Dentsu Inc. Isobar held a seminar at "ADVERTISING WEEK ASIA 2019"
ADVERTISING WEEK ASIA 2019, an event where leading professionals in marketing, advertising, technology, and branding from around the world gather and exchange ideas, was held at Tokyo Midtown in Minato Ward from May 27 to 30.
Amid seminars and workshops led by professionals from various industries, global digital agency Dentsu Inc. Isobar held a seminar titled "Business Evolves from Those Who Know: The Truth About Commerce Experience" on May 30.
Emanuel Flores (Chief Business Transformation Officer, Dentsu Isobar) and Sean Mishra (Isobar US SVP / Global Managing Partner of Commerce) took the stage for the session.
He stated that in 2018, sales increased by 18% year-on-year, accounting for 15.2% of global sales (*1), and presented data showing that over 60% of internet users utilize e-commerce (*2).
He identified marketplaces—such as online malls and flea market apps, which account for 50% of global e-commerce—as the primary driver of this growth. "Marketplaces are evolving into spaces that connect brands and consumers, facilitate communication between them, and ultimately lead to transactions," he explained. "This has created an online business industry worth ¥1.8 trillion, which is expected to grow to ¥2.1 trillion in the near future."
How are Japanese consumer behaviors changing?
Mr. Flores then provided data-driven insights into Japan's e-commerce market.
He described the current situation: "82% of online shoppers refer to online reviews beforehand" (※4), and "One in three people use mobile shopping due to its high convenience. The internet serves as a guide navigating this consumer behavior" (※5).
He further emphasized the importance of Direct to Consumer (DTC) sales—selling products through proprietary channels rather than marketplaces—and stated that the Japanese market must consider the following four points:
- Regarding online consumption and category expansion
Although the population is declining, per capita online consumption is expected to continue increasing. - Regarding upcoming changes in commerce
Mobile commerce is expected to rapidly expand from its current 7% share of total e-commerce to 50% by 2021 (*6). Further investment will be necessary to enable speedy logistics. - Omnichannel
It is necessary to achieve a seamless omnichannel experience where "customers can purchase anywhere and have items shipped anywhere." - Rising Customer Expectations
Customer expectations are higher than ever, and companies must provide satisfying service across all channels.
Proposing Investment in Omnichannel Platforms
Mr. Mishra then discussed how CPG (Consumer Packaged Goods) and retail companies should proceed to continue achieving commerce growth, considering key trends such as "the significant growth opportunities commerce continues to offer," "the challenge of 'saturation' facing marketplaces," and "changes in Japanese consumer behavior."
He proposed that CPG manufacturers and retailers should diversify their strategies and invest in Direct-to-Consumer omnichannel platforms.
While companies cannot control consumer behavior, they can deliver experiences at each touchpoint. He emphasized the need to identify the optimal elements within the process of delivering brand experiences. He also stated that Direct-to-Consumer commerce enables companies to successfully position their brands, set appropriate product pricing, and enhance value.
He further mentioned that investing in Direct-to-Consumer omnichannel commerce allows brands to view customer information holistically. He explained that achieving one-to-one personalized experiences is crucial for truly understanding consumers. Even if two people belong to the same segment, a Direct-to-Consumer approach can provide each with a unique experience, creating valuable moments that offer customers new discoveries.
As commerce evolves toward experience-driven models, Flores emphasized that
- commerce will continue to grow.
- Companies should adopt Direct to Consumer to achieve greater diversification than marketplaces and make better choices for their own brands.
- The mindset of seeking direct connections with customers, not just owning channels, is crucial.
- Take action now.
- By keeping the big picture in mind, consider how to maximize your brand's value.
These five points were introduced to conclude the seminar.
<Notes>
References:
※1: Internet Retailer Estimates
※2: eMarketer 2017 Worldwide Survey on digital buyer penetration worldwide.
※3: Internet Retailer 2018 Online Marketplace Report.
※4: Internet World Stats; ITU; World Bank; CIA World Factbook; Eurostat; local government bodies and regulatory authorities; mideastmedia.org; reports in reputable media.
※5: Global Web Index (Q2 & Q3 2018). Figures represent the findings of a broad survey of internet users aged 16-64.
※6: Forrester - eCommerce Trends and Outlook For Asia Pacific, Excluding China.
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