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APAC SMEs adapting well to new realities of remote-first business environment – SAP

APAC SMEs are well positioned to adapt to a remote working environment by taking swift actions to implement and adjust remote work arrangements for employees in response to the onset of the COVID-19 pandemic. 77% reported that they adjusted remote work arrangements for employees in response to COVID-19, as compared to respondents in Europe (75%) and the Americas (71%).

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SAP SE unveiled findings for the study Digital Resilient, and Experience-driven: How Small and Midsize Organisations Can Prepare for the New Economy. The study highlights how small and midsize enterprises (SMEs) in Asia-Pacific (APAC) are uniquely positioned to adapt and thrive in the dynamic and distributed post-COVID-19 business environment.

Conducted in collaboration with Oxford Economics, the study also delved into the priorities, challenges, and digital maturity of SMEs in the Americas, Europe, and APAC. Of the total 2,000 respondents, 832 respondents were from the following APAC markets: Australia, China, India, Japan, New Zealand, Philippines, Singapore, and South Korea. A section detailing answers from 240 respondents on the impact of the COVID-19 pandemic was also added to the survey mid-fieldwork.

Adapting To The New World Of Work

According to the 240 that responded to the series of COVID-19 questions, APAC SMEs are well positioned to adapt to a remote working environment by taking swift actions to implement and adjust remote work arrangements for employees in response to the onset of the COVID-19 pandemic. 77% reported that they adjusted remote work arrangements for employees in response to COVID-19, as compared to respondents in Europe (75%) and the Americas (71%).

Additionally, 61% of APAC SMEs surveyed created remote work set-ups for employees during this period, while 69% invested in IT and collaboration solutions to support remote access and/or online learning. Interestingly, 10% of APAC SMEs reported that the pandemic has no impact on their ability to accommodate remote work and maintain employee productivity.

On top of supporting business continuity during this period, many APAC SMEs are also actively exploring new channels to get their products and services to customers (66%, vs. 64% in the Americas and 59% in Europe) and developing new products and service offerings (46%, vs. 40% in the Americas and 49% in Europe). 

“SMEs across the region—like their counterparts around the world—have certain advantages over larger competitors in terms of agility and closeness to the customer,” said Edward Cone, Editorial Director of Thought Leadership and Technology Practice Lead at Oxford Economics. “Yet even before the pandemic, SMEs in APAC also faced meaningful challenges in keeping up the pace of digital transformation.”

Lastly, it was revealed that COVID-19 has significantly impacted APAC SMEs’ ability to compete with larger companies within the same industry, with 45% of APAC SMEs reporting that the pandemic has had a significant effect on their operations and strategies in this area. COVID-19 has also affected the ability to operate at full capacity (45%), the ability of the supply chains to keep up with demands (40%), and the ability to keep existing customers (40%). Some respondents reported that they had to completely restructure business strategy and operations in these areas to mitigate the impact of the pandemic

Anticipating The Road Ahead

Prior to the COVID-19 outbreak, SMEs in the region reported being optimistic about their long-term prospects. Many APAC SMEs expect that over the next three years, their market share (62%), budget/revenue (76%), number of full-time employees (59%), and profitability (78%) will increase somewhat or substantially.

61% of APAC SMEs surveyed created remote work set-ups for employees during this period, while 69% invested in IT and collaboration solutions to support remote access and/or online learning. Interestingly, 10% of APAC SMEs reported that the pandemic has no impact on their ability to accommodate remote work and maintain employee productivity.

Looking ahead to the next three years, APAC SMEs are prioritising improving the customer experience (40%), growth (38%) and attracting new customers (28%). APAC SMEs believe that the key to providing high-quality customer experience lies in high-quality products and/or services (70%), fast and convenient delivery (64%) and competitive pricing (62%), with the customer-service business function bearing the most responsibility for delivering those experiences (cited by 70% of APAC respondents). Upgrading analytics on customer data is viewed as a go-to strategy to improving customer experience:  28% already have done this across the organisation, and 52% have started to. 

Staying The Course On Digital Transformation

With technology set to play an increasingly critical role in helping APAC SMEs achieve business success in the new digital environment, the study also took a closer look at digital maturity levels of these businesses across the region. Many APAC SMEs say they have made moderate progress toward digital transformation (39%), and 21% have made substantial progress or completely transformed; within three years, 19% expect to have completely transformed. In terms of technological adoption, HR/Talent management software is furthest along (66%), followed by Governance and Cybersecurity software (63%) and Finance and Risk management software (59%). Respondents reported that these technologies are either in use in some applications/projects or are already in use at scale.

Mobile devices and mobile business process enablement, and business management solutions (ERP software) share the top spot in terms of pilot implementation, and APAC SMEs are actively considering emerging technologies, AI/ML and Internet of Things (IoT) as their main investment priority.

Obstacles To Overcome

The road to success does, however, bring challenges. Today, APAC SMEs consider the upskilling/reskilling of the current workforce (30%), lack of coordination between different departments (29%), and inability to gain insights from data (28%) as key internal challenges. In terms of external challenges, APAC SMEs cite changing customer wants and needs (40%), competition from larger organisations (39%), and adapting to a rapidly changing marketplace (27%) as obstacles to their business success.

“Today’s new normal requires businesses to pivot and adapt with speed. SMEs in the region seem to understand that the sense of urgency to digitally transform their businesses will give them an advantage through the pandemic and beyond,” said Claus Andresen, SVP & Head of General Business (SME) and Emerging Markets Growth, Asia Pacific & Japan. “With the adoption of an intelligent enterprise strategy, SMEs can establish a digital core that will power the entire organisation, embedding data-driven insights and decision-making processes across the business. This is crucial in enabling business agility, further strengthening the ability of SMEs to adapt to dynamic market conditions.”

“I am confident SMEs in the region will be able to emerge stronger, having forged closer bonds with customers and employees while developing innovative services and products that will put them on a strong growth trajectory as the world economy recovers,” concluded Andresen.

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In-aisle store displays might crowd shoppers and reduce overall sales

Retailers might seek strategies to boost product exposure without also increasing crowding – especially for cart shoppers who may experience greater crowding effects – and that excessive use of in-aisle fixtures will likely dampen sales at the aggregate level rather than increasing it. 

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In a study involving a real-world grocery store, in-aisle displays meant to boost product visibility were in fact associated with reduced sales and purchase-related behaviors, with results amplified for shopping cart users.

Mathias Streicher of Austria’s Department of Management and Marketing presents these findings in the open-access journal PLOS One.

Retailers often place extra product displays directly in aisles in an effort to boost visibility and enhance sales. However, in-aisle displays could increase spatial crowding, which occurs when people feel restricted in their freedom of movement and has been linked with purchase-avoidance tendencies. To help clarify if in-aisle displays result in more purchases, Streicher conducted several experiments with a partnering grocery store.

First, they tracked weekly sales for an aisle containing household, baby and pet staples over a six-week period during which five product-display stands were placed mid-aisle. The stands were then removed for six weeks. Comparison of sales data showed that in fact, sales increased after removal of the in-aisle displays, with the average weekly percentage of total store revenue from that aisle rising from 4.33 to 4.83 percent.

A second in-store experiment in the same aisle showed that people using shopping carts also stopped and physically handled products—behavior previously linked with sales—about 7.05 times more often when in-aisle displays were absent than when they were present. Non-cart shoppers also touched products more often when displays were removed, but the effect was smaller (3.81 times).

Finally, in an online experiment, 200 participants imagined using a shopping cart or basket while viewing photographs of the same aisle from the in-store experiments, with or without in-aisle displays. They tended to rate the aisle with displays as more crowded and reported lower levels of perceived control for aisles with displays than those without, with effects amplified for imagined cart versus basket use.

Together, these findings suggest retailers might seek strategies to boost product exposure without also increasing crowding – especially for cart shoppers who may experience greater crowding effects – and that excessive use of in-aisle fixtures will likely dampen sales at the aggregate level rather than increasing it. 

Further research could address some of this study’s limitations, such as by considering the effects of human crowding, promotional offers on products, and seasonal influences on shopping behaviors.

Streicher adds: “The research shows that adding merchandise into store aisles can actually reduce overall sales by making the environment feel crowded and harder to navigate. Importantly, this negative effect is even stronger for shoppers using carts, as they experience greater spatial constraints and reduced control while shopping.”

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Structure of online reviews shapes their helpfulness

Reviews that grow increasingly positive are most helpful to readers, while those that turn negative are least helpful. For average-rated products, progressively negative trajectories enhance helpfulness, whereas reviews that start negative and grow positive are least effective.

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A study of nearly 200,000 Amazon reviews shows that the usefulness of online product reviews depends not only on what is said, but on how the information is structured.

The researchers, from the Universities of Cambridge and Queensland, studied Amazon reviews for products ranging from clothing to food to electronics. They found that how the information is organised matters as much as what is said, and that different review structures are more or less helpful, depending on how highly the reviewer has rated the product.

Their results, published in the journal Scientific Reports, could help companies and third-party review platforms design their review pages to prompt the sort of reviews that will be most helpful to potential customers.

For example, a reviewer assessing a laptop might praise its performance and design while criticising its battery life, so how should such information be structured to be most useful to the reader? Should the review begin with criticism and end on a positive note, or start positively before turning to drawbacks?

“Any target of evaluation typically has both positive and negative aspects, which makes crafting evaluative messages challenging,” said co-author Dr Yeun Joon Kim from Cambridge Judge Business School. “The key question is how to structure these elements within a single message. For example, one might present criticism upfront and then move to praise, or instead integrate negative points within an otherwise positive evaluation. Yet research has paid little attention to this structural dimension.

“We wanted to understand whether certain structures are consistently more effective, or whether their effectiveness depends on the performance of the target being evaluated.”

The study was based on 195,675 reviews of 5,487 distinct products, and assessed performance and related factors, and a helpfulness score as measured by reader votes.

The researchers identified nine possible structures of online reviews ranging from Type A reviews that start positive and become more positive as they go along, to Type I reviews that start negatively and become even more negative – with lots of variance in between.

For highly-rated products, reviews that grow increasingly positive are most helpful to readers, while those that turn negative are least helpful. For average-rated products, progressively negative trajectories enhance helpfulness, whereas reviews that start negative and grow positive are least effective. For low-rated products, reviews are judged most helpful when they open constructively before introducing criticism.

“The results are nuanced but very clear,” said co-author Dr Luna Luan from the University of Queensland, who carried out the research while earning her PhD at Cambridge Judge Business School. “Looking at the overall sentiment of reviews does not fully translate into message effectiveness. It is the broader structure of sentiment – how positivity and negativity evolve throughout the review – that shapes how readers interpret online reviews.”

“Our findings have practical implications for how platforms and companies can design review pages in order to elicit the sort of reviews that will be most helpful to readers based on how highly products are rated,” said Kim. “For example, instead of simply asking ‘Write your review here’, the online review form could instead include micro-prompts that guide how reviewers structure feedback in a way recipients find most helpful.”

The researchers found the most commonly used review styles are not necessarily the most helpful to readers. In particular, for average- and low-rated products, the structures that reviewers tend to adopt often differ from those that readers find most useful.

This mismatch likely reflects different underlying motivations. Reviewers are not always writing to maximise usefulness for others, but may instead be expressing their own experiences, frustrations or emotions – especially when evaluating products of moderate or poor quality. As a result, review writing often serves both as information sharing and as a form of self-expression. This helps explain why widely used review styles do not always align with what readers perceive as most informative or helpful.

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Reversible words can lower consumer disbelief in ads

A simple word choice in marketing messages can significantly impact how confident consumers feel about believing – or not believing – a claim.

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It’s estimated that consumers experience hundreds if not thousands of marketing messages daily. While the exact number can depend, how much someone believes the message can be more important for marketing success than the number of messages they see. 

A new study reveals that a simple word choice in marketing messages can significantly impact how confident consumers feel about believing – or not believing – a claim. Researchers found that when words differ in their “reversability,” or how easily people can think of their opposites, it can trigger different mental processes when consumers evaluate marketing language. 

Imagine the messaging options for a new sunscreen designed specifically for those who like a strong scented product. The first product description reads, “The scent is prominent,” while the second notes, “The scent is intense.” The word “prominent” is uni-polar, meaning people tend to negate it by adding “not” to the original statement.

“Intense,” though, is a bi-polar word, meaning readers can easily come up with its opposite meaning and negate the statement by replacing it with its antonym. In this example, “The scent is mild,” instead of, “The scent is intense.” 

“When people encounter easily reversible words, like ‘intense’, in messages processed as negations (mild), they experience lower confidence in their judgements compared to words that are hard to reverse, like ‘prominent,’” explained Giulia Maimone, a postdoctoral scholar in marketing at the University of Florida Warrington College of Business. 

Across two experiments of more than 1,000 participants, the research demonstrated that this effect occurs because negations of bi-polar, or reversible, words engage a more elaborate cognitive process requiring additional mental effort, resulting in lower confidence of the statement’s truthfulness. 

Based on their findings, the researchers suggest that marketers take this advice when crafting language: for new products, use affirmative statements with easily reversible words, like ‘The scent is intense’ in the sunscreen example, which most consumers will judge as true with high confidence. Importantly, this language would also minimize the confidence of consumers who will be skeptical about the message, as they will process it via a more complex cognitive process that reduces confidence in those consumers’ disbelief. 

“This simple lexical choice could help companies maximize confidence in their desired messaging and minimize confidence among the doubters,” Maimone explained. 

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