Billions lost from customer friction
Thai businesses lose an estimated US$14 billion (447 billion baht) a year from obstacles and friction around customer purchasing options, according to a report by Facebook.
"Customers have increased their expectations from brands and will cancel purchases easier online than from a physical shop," said John Wagner, county director of Facebook Thailand.
The "Zero Friction Future" report by Boston Consulting Group (BCG), commissioned by Facebook to study Asia-Pacific, surveyed 1,200 Thai customers from aged 18-54 who buy products online and offline.
The study found 90% of consumers in Thailand encounter friction at each phase of their purchasing journey from discovering a product to purchase to post-purchase. Half of Thai respondents give up on their purchase when faced with friction, while 63% of e-commerce customers are likely to drop off a purchase when ads are not relevant to them.
For online purchases, 65% of retail customers expected consistency between ads and actual price, while 66% of e-commerce customers and 67% of financial services customers said they abandon transactions when prices or offers differ from ads.
The $14 billion in lost opportunity ranked second in Southeast Asia after Indonesia. The report estimated the annual opportunity cost of friction in Asia-Pacific was $325 billion.
The study found key industries such as e-commerce, retail and financial services can grow their annual revenue by $2.63 billion, $2.08 billion and $127 million, respectively, if friction is removed.
Mr Wagner said multinational consumer product firms are quite advanced in embracing digital channels for communication. Some Thai businesses are still in the early stages of digital marketing, using them as an opportunity for growth.
"Even in an economic downturn or uncertain political situation, brands need to embrace digital to make the customer experience more consistent both online and offline, and use personalised ads and targeted ads relevant to users," he said.
Facebook has various tools for brands to reach their target. News feed personalisation, Facebook stories and Instagram stories all continue to grow, with 300 million users making Facebook stories and 500 million users making Instagram stories every day globally. There are 3 million business around the world advertising on stories across Facebook, Instagram and Messenger every month.