MAM
A third of MSMEs enhance digital presence during lockdown
NEW DELHI: Digital transformation by Micro, Small and Medium Enterprises (MSMEs) has traditionally lagged behind the expected growth curve. As per Zinnov Consulting, out of the 75 Million MSMEs based in India, 16-18 million have a social media presence, an online listing or a website. Out of five million domain names registered in India, only half have a website behind them.
Ahead of International MSME Day 2020, Endurance International Group (“EIG”), the parent company of web presence brands like HostGator, Bluehost, ResellerClub, BigRock undertook a survey with Indian MSMEs to understand their adoption of digital presence in response to challenges during Covid2019.
According to the survey, approximately 30 percent of MSMEs started a business website or enabled e-commerce functionality since the lockdown started owing to the Covid2019 pandemic. More than 50 percent of MSMEs surveyed / embraced video conferencing tools and WhatsApp to keep business running during these turbulent times.
The importance of digital mediums during this crisis has had a resurgence. Preference for using digital is now approximately ~1.9X more than traditional sales interactions. MSMEs in the educational services segment recorded the highest jump in the importance of using digital mediums.
With lockdown measures in place, the MSMEs who were able to offer e-commerce functionality witnessed revenue contribution from e-commerce increasing to approximately 50 percent of their total revenues. For MSMEs in retail and educational services, increase in revenue contribution from e-commerce was 53 percent and 65 percent respectively.
The negative impact of Covid2019 on MSMEs has been intense with many having to pause or entirely shut their business. In this survey, one third of MSME respondents confirmed that they are temporarily shutting their business until normalcy resumes. This pause in business is more prominent among MSMEs in metros cities and those in the retail and manufacturing verticals. Majority of MSMEs (nearly 60 percent of those surveyed) believe that it will take up to six months for business to return to normal.
MSMEs are seeking support from the government to tide over this crisis. More than 50 percent of MSMEs expect the government to offer tax discounts or exemptions, followed by 36 percent of MSMEs asking for loans at zero interest or cheaper rates.
“Covid2019 has forced everyone to rethink daily life. In response to the lockdown, MSMEs who could embrace digital presence were able to keep some semblance of normalcy and continue to serve or engage with their customers. This crisis has made it imperative to digitally transform our places of work. We are fortunate to be able to aid businesses in their digital transformation journey through our products and services," said Endurance Group- APAC, SVP and general manager Manish Dalal, having web presence brands like HostGator, Bluehost, ResellerClub, BigRock.
According to the survey, lack of technical expertise and the perceived costs of developing a web presence continue to be the key challenges to creating web presence. Due to these challenges, very often MSMEs take assistance from web professionals to create digital presence. India is primarily a DIFM (do-it-for-me) market and web professionals will play a key role in the digital enablement of MSMEs.
EIG caters to small business owners and web professionals, those who help small businesses to come online, through brands such as HostGator, Bluehost, ResellerClub, BigRock. These brands provide the tools and resources needed to build and establish a web presence, be found online, and improve productivity through digital solutions like domains, hosting, business email and more.
Survey Methodology
To understand the digital trends among small businesses during the lockdown, EIG administered an online questionnaire to their MSME customers in the segments of retail, educational services, technology services, independent bloggers, consultant, advertising & marketing, travel and finance. Majority of these MSMEs are in the metro cities. The survey was conducted over the first 2 weeks of June 2020.
Key findings:
● Approximately 30 percent of MSME either started a website or expanded to e-commerce during the COVID-19 lockdown;
● Around 50 percent embraced video conferencing and WhatsApp for business purposes;
● Revenue contribution from e-commerce increased close to 50 percent for MSMEs during COVID-19;
● Preference for using digital is now estimated at ~1.9X more than traditional sales interactions; and
● Approximately 60 percent MSMEs believe that it will take up to 6 months for business to return to normal once COVID-19 ends.
Digital
GUEST COLUMN: How AI is restructuring distributor and retailer motivation models
From incentives to intelligence, AI is redefining how brands engage channel partners
MUMBAI: Artificial intelligence is rapidly transforming how brands engage with their most critical yet often overlooked stakeholders: distributors, retailers, and last-mile influencers. For Abhinav Jain, co-founder and CEO of Almonds Ai, this shift marks a fundamental departure from traditional, transaction-led incentive models toward behaviour-driven, data-intelligent ecosystems. In this piece, Jain examines how AI is enabling brands to decode partner motivations, predict engagement patterns, and deliver personalised, scalable experiences—ultimately redefining channel relationships from transactional exchanges to long-term growth partnerships.
Across many sectors, there is increasing recognition that motivating those who bring products to market (distributors, retailers, last-mile influencers) poses a growing challenge.
Brands continue to invest significant marketing and digital resources to consumers, yet in many countries and the vast majority of emerging economies, these types of consumer-focused investment areas have had little impact on ultimate product delivery. Rather, it is still the case that traditional retail continues to make up most products sold.
So why is it that the systems built around motivating these channels have yet to evolve?
For decades, distributor and retailer engagement revolved around static schemes – quarterly targets, volume-based rewards, and occasional trade promotions. These programs were designed around transactions, not behaviour. The assumption was simple: if incentives increase, performance will follow.
Now, with the advent of artificial intelligence, the definition of performance is being challenged.
With the development of artificial intelligence, businesses can move beyond simply creating loyalty based on transactional-based models and toward models built on behaviours, the behaviours of channel partners that are intrinsic to their motivations in engaging with particular brands. As a result, the means by which businesses develop relationships within their distribution network are starting to evolve; thus, ultimately changing how brands interact with those within their distribution network.
Assessing engagement: Transitioning from transactional- to behavioural intelligence
Traditional loyalty systems refer to transactional activity (sales data). Although this data is valuable and important, it only provides a partial view of engagement across the channel partner.
For example, a retailer may have a high frequency of sales of a product, but their lack of engagement with the manufacturer would not reflect that they have true loyalty toward that brand. Conversely, a retailer who actively participates in training programmes, acts as brand advocates, and is engaged in learning with the supplier would exhibit more profound levels of loyalty but would have been invisible based on historical incentive programmes.
Artificial intelligence allows for the identification of behaviours that help to address this gap. Brands are able to use a variety of engagement data points, participate in learning programs, respond to communications, redeem behaviour and track platform use behaviour in order to identify motivation through behaviour.
McKinsey has stated that companies that leverage advanced analytics for their sales and distribution functions can achieve as much as a 15-20 per cent increase in productivity due to increased awareness of their behavioural trends throughout their networks.
This visibility of behavioural patterns within channel ecosystems can be transformational to brands as they can now view how partners engage on their path to purchasing products, instead of just measuring the sales revenue generated by those purchases.
Predicting motivations, not just measuring performance
Possibly, the largest contribution of Artificial Intelligence (AI) to helping brands engage with partners via channel ecosystems is its ability to predict future engagement versus simply measuring past performance.
Traditionally, brands only realised that a partner was disengaged (not likely to purchase products) once their sales performance had already declined. By then, the brand would have to use significant amounts of incentives or aggressive promotional activities to recovery their partner’s engagement level.
AI models can help organisations to detect early signs that a partner is becoming disengaged, such as declining participation in learning modules, declining interaction via the platform, or slower reward redemption rates. These indicators can help organisations to proactively engage with their partners before their sales performance begins to decline.
The practical application of AI and predictive analytics gives brands the ability to re-engage with their partners prior to their sales performance declines. For example, instead of developing and implementing broad-reaching incentive programs that provide a “one size fits all” incentive to all partners in an ecosystem, brands are able to develop targeted, engaging re-engagement programmes. This is how personalisation can be done on a large scale, such as across global distribution and retail networks.
The vast majority of distributor and retailer channels have thousands, if not millions, of individual channel partners. Historically, providing personalisation to such a large number of businesses has not been feasible.
However, with the advent of AI, personalisation at scale is becoming a reality.
Brands can now create tailored engagement journeys for all their partners, based on their partner profiles, through some combination of machine learning models and behavioural segmentation. For example, high-performing distributors might receive higher levels of leadership-based recognition and greater incentives to continue to grow. Emerging retailers, on the other hand, might be supported with training, onboarding rewards, and measurable performance milestones.
The shift towards personalisation of partner engagement echoes the direction that consumer marketing is already moving towards.
According to Salesforce’s report, over 70 per cent of customers expect personalisation in the way that brands engage with them. As such, there is a growing expectation for B2B ecosystems to have these same types of expectations from their channel partners.
Gamification and continuous engagement
AI is also radically changing how brands will engage with their channel partners through the use of gamification.
Many traditional incentive-based contests and leaderboards would spark temporary engagement among their participants, but they struggled to sustain engagement over time. With the use of AI, gamification mechanics are evolving dynamically based on historical and evolving participation patterns by their channel partners.
Challenges, rewards, and recognition structures can be modified continuously in order to sustain engagement with all of a brand’s partner segments. This will provide a greater opportunity to move away from episodic campaigns towards ongoing, continuous engagement experiences.
When channel partners receive motivation as part of their daily business activities through recognition, learning, and tracking their performance, long-term loyalty will be achieved.
Aligning motivation to broader impact
There is a growing trend within the channel ecosystem to integrate sustainability and socially responsible behaviours into the channel partner programmes of brands.
Increasingly, brands are motivating their partners to use sustainable practices in their operations, participate in sustainable practices like sustainability-related knowledge programmes, or promote products that are in line with their sustainability objectives.
Brands can use AI to monitor and measure these types of behaviours and incorporate them into their incentive frameworks so that brands can align their commercial objectives with broader social and environmental outcomes.
A shift in the way brands view their channel partners
AI is having the most significant impact on the way that brands are now viewing their channel partners, as it relates to the underlying philosophy of those fundamental relationships.
For the past several decades, many brands have viewed their channel partners as intermediaries in the supply chain. More and more brands are now beginning to view their channel partners as key ‘partners-in-growth,’ and their actions can have a direct impact on market performance.
In fact, all the channel ecosystems are using behavioural engagement platforms to design new models that reward not just transactional behaviour, but also create continuous engagement journeys for their partners, where their partners can receive recognition for their participation, learning, and continued engagement, thereby reinforcing long-term loyalty to the brand.
The future: Intelligent channel ecosystems
As we consider what the next phase of channel engagement may look like, many believe that it will be based on intelligent ecosystems, using AI to continuously monitor and adjust the engagement strategies used to engage their channel partners, in real time and based on the behaviours of those partners.
For brands operating in complex distribution networks, the ability to perform well will be determined both by whether products are available to their customers, as well as by the enthusiasm, expertise, and loyalty shown from each channel partner that represents the brand each and every day that they are working on behalf of the brand.
While AI clearly does not eliminate the human aspect of a brand’s relationship with its channel partners, it does allow brands to better understand and nurture that relationship.
In markets where the last mile will determine whether a sale is made, how one leverages the intelligence gained by using AI will ultimately be the difference between gaining a new, sustainable competitive advantage versus losing one.
