Why MDS Collections pivoted to social commerce when Covid-19 hit sales
Singapore-based women’s fashion brand MDS Collections found itself in urgent need of a new sales channel when the pandemic closed all of its stores. The Drum catches up with its co-founders to find out how they decided social commerce was the answer.
“In the midst of Covid-19, we needed to challenge ourselves and try new tactics in order to put ourselves out there and learn something new,” says Joe Phua, the co-founder at Singapore-based women’s apparel brand MDS Collections.
That “something new“ turned out to be working with Taiwanese startup Ikala, the AI-based customer engagement platform that recently raised $17m for expanding into South East Asia.
“The team at Ikala were very engaging and supportive in terms of sharing ideas and insights about how different markets and customer behavior were evolving,” says Phua.
“It took us less than a week to decide to double down on our online presence using social commerce, as it is a model that could be easily replicated by our franchisees. And we ran our first live-selling session about a week prior to Singapore’s circuit breaker [lockdown].”
Working with Ikala also gave MDS a platform that catered to both developing and developed markets across the region as its social-selling tool Shoplus works with large-scale businesses and is mindful about developing markets.
It helped MDS learn different attitudes toward social commerce, such as where people prefer not to checkout through a website or using credit cards.
“Businesses today are hugely focused on being transparent with their consumers and the general public. Social commerce is a tool that naturally allows brand transparency because it encourages real-time communication with customers. It also drives entertainment – I call this blend ’shoppertainment’.
“It’s especially important to provide customers with an engaged, fun experience during a difficult time like this, and social commerce is probably the closest they can get to physical retail.
“Our sales initially dropped by 80% at the start of the Covid-19 period, but with the quick pivot to social commerce we managed to recover more than half of the drop within the same month. Coupled with Facebook ads, the data retrieved through every live session was useful to us in so many ways, such as boosting conversion and cutting costs.
“One great example is the ’intent to buy’ function on Shoplus, which helped us understand how much inventory of a certain product we should stock in order to meet customer demand without overstocking, which can come at a huge cost.”
Sega Cheng is the chief executive officer and co-founder at Ikala. He points out that as adblockers and AI drive a paradigm shift in digital marketing, there is a real need for new channels and content formats to appeal to customers effectively while also getting on their radar seamlessly.
He says smart retail that helps clients sell their products more efficiently on social media, combined with influencer marketing, is extremely important in South East Asia where social commerce is overtaking the online shopping arena.
“Customers are now online more than ever and many brands are reallocating their advertising budgets to performance-based marketing and exploring new customer engagement channels. As futuristic as it may seem, AI is now the core of effective and successful marketing techniques.”
The retail sector has been experiencing a shift online for quite some time now, but the pandemic has given it a final push. Those early to adopt digital solutions were better prepared for the sudden influx of customers who started shopping online during this period as compared to brands who embraced digital commerce at a much later stage.
“Physical retail won’t be the same, in the near future at least,“ says Phua. “Customers who didn’t shop online are doing so now, and customers who already did are seeking out new online shopping experiences such as social commerce.
“We’ve been quick to leverage technology in order to pivot our sales channels, and we’re now focused on replicating this model to our franchisees so that they can enjoy the same results. We are also very vocal and supportive of other entrepreneurs to leverage platforms like iKala to fuel their growth.”