Categories
CEO Insights

Social commerce is rewriting the rules of retail—and businesses must respond

It was late February when the team at iKala noticed a pattern—people in Southeast Asia were using social media to shop more, and they were shopping for more. But none of us could have predicted the accelarating change of pace in 2020, and the year's not even over yet.

To understand the many changes in the landscape, iKala conducted a study over the first two quarters of 2020. On the two key parameters of orders and gross merchandise value (GMV), we found a sharp increase of 115% and 306%, respectively, compared to the same period last year. We saw another emerging trend accelerated by the pandemic: the remarkable rise of live-selling, which rose 13%, due to rapid growth in Singapore and Thailand, and more frequent shopping in Vietnam and Philippines. 

To address these consumer shifts, retailers must act quickly. But many are wary or thrown off because responding to these changes entails reimagining the business, which is often easier said than done. So, how should an organisation approach social commerce?

Take a customer-centric approach

At iKala, we recommend retailers take a customer-centric approach to social commerce, especially when selecting platforms to connect with their target audience. Brands must also consider local audience preferences and platform penetration rates when deploying their social commerce strategies. 

In Asia (barring China), Facebook is a key platform for merchants to sell their products, followed by Instagram and Whatsapp. It is for this reason that iKala's Shoplus focused on building social commerce AI solutions for Facebook, the most widely used social platform. 

As a first step, repurposing social pages is an easy and readily available option for a sales channel. Businesses can reach their existing audiences by leveraging already established social media pages, such as their Facebook page, and turning it into an online shop. To run the shop effectively, retailers can then adopt add-on tools such as iKala's Shoplus to create a seamless experience for both the retailers and their customers.

Invest in value-adding technologies

As social media companies add new capabilities to support social commerce, retailers must find ways to make live-selling interactive and seamless. Early adoption is key for brands wanting to keep up, but doing everything at once may not be possible, especially for smaller retailers. 

Instead, start by investing in social commerce capabilities—including real-time predictive analytics, AI-powered order management solutions, social CRM, and high-quality lighting and audio-video equipment. A good example of how to do this successfully comes from Loonnystore, a Thai-based fashion clothing brand has found great success with implementing AI-enabled tools to create an effective and engaging social commerce experience. The company, which was used to doing live streams by manually tracking comments and orders, switched over to Shoplus' AI-driven solution and saved up to 8 hours of manual work, which in turn, led to a 20% increase in orders. 

Treat it as a long-term investment

Although social commerce is gaining popularity quickly, the field knowledge that we have about this promising new sales channel is still in the early stages. With huge amounts of unstructured data being collected, there is a need for a proper social CRM and order management system to integrate all the information and identify key trends. 

It is essential for brands, retailers, and even individual sellers to start looking at social commerce as a long-term sales solution instead of a short-term gimmick. Be willing to experiment with the growing array of social shopping technologies, lay the foundations of a robust strategy and overcome friction points.

Social commerce might be a trend that was accelerated by the pandemic—but we can guarantee it's one that will last well beyond the end of COVID-19. For retailers, the opportunity is theirs for the taking. 

Learn more about social commerce in Southeast Asia: https://ikala.tv/resources/

Leave a Reply