Sachinn J Laala and Richard Nicoll, CEO and Chief Commerce Officer & Managing Director at Liquid, share their thoughts on the state of the e-commerce industry in 2021.
What are your predictions for the e-commerce industry in the region in 2021?
Richard Nicoll - I think 2021 will see a continued expansion of choice for how shoppers can buy and that will mean the continued growth of e-commerce in all its forms. However, we are likely to see a consolidation of players as the competition for market share hots up. With that, there will be winners and losers, and all will not win equally. The winners will be those who put shoppability at the heart of their operation and make their platforms places to really shop and not just places to buy.
Sachinn J Laala - 2020 heralded the ‘start’ of e-commerce and 2021 will be the year of growth. This year, e-tailers simply did not have the time to organize or expand their offering - they were simply answering an unprecedented level of demand.
Globally, e-commerce in mature markets makes up roughly 15% of overall retail sales, whereas before the pandemic hit, the Middle East was under 5% and was projected to double by 2024 pre-Covid estimations – meaning we still have plenty of room to grow from where we are today.
2021 will be all about retaining the shoppers that e-tailers have managed to win this year, then to grow and add new users amongst heavier competition than ever before. Loyalty online is a lot more fragmented than offline, so it will be an interesting year where we will see new methods and mechanics that e-tailers will introduce to maintain and grow their market share.
What is the potential of social commerce in the region?
RN: In a word, massive.
The ability to be able to buy across all online channels is huge. Digital receptivity in the region is very high compared to other markets, so the opportunity for digital channels and social platforms to turn eyeballs into sales is enormous. However, to do this at scale will be a challenge and it’s going to need a mind shift for social platforms to turn into retailers – certainly something that can be achieved. On the other hand, I can see evidence that e-tailers such as noon and Amazon are becoming much more ambitious and developing their platforms into richer media channels with content and engagement tactics that will take the fight to the social platforms.
Will social commerce pose a threat to the e-commerce industry or will the two join forces?
RN: I definitely see a blurring of the two – after all, commerce is commerce; shoppers don’t care where they buy as long as the experience is good, the quality is there, and the price is right! At some point, the two will merge and the old definitions will become obsolete, just as separating digital from communications has. What will be interesting is to see where the real commerce innovation will come from – be it e-tail or social platforms. At the moment the game is definitely on!
SL: The reality is that shopping offline in the Middle East is all about entertainment. Asia’s e-commerce ecosystem survives on social media being the key driver to their e-commerce efforts. Joining forces will be the smart move to make as you will drive the user base to come back to the platform for more reasons than one. We have to remember the ethos of social and e-commerce are different; so, the challenge will lay in merging the two in a manner that won’t detract from the user experience.
How should marketeers and agencies tap into this space? What approach would you advise?
RN: Very simply, when we talk commerce, we talk shoppers. So, rule #1 is to put shoppers at the heart of everything you do. In the context of marketing teams and their agencies, that probably means content – creating content that is rich enough to inform, educate, and persuade at the point of e-purchase is what we should all be focused on. Brands should do this to win against competition, and e-retailers and marketplaces should make this possible as it’s the way they will continue to attract traffic to their platform.
I think 2021 should start to think ‘e-retail first’ – making the first point of digital engagement (and that could be on social media or e-store) rich enough, interesting enough, persuasive enough, and functional enough to be the eventual point of purchase.
SL: As Richard said, content and narrative are key! The fundamental reality is that a shopper doesn’t discriminate between offline, e-commerce, or social commerce – they simply have a need and subsequently buy a product to answer that need.
The issue is that there are very few who truly understand all three channels, so the majority of agencies tend to separate them and sell them as different channels to clients who, in turn, have also set up their companies with three-channel leads to manage three separate channels rather than treating them as one holistic sales team that focuses on the SALE wherever it might take place.
At Liquid, we truly believe that the brands that move to this holistic sales approach the fastest, will be the true winners of 2021 within retail.