think in general, the rise of e-commerce was also the rise of social media. Those two played a massive hand in both platforms actually becoming successful in each aspect and you look at trends and you look at the worldwide trends and engagement and something that I can speak for our business, it is fast fashion. We trend at least, well before Covid, we tend to be tendered at least about four to six times a year to play connect Europe, London, the highest street fashion. We went to Vietnam; we’ve been full on a place that fashion trends. And we look at how we can create a rate for the South African market. And why am I mentioning that is because our major marketing channel is social media when it comes to Facebook, Instagram, and YouTube. And, but also it’s important to look at the content that you read for these markets. It’s not one type of module that works with all, you know, you’ve got your Facebook and your marketing specific creative has to be created for the Instagram market, where it’s more of a lifestyle, more for high fashion, more for a look from a marketing prescriptive. Then you’ve also got your YouTube. It’s more engagement, more learning, more talking, and much more. The younger market is actually surfing YouTube and engaging on the YouTube platforms. And we’ll finish up pre-Covid in South Africa when Facebook does well even better when South Africa suffers. So that is some of the challenges that we find with that what would be the social media platform because it’s a dollar platform as well. We have seen a lot of, a lot of mergers in the future. I foresee it happening. We’ve got an ecosystem that has a lot of data, a lot of information. And I think we saw a massive move when Facebook announced, I think about a month back, if I recall that a Facebook shop is now going to be a massive driver in the e-commerce space, I think, the boy at Shopify a little bit scared, we want to Shopify as a big partner here, and then the Toby we have got, brought it to the interview, and then it’s going to be an actually a joint venture between those two. I personally see that Facebook may sneakily buy Shopify out in my personal opinion, but that’s what I see post-Covid heading towards when it comes to marketing channels. And it comes through all of these marketing mixes is that a lot of content is going to be aggregated into a lot of platforms. We’re going to make converting much more easy for customers. 

Pradyut Hande: Okay.

Yaron Assabi: Yeah, I think earlier we spoke about personalization and how it’s really become a game-changer. And almost, I think people talk about Amazon in your business or the way you personalize the content for you. And I really think that we spoke about how important it is to treat different customers differently. I mean, when we talk from personal experience, we all like to be treated as individuals, right? So I think that what’s with the advent of technology, now, there’s a lot of capability to try and understand and predict customer behavior and product recommendations as that allow you to increase conversions on your website or to marketing channels. And I’m just wondering how else can e-commerce brands personalized customer experience at scale. And what is your feeling around how you looking to your personalization and recommendations because you’ve got quite a nice variety of products on your website, which means that you can actually get to understand customer behavior quite well and use algorithms to understand what that possibly will do next? Because customers obviously go online for convenience and it’s important for them to be able to get the best recommendations that they will buy, that’s, will be simple for them to have a user experience. That’s great. And, and some simple, I guess simplicity’s key. 

Shahil Maharaj: Absolutely. And I agree with you completely. I think personalization is a massive, massive factor right now with consumers. And I think we saw the trend about a couple of years ago when Nike started personalizing their sneakers and we were all like, wow, it’s unbelievable; and how you take it to the tech space. And yes you, so we currently use product recommendations. We asked to be in the process of moving over to Netcore because of their intelligent AI and algorithms and product recommendation that they have, that serve was onto consumers and to the platform, which is quite amazing. But we look at those product recommendations and the massive message over right now because as you said, the site gets heavier. And when we had a smaller product range, it’s much easier to self-content to our customers, but now when you’ve got a bigger catalog serving the right content to customers is a massive challenge. And we’ve seen it with the small testing we’ve done previously that there is a massive improvement in conversions when it comes to your product recommendations stuff like email triggers on specific product types, certain behavior, that may react to certain personalization. It’s all about being closer to your customer, which I think is one of the biggest factors right now in the market. 

Yaron Assabi: Absolutely true.

Pradyut Hande: Absolutely. And as Yaron also mentioned, it’s so critical to truly understand what your customers are doing and also what they’re not doing on your website or mobile app, because both sorts of behavioral signals are important to understand your customer’s preferences and taste better. So personalization definitely will be a game-changer. I’m sure across both mature and emerging markets like South Africa. And that actually brings me to my final question Shahil; we spoke about evolving marketing channels, mixes the adoption of marketing automation and personalization in e-commerce. And I like to pick your thoughts on what are those three things that e-commerce brands or marketers should actually focus on over the next six months, especially in fast-growing markets like South Africa.

Shahil Maharaj: What are the three things? So I’d say Pradyut that be customer focused on the one, understand your customer, understand all the aspects of your customer, understand their lifestyle value when it comes to family, their lifestyle and, and grow with your customer expectations and grow and nurture your customer because you want to own this customer throughout and lifestyle. So if you have ever been into an e-commerce business, look at what you can do to own this customer, to their lifestyle and the kids and the generations to scale it accordingly. Number two, I would say, solve a problem in the journey. So look at what’s happening right now in the world right now, around in your community, in your area, in your space, and what are some of the biggest problems that consumers are having, and look at solving that problem via e-commerce. Scale accordingly with added value. Treat your customers, and when your company grows scale with them and manage expectations when it’s required. But I would say scale accordingly and always add value to your consumers. 

Pradyut Hande: True. I think the underlying philosophy of being customer-focused and customer-centric remains true, regardless of whether you are an offline brand or trying to crack it in the e-commerce space. 

Shahil Maharaj: Absolutely. 

Pradyut Hande: Right. I think those were really, really awesome insights Shahil. It’s been such an honor and a privilege interacting with you. I’m sure that our global audience will benefit greatly from all that you shared with us, including all the amazing insights that Yaron also shared and all the pointed questions he threw at you as well. We’ve seen how the COVID-19 pandemic has altered consumer behavior inflated demand, and really put the onus on e-commerce brands to realign their martech stack and customer experience delivery, not just from a business perspective, but also to add value to customers and help society and economy in general. So thank you so much once again, for joining us today Shahil and Yaron. I’m sure Yaron has also has something to add to this. 

Yaron Assabi: Absolutely. Thank you so much. It’s so nice to just have a conversation about what’s working and what’s not working. I think as you highlighted South Africa has got some new challenges of trust with the internet and I think that customer experience is certainly one way of building loyalty and your emphasis on customer-centricity is just incredible. And I really, really enjoyed our conversation, but thank you so much for the opportunity, and Thank you to both of you. I thought it was very inspiring insightful and critical for other e-commerce players to learn from your experience. 

Shahil Maharaj: Also, thank you so much you all. I really appreciate it. And you do some great stuff in South Africa as well so congrats on that as well, and Pradyut thank you so much for having me as a guest. And I look to talking in the near future. 

Pradyut Hande: Absolutely. Thank you so much guys, once again, and a big thank you to our listeners as well for tuning in, for more such awesome content, do subscribe or follow the MarTech, keep watching the space from home.