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Time to Re-imagine Consumer Journeys is Now

The full potential of this opportunity will not be unlocked unless e-commerce models evolve to address the core barriers and pain points and stay relevant to these new consumers.

Photo Credit : Ritesh Sharma

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Even as the lockdown has started to open up across parts of India, over 80% of urban consumers continue to be largely at home – and digital is becoming an integral part of their purchase journeys. BCG’s survey with 3,000+ consumers suggest that 50% of urban consumers are likely to increase online shopping. While this, of course, includes existing ecommerce shoppers buying more categories and shifting more spends online, it also includes new users starting to shop online for the first time.

The survey suggests that in the last 100 days alone, 30-40% have shopped online for a category for the first time – accelerating the e-commerce adoption trend in India by at least 2-3 years. The real question is what will ensure that this positive sentiment towards online shopping gets converted into actual online transactions on a sustained basis. We believe that the full potential of this opportunity will not be unlocked unless e-commerce models evolve to address the core barriers and pain points and stay relevant to these new consumers.

The answer lies in understanding the issues consumers had with online shopping in the first place. Consumers loved e-commerce for its convenience, wide assortment and great prices. However, they continued to have concerns around lack of touch and feel, discomfort and mistrust in digital interfaces, the need for guidance in the purchase process and a desire for the “fun element” of shopping. As first time users come online – many of them from smaller cities or older age groups – these concerns are even more heightened.

Social commerce, which brings the human element into customer journeys transactions, can emerge as an extremely relevant model in this context. In many emerging markets, this phenomenon is already quite significant. China’s WeChat allows consumers to have an end to end transaction involving conversation with the brand as well as opportunity to involve friends and family in the buying process. Pingduoduo – which attained a GMV of $15 billion in only two years from launch - allows consumers to connect with one another and buy in groups bringing back the thrill of “negotiating a great deal” with the seller. In Thailand and Vietnam, leading marketplaces like Lazada and Shopee have a seamless chat functionality within their platform allowing consumers to freely connect with sellers and get any clarifications they need - driving 60% and 40% respectively of all e-commerce in these countries.

In India, social commerce is only ~5% of all online transactions. The majority of these transactions are happening in an informal manner – private chats with niche brands or small resellers selling through chat groups. However, these models have gained a lot of traction during the lockdown. Many sellers used chats to actively connect with their customers and assist them through the purchase process. The value proposition of such models is very strong for both new shoppers as well as the mature shoppers.

For first time ecommerce shoppers, this makes the entire shopping experience far simpler. Many of these consumers hesitate to buy online because they are not comfortable with the digital interface or are not sure about the product and need some reassurance. But these issues are addressed when they can “converse” with the seller and clarify any questions they have right there. In our research, we found that 40% of all shoppers who were buying through chats were first time online shoppers buying a diverse range of categories including imitation jewelry, home items and even fruits and vegetables.

For mature shoppers, on the other hand, this can open up new shopping occasions. For them, using chats can help create a much more curated and personalized shopping experience. As one consumer told us “when I was buying through chat, the person recommended many other things to go along with the dress that I was buying… and I ended up buying some imitation jewelry and handbag as well”. Another user mentioned that she uses chats to buy from niche personal care brands she discovers online that are happy to suggest the right products for her skin and hair type. Online shoppers who use social commerce spend 1.5 times more online compared to those who don't.

The case for social commerce models is very strong. For consumers, it solves core issues associated with online shopping, while for brands it provides an opportunity to engage directly with consumers and build a much deeper understanding of their needs. The answer on the exact model that will work in India is not clear yet. Would it be something where the seller acts more like a guide and actively engages with consumers through their shopping journeys? Would it allow consumers to easily connect with each other and enjoy shopping like they would have done in an offline world? What balance of human vs. automated conversations will need to be maintained? All these questions still need to be answered. But what is clear is that that finding a model which can balance the efficiency of online shopping with the need for human interaction in the most economically viable way is what is needed to drive the next wave of e-commerce growth.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Kanika Sanghi

The author is Partner and Associate Director, India Leader - Center for Customer Insight, Boston Consulting Group

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Nimisha Jain

The author is Managing Director and Partner, Asia-Pacific Leader – Marketing, Sales and Pricing Practice, Boston Consulting Group

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