Retailers and brand-owners in Asia, like their counterparts around the globe, have been asking how they can tap into the general increase in consumer confidence as the world economy picks up.
The challenge is to find the right promotional mechanic, while recognising that the prolonged downturn may have permanently made consumers more determined to seek out value.
A OnePoll survey of 1,000 consumers commissioned by Opia has found there is huge untapped potential for money-back offers in the consumer electronics sector of the Asian market.
Exciting consumers
For example, 90 per cent of respondents said they would be more likely to buy a new mobile phone if it came with a 60-day, 100 per cent money-back guarantee, should they not be satisfied.
The majority of Asian shoppers (71 per cent) also picked the 100 per cent money-back offer as their favourite deal from a list of ten different types of sales promotion.
The research also revealed just how big the opportunity with money-back offers could be, because 80 per cent of consumers had never seen such an offer before, leaving a substantial gap in the market for retailers to fill by taking advantage of a first to market initiative.
Discount damage
Perhaps this eagerness is not surprising given that typical sales tools in Asia consist of bundle promotions, discounts, big-pack, and membership specials. Loyalty membership cards, too, are popular, as consumers traditionally prefer to spend their whole shopping basket with one retailer.
In Asia, as in Europe, the response of those trying to disrupt such conservative shopping habits and inject renewed vigour into sluggish sales, is to drop prices – a tactic that undermines a brand’s position and take a terrible toll on the retailer’s end-of-year figures.
True innovation
Instead, the Opia research shows how consumers in Asia are ready for more innovative methods such as money-back offers.
Indeed 24 per cent said a money-back guarantee would be the most important factor influencing their choice when buying a smartphone.
A third of respondents also said they were willing to fill in forms both online and on paper in order to receive their refund, giving retailers the chance to build up an important set of consumer data including demographics.
A note of caution
However, despite the widespread interest in money-back offers among Asian consumers, the research also gave a strong indication of where retailers will have to build confidence.
Three-quarters of respondents (74 per cent) said they might be put off by such deals because of doubts about the length of time it would take to get their money back, while others said they thought it was possible they would never receive a refund.
Other growth potential
The research also showed how few customers in Asia have experience of other types of promotion such as cashback deals in which purchasers of new devices receive a set amount of cash if they apply within a time limit. More than four-fifths (81 per cent) of respondents had never encountered or taken up such offers.
This contrasts with the UK, where research for Opia found that 51 per cent of consumers have taken part in cashback promotions.
Not only did the Asian research show that consumers have little experience of money-back or cashback retail promotions, it also revealed the growth potential for trade-in offers, in which the customer receives an agreed value for their current laptop or smartphone when they buy a new one. Some 64 per cent of shoppers had never encountered or taken up such offers.
How promotions work best
Overall, the research indicates how the Asian retail market is ready for innovative sales promotions. The key is to ensure they are fully managed for risk, underpinned by reliable data and underwritten with solid insurance.
Good customer service is also fundamental to overcoming the scepticism about offers that appear too good to be true. Clearly, any money-back offer directed at an Asian audience needs to shout loud that firstly, a full refund will definitely be made if the customer is unhappy and secondly, it needs to state clearly the time-frame for receipt of payments.
No matter how good the deal, consumers will expect organisations to deliver on their promises and the surest way to build engagement is to have promotions managed by experts with a proven track record who will guarantee full execution and a fault-free experience for the consumer.
Using a risk-managed promotion, company brands and retailers in the Asian market will gain access to the scale of offers that their P&L could never normally handle, potentially leading to a highly profitable sales revolution from which they will be the main beneficiaries.
