Forget the FOMO, e-commerce isn’t an ‘all or nothing’ challenge for brands
Havas Market’s Alex Walker reflects on whether social media is really winning the e-commerce battle.
In 1897, Mark Twain was said to have read his own obituary and then remarked, “The reports of my death are greatly exaggerated.”
For anyone who, like me, is a long-in-the-tooth e-commerce practitioner, you may feel empathy with Mark Twain as you read what the pundits say about the current online retail landscape and its supposed demise following the introduction of shinier, new platforms and the rise of social commerce.
Analysts have been quick to question whether the Chinese digital juggernauts, such as the Temu marketplace or the TikTok social media platform, will displace Amazon, Google, and the current e-commerce ecosystem. All this against a backdrop of generative AI and current challenges for direct-to-consumer retail, the doom-mongers are quick to signal that a new era has arrived for the digital realm.
Over the past 20 years, having worked at Amazon, run an in-house ‘etail’ team at a multi-brand global vendor, and now leading the e-commerce function of a large agency network, I recognize that while the shiny and new things garner all the attention and column inches, a more pragmatic and nuanced approach is necessary. Even in the fast-paced world of online retail, the evolution of marketplace and social commerce platforms, while inevitable, will not happen overnight.
Though my background allows me to appreciate the nuances here, a sense of FOMO is certainly beginning to pervade conversations with clients around social commerce, which I have experienced countless times already this year. Anecdotes of overnight successes and hyper-growth stories have sparked a surge in appetite to get involved in platforms like TikTok and its e-commerce offering, TikTok Shop.
My ethos is that these new innovations should be explored as long as connected and integrated approaches are taken. TikTok could form a key pillar of a brand’s test-and-learn growth strategy, but it needs to sit alongside a considered creative and paid media approach to be successful. Much like a three-legged stool, to function effectively, all elements need to be part of the plan.
Activating on nascent social media platforms should not come at the expense of more established platforms like Amazon, but budgets should be distributed incrementally, with holistic consideration. These platforms are new to the retail market, and the reach and high-converting traffic offered by Amazon has immense value for brands. Amazon now holds 26 years of experience in the UK retail sector and is not your typical retailer. Globally, Amazon’s advertising grew 24% YoY from $38bn in 2022 to $47bn in 2023, primarily driven by sponsored ads. Amazon has now expanded its streaming TV advertising by introducing ads into Prime Video shows and movies, where brands can reach over 200 million monthly viewers. It is no wonder that brands that have recognized Amazon’s value and taken ownership of content and advertising execution on the platform are thriving, even taking category share from incumbents who have more cautiously embraced it.
Significant opportunities still exist for brands to level up on Amazon, using the platform’s own advanced data and tech innovations to enhance strategies. A cursory audit of the leading brands on Amazon shows that in nine out of 10 cases, there is considerable room to optimize content and advertising. Many brands are yet to lean into Amazon Marketing Cloud, and the launch of Prime Video Ads earlier this year provides brands with some exciting attribution data.
Making the most of what long-standing platforms have to offer doesn’t mean that the shinier, new ones should be ignored, or vice versa. For any brand that asks whether it should invest in TikTok and its e-commerce proposition, the answer is likely to be yes. But this will always be partnered with the following guidance: invest in optimizing your current channels, too, because the yields of doing so are likely to be significant.
As e-commerce continues to evolve, my advice to brands would be to embrace this transformation and stay curious but to always ensure any strategy is underpinned with a connected commerce and media plan, supported by the appropriate talent, tools and technology.