Social media? Yes, why, and yet…

Michele Caprini
In brief
Conversation with Chiara Laudanna, Managing Director of Operations at Retex Group.

From the option of change to the obligation of integration in the offer, for retailers social media will be a sales channel comparable to eCommerce and stores. The lines of demarcation between different areas of digital innovation are increasingly blurred, so it's best to remove misunderstandings and clarify ideas.

26Social? Sì, perché, peròRetex For those operating in the retail industry, the change caused by e-commerce was an obligation; for those who acted as interpreter and promoter, it is a guarantee. I believe this is an obvious premise when talking about social media.

Chiara Until recently, social networks were not an indispensable point of purchase. Facebook & Co. did not seem to have clear advantages and most users, including digital natives, preferred to move to e-commerce websites when clicking the “buy” button. Today, for Gen Z and Millennials, social media are an inescapable commercial reference, and will increasingly be so in the future. You only have to look at the numbers: in 2019 social commerce was worth 65 billion dollars, in 2025 it will be worth five times as much*. COVID-19 has played its part in speeding up this change and these are for sure numbers that underline the need to accelerate.

Retex And in our own country?

Chiara In Italy there are more than 40 million people, more than two-thirds of its population, who use social media, on average, for almost two hours a day. Is it conceivable that retail businesses do not target them?

Retex So, given the importance of the phenomenon, it follows that to stay on the market you cannot ignore them: social networks will be a sales channel comparable to e-commerce and stores. But what does this actually change in concrete terms?

Chiara Even if the final goal is the same, branding and selling involve different logics, objectives, and times to target. There is a world in between social engagement and social commerce and understanding the difference is an important distinction.

Retex In fact, the divide seems clear and the likelihood of confusion the greater risk.

Chiara Yes, that’s exactly so. The first is a key channel for conveying the experience of a brand. However, in conversational logic, due to the participation of many, it is easier for the customer to see who you are, and yo07u cannot hide behind what you promise. The, second, instead, must adapt to the effectiveness and functionality typical of e-commerce, but with a much greater interactivity. Both are complementary to the same end, but they follow different pathways and practices.

Retex What is the course to follow then?

Chiara I have to say that the long experience gained in Retex with WeChat has given us different perspectives than the classic Western perception. Indeed, already two years ago Mark Zuckerberg made it clear how important it was to look at the dominant technology in China, the world’s most advanced digital ecosystem. He looked – and still looks – at WeChat because its typical social relationship system is part of an all-encompassing platform that enables commerce in a context of advanced services available to anyone who uses it, whether it be a single or group of consumers.

Retex A Chinese model also for Italy?

Chiara There are no business models cast in stone. After all, technology expresses its maximum value precisely because of the diversity of the forms of business it drives. With the Pavilion project we are accompanying many Made in Italy brands to success in China, but it is not certain that what works in that country can guarantee in Italy the same results and in the same way, seeing that the market, infrastructures, society and culture are different. However, the very strong innovative drive adopted by Retex in the Chinese market greatly facilitates us in the local application of new forms of social commerce. With eyes always wide open also on other geographic markets where different and unexpected forms of innovation can be observed, depending on the users considered.

Retex Tell us more!

Chiara For us, who act in a global perspective, in the world market there are always signs to be intercepted and trends to be anticipated. I am thinking of India, for example. In that country, Amazon and Flipkart (the giant digital marketplace controlled by Walmart) owe their fortune mainly to the traditional e-commerce of consumer electronics and telephony for users in large urban areas. Social commerce, on the other hand, rewards small retailers serving the middle- and low-income population in smaller cities. The outlook over the decade ahead is highly significant: a sales volume of between 60 and 70 billion dollars, double the entire e-commerce of the country to date. Social commerce as an ally or opponent of e-commerce, the game is of rising interest.

Retex Let’s look at the organizations themselves: what must be done?

Chiara Social commerce cannot be seen as a more or less complete extension of marketing. As said, it is the combination of different objectives, goals and practices. The centrality of information technology structures is beyond dispute, but this, like any other aspect of digital transformation, must be experienced directly and not delegated, by all lines of business that interact with the market. Then there is the decisive aspect of the actual resources and support capabilities that can only be found in the external offer.

Retex Making a difference is not easy.

Chiara No, of course not. But I believe that the combination of “verticality” in typical retail processes that make up our history, and mastery of new technologies give rise to a real competitive advantage. To find the balance between change, risk and results, we must start from there as there is no other option.