Traction December Newsletter

Kia Ora,

Well there you have it – 2022 (almost) done and dusted. And if the second half of your year was anywhere near as productive [read: insanely busy] as ours, you’ll be looking forward to some well earned time off.

To that point, I’d like to take a moment to thank you, our clients and supporters, who have made 2022 such a massive year. We quite literally couldn’t have done it without you.

But before we close the door on this year, we’d like to offer up one last director update. This edition will focus on the macro economic forces that are currently affecting Kiwi businesses on a more micro level, and how marketing may help you navigate the currently choppy waters.

Director update

While markets looked as though they were settling in November, volatility seems to have returned to some in December.

Inflation is beginning to bite for many businesses. While some sectors have managed to return to mid-year spending highs after a brief September and October lull, others have taken more of a hit.

Amongst our own network we’ve noticed that for the most part our eCommerce clients have been able to rebound to previous highs. And many clients in the B2B sector are enjoying pipeline of work extending into Q2 and Q3 of 2023. 

Construction and some discretionary spending sectors appear to be suffering more than most. The former is due to skills and labour shortages and prolonged supply chain challenges that still show no sign of abating. The latter is more likely down to ever more acute cost of living pressures affecting customer spending habits.

Here are some insights, based on client feedback and marketing metrics from the APAC region, that help to paint a picture of the current state of play.

Conversion rates decrease

APAC ecommerce conversion rates are currently sitting at 1.58% compared to 3.56% for the rest of the world, which is a rather stark difference.

The cost of bringing visitors to your website can be considerable, so your business needs to be able to convert them at a decent rate. We recommend that for a business to be sustainable it should aim for a conversion rate of >3%, though this figure can vary from industry to industry.

There are a lot of factors that contribute to increasing your conversion rate: it starts with bringing the right buyers to your website, and once they’re there you need to ensure their experience is simple, intuitive, engaging and compelling.

Consumable businesses bounce back

In APAC the market for consumables took a significant hit in August and September. At the time the media blamed the obvious suspects: inflation and interest rates. But interestingly the market has bounced back quickly, even as interest rates and other cost of living pressures continue to rise.

How did the sector do it? Many have pointed to the fact that in October and November many businesses seemed to double down on Black Friday and other sales promotions. The results were spectacular – some companies saw their conversion rates double, building valuable momentum into the Christmas shopping period.

The large purchase challenge

As we mentioned at the top, the sectors that face the greatest challenge right now are those that demand the greatest spend from their customers: construction and high discretionary spending segments such as luxury goods.

There are no simple fixes to these issues, particularly while the economic landscape remains volatile. But for now, marketing efforts in construction should focus on the return on investment customers can expect from new deals, and the high discretionary spend segment should focus on retention strategies that improve customer lifetime value – it’s far easier and 5x cheaper retaining a current customer versus acquiring a new one, after all.

A traditional transition for B2B

No news is good news in the APAC B2B space. Many organisations are now focused on delivery through December, and as a result search volumes are beginning to decline. While these conditions can push up both competition and the cost to compete, this situation is not unusual for this segment at this time of year.

The bulk of B2B businesses we’ve spoken to are shifting their focus from marketing efforts that drive inbound leads to those that build advocacy and promote brand awareness (though inbound strategies remain very much a part of the marketing mix).

The points above are simply our opinions based on international benchmark data and feedback from our clients and networks. We’d love to hear your thoughts and what you’re seeing in your particular sector, particularly if your experiences differ from ours!

A very merry Christmas!

With Christmas around the corner, it’s fair to say that we’re rather looking forward to a few weeks off to put our feet up and enjoy time with family and friends. It’s also not a surprise that everyone we talk to seems to be feeling a similar way.

We hope you treat yourself to a well earned break and enjoy your festive season to the fullest.

Thanks again for your support and business throughout this year, and we’ll see you in 2023!

Nga mihi,


About the Author: Chris Clarke

Chris leads our team of developers to deliver mobile apps and websites on time and on budget. No brand is too big or too small, having worked with the likes of British Gas, UK Police, Capgemini and some of our homegrown success stories like Streamliners and Ryman Healthcare. He thrives under pressure and loves a big hairy technical challenge.

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