Retailers have continuously refined the science of merchandising, but the evolution of the Internet and e-commerce has been an enormous catalyst of change. In fact, with 19 million new Internet users expected in Southeast Asia by the end of 2020 according to Accenture, e-commerce is and will continue to be one of the fastest growing markets in Southeast Asia.
But the art and science of 'click and mortar' is just beginning to take shape. eMarketer reports that more than 80 percent of shoppers who visit an e-commerce site do not know what they want to buy. Which means that in a US$15 trillion global retail industry, there is a lot of opportunity for marketers to shape purchase decisions.
In 2014, merchandising continues to re-invent itself with three important trends: Discovery, Seasonality and Compression.
- Using news feeds for discovery
In the early days of the Internet, we searched the Web to find products we'd seen offline. Today, there are social media sites like Facebook that provide us with 'feeds', and the challenge is getting your product seen on someone's feed.
Businesses have been leveraging feeds such as Facebook's News Feed as a digital shopping aisle to showcase products and drive purchase. Retailers will also begin investing more in the art of digital discovery as they recognise the benefits of user endorsement—that is, creating incentives for their target audience to share their products on social media, so it can be seen by everyone else. For instance, Singaporean brand Ministry of Retail implemented a voucher giveaway application on Facebook where fans were encouraged to "like" and "share" about the contest in order to increase their chances of winning. This increased their fan base by 500 percent.
- The evolution of seasonality
Traditionally, the holidays were tent poles for retailers' marketing campaigns. While holidays remain important retail moments, digital technology has expanded the definition of seasonality. These days, trend jacking opportunities are aplenty—and if used tastefully to market a brand, can draw positive returns. Customers need a push to shop and timeliness is a key motivator.
During the June 2013 haze crisis in Singapore, many retailers quickly engaged people to deliver timely digital content. Starhub took to Facebook to offer free TV previews to viewers stuck indoors, while Cadbury posted content on their Facebook page with the slogan 'Haze driving you nuts? Have a haze-lnut!' Both brands cleverly swooped in on the opportunity provided by the deplorable weather conditions to market themselves on social media.
- Compression forces marketers to be more thoughtful
E-retailers don't have the luxury of a huge storefront. Instead of having a display wall that accommodates fifteen purses, you now have a web page that fits only seven. And on mobile? Just one. With the evolution towards smaller mobile devices, compression forces marketers to be more thoughtful in terms of how to target customers.
In the age of compression, the key to successful merchandising is selling exactly the right product to the right person at the right time. Lazada, Southeast Asia largest online shopping mall, played their targeting cards right by experimenting with a combination of Facebook targeting tools. With Custom Audiences, they were able to use their own contact lists to reach customers with targeted ads on Facebook. The Optimised CPM function also allowed Lazada to prioritise marketing goals, and then automatically delivered ads accordingly.
While every retailer, big or small, has its own unique set of goals and challenges, one singular thing unites them all; a common mission to connect customers to its products or services. And never before has there been a more exciting time to make that happen.
Deepesh Trivedi is the Head of Ecommerce for South East Asia at Facebook, based in Singapore.
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