The words emergence and emergency do not normally go together. But then, there is nothing normal in the way e-commerce is transforming numerous industries. The enormity of what lies ahead gets accentuated by the fact that even today, e-commerce globally accounts for less than 10% (8.5% to be precise) of the total retail sales.
The emergency of this comes not only from the change traditional retail can expect, but from the way the two giants of this industry, Amazon and Alibaba, see themselves.
A recent study by e-retailer 11Street revealed that 85% of consumers in Malaysia who have never shopped online before were planning to do so in 2018. However, only 4.4% of people surveyed said they had purchased an item related to health and beauty, compared with clothing and accessories at 73.9%.
FMCG brands that have traditionally focused on meticulous brand building through ad campaigns can now, with the rise of e-commerce, know the precise moment in the consumer journey to influence a purchase and measure the results. But, this brings new challenges which few companies are prepared for.
The first challenge is bringing into view all the new efforts happening in terms of marketing, e-merchandising and media. Leading the space in SEA is Lazada. However, there is an interesting list of new platforms that are starting to fill the space and create opportunities for brands, each with different models and ways to allow for advertising activity. Some behave as walled gardens where all brand activities must happen inside their own marketing and media platforms, and brands do not have a clear view on how their investment converts to sales.
However, I believe companies need to find a way to work around these ecosystems and translate the learnings from one platform to another. This is easier said than done, given that data and what they do with it is highly correlated to the survival of the individual platforms.
Another challenge lies in getting the advertising assets up to speed with the new way of communicating with the consumer, where a brand experience is more focused on driving the consumer to “convert” on a desired action.
New e-commerce-enabled messaging must respond to specific consumer barriers to purchase. Product visuals and descriptions on the e-commerce platforms need to be placed as a clear driver to complete the intended action. This will, of course, mean investigating what’s causing the consumer to abandon a cart, a higher speed to change and adapt the messages, as well as the ability to optimise on the fly.
Traditional FMCG companies are structured to have a set of brand guardians who act as gatekeepers of the brand with every piece of communication by this team. To survive in the new world, companies must democratise the brand and ensure everyone has enough understanding of what a brand can or cannot say or do.
These challenges need to be tackled head on very quickly if any brand, FMCG or not, is to benefit from this growing industry.
The writer is Shiv Sahgal, marketing director, Unilever Malaysia. The article first appeared in A+M’s The Futurist print edition.