Friction during consumers’ online purchases is costing Thai businesses US$14 billion (Bt448 billion) in lost revenue opportunities every year, according to a business study released by Facebook.
“Zero Friction Future”, reports results from a Boston Consulting Group (BCG) survey of 1,200 Thai consumers who purchased products or services either online or offline in key verticals such as e-commerce, retail and financial services. It found 90 per cent of consumer respondents encounter friction at each phase of their journey, and 50 per cent of them drop off once they encounter it.
The report estimates the annual opportunity cost of friction in Asia-Pacific at $325 billion, including $14 billion for Thailand.
The study shows that key industries like e-commerce, retail and financial services could grow their annual revenue by $2.63 billion, $2.08 billion and $127 million respectively if the problems were removed.
The report recommends that businesses embrace digital technologies and introduce a circular framework that is closer to a customer’s real-life experience.
John Wagner, country director of Facebook Thailand, said that it is common for businesses today to advertise their products and services online. The challenge is how businesses can evolve their digital practices to catch consumers’ ever-changing needs and expectations.
Thai businesses should create an omnichannel experience for their consumers’ purchase journeys, using tools such as News Feed personalisation, dynamic and collaborative advertisements, Instagram and its Stories feature, and Messenger for continued customer conversations, said the Facebook manager.
The problem of friction at each stage of the sales cycle highlights the significant role that solutions from Facebook could play in facilitating a seamless consumer purchase journey in Thailand, he said.
“We are determined to help business in Thailand to overcome these challenges. The insights from our “Zero Friction Future” report will help Thai businesses design more relevant marketing strategies, which can help them reduce friction in consumers’ paths to purchase and consequently increase sales,” said Wagner.
By 2020, over half of the connected world will be making purchases online and 85 per cent of customer interactions will be handled without a human. In 2017, around 4 per cent of Thailand’s GDP was derived from digital products and services created directly through the use of digital technologies, and digital transformation will add an estimated $9 billion (Bt282 billion) to Thailand’s GDP by 2021.
He highlighted the 3 million businesses advertising on Stories across Facebook, Instagram and Messenger every month. In-stream video advertising remains a promising asset for Thai brands, he said. Facebook Watch continues to grow locally, with Thailand a leading country for watch times on the service.
Mark Roughley, chief customer officer of Tesco Lotus Thailand, said that retail is changing rapidly, and constantly. Customers are shopping in multiple channels and the more seamless the experience they get with the brand, the more likely they are going to shop with it, he said.
“At Tesco, we provide customers with a range of online-offline solutions ranging from a bar code scanner to mobile app to make the journey as simple as possible. Solutions from Facebook help us reach more of our target audience and provide them relevant experiences that answer their needs with speed,” said Roughley.