Korean Retailers Face Air Pollution, ‘Cremmerce’ And A 25 Year High

I recently came across an interesting story which stated that e-commerce businesses were the biggest beneficiaries of the high concentrations of particulate matter which was especially serious in Korea in March and April. Online shopping reportedly surged as more and more people avoided going outside.

As single-person households proliferate and millennials become a leading consumer section, the e-commerce market is enjoying a heyday – domestic online shopping exceeded KRW 10.6 trillion in April, representing a 17.2 per cent rise year-on-year, according to Statistics Korea.

This rise was helped by an increase in the sales of air purifiers, tumble dryers, and food delivered from convenience stores and eateries – all of which was attributed to air pollution.

Advertisements for such products have increased as well. There were 13,400 TV advertisements for air purifiers during the month of March, nearly double the number for the same period last year, according to TNMS, a Korean media data company.

I was impressed with one recent advertisement from a domestic dryer manufacturer. The company launched a campaign with 20 winning product reviews. Its strategy was to connect with shoppers by promoting the product’s convenience and performance based on actual consumer reviews.

As the example demonstrates, advertisements are an effective way to connect brands and consumers online. This has led to the creation of the term “cremmerce,” a portmanteau of creative and e-commerce which attracts e-commerce consumers with creative, witty advertisements that pique their interest in a brand.

The effort shouldn’t stop there, however. Businesses need to accurately assess the effect of such advertisements. Measuring that effect involves determining which marketing channel was used to acquire a certain consumer group and what advertising campaign or promotion was effective in eliciting the purchase decision.

Consumers acquire product or service information through various channels before making actual purchases. A male consumer in his 20s, for instance, enjoys online games and finds information about a brand from video reviews. Having a clear understanding of the reason for the purchase and the channel used allows us to assess the effectiveness of a particular advertisement or campaign launched over different channels.

Another area requiring focus is customer experience. Some 77 per cent of millennial respondents to a recent survey conducted by the Harris Poll, a US market research firm, said their most unforgettable memories were derived from specific experiences, indicating that this new leading consumer group values experiences more than goods.

Some leading businesses are already offering consumer experiences instead of products alone. Lotte Rental, a major local rental company, rolled out the MYOMEE service in 2017 to provide services designed for different lifestyles. It first assesses a customer then recommends products and services that best answer his or her needs. For instance, it recommends children’s items to newlyweds, leisure and sports equipment to avid travellers, laptops to freshmen and new hires, and ready-to-cook products to single-person household consumers, all being experience-based. Lotte Rental has garnered favourable responses from customers for such personalised products.

It’s now 25 years since e-commerce was introduced to Korea. Online retailers initially sold a number of different products comprehensively, but over the years the point of contact between consumers and brands has increasingly become diversified and more complex. Businesses, therefore, need to manage every aspect of the customer journey from product exposure and purchase to user experience, to entice consumers with their continuously evolving needs.

Equally important is the need to solidify customer loyalty by providing new experiences. This effort needs to be made concurrently with the assessment of sales attribution and an analysis of each element responsible. The virtuous cycle of marketing can only be established when customer experience management and attribution analysis go hand in hand.