Walmart joins Microsoft in its bid to buy TikTok. Virgil Wong, chief digital officer (global head of brand, creative and digital) at HGS Digital discusses his analysis on what this latest news means for the retail industry and how it will shape social commerce/customer experience (CX) trends.
Walmart and Microsoft’s potential acquisition of TikTok is consistent with emerging social commerce and social-centric trends in retail and other B2C industries. However, businesses need to position their social strategy as an integrated part of the overall customer experience (CX), since social media should not be limited to ads, marketing campaigns, and sales activities. Platforms like TikTok and other social media platforms will increasingly become critical spaces for brands to fulfill specific needs at every stage of the customer journey, including awareness, research, purchase, use, service, returns/warranty, and repurchase.
While Chipotle, Levi’s, HP, and other retailers have been doing some notable brand-building on TikTok, they do not provide substantive social care. The urgent need to do so is becoming readily apparent as brands become aware of the platform’s promising potential and perilous pitfalls. A skincare company earned over $1M in six months from a customer’s viral TikTok video of their product. But when another user had a severely adverse skin reactionOpens a new window , the brand did not adequately respond. As of this writing, the negative story still appears at the top of Google’s news result when searching for this product.
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A Look at Social E-Commerce
In some respects, social e-commerce follows traditional models of customer engagement over the past 40 years. During the proliferation of megamalls through the 1980s and 1990s, stores situated themselves with restaurants and movie theaters to provide food and entertainment in addition to a wide-ranging shopping experience. Likewise, Amazon juxtaposes its Prime Video films and television programs alongside its Whole Foods acquisition, Prime Pantry, which has 2.5 million sellers, and 12 million products.
But what megamalls also provided was a social experience. Malls marketed themselves as spaces where families spend time together, teenagers hang out, and senior citizens exercise. Spark, Amazon’s social networking platform failed to well, spark, and ostensibly closed last year. Here, Walmart recognized a potentially critical opportunity and unique competitive differentiator – connect to customers socially and emotionally on a digital platform they already love, and they may be more likely to buy online from you over your competitors.
Why TikTok Makes Sense (To Microsoft, Walmart, and Others)
Microsoft is in direct competition with Amazon Web Services (AWS), Google, IBM, and other top cloud providers. In a three-year agreement signed in May 2019, TikTok agreed to purchase over $800 million in cloud services from Google. Nonetheless, this opportunity will also Microsoft to better position its Azure cloud platform for both TikTok and other B2B opportunities.
To stay competitive and avoid customer attrition, every enterprise must ensure that their customer service provides frictionless, omnichannel CX. By effectively leveraging AI, automation, cloud solutions, and real-time data analytics, customer service centers can not only improve performance but also increase efficiency and reduce costs.
For instance, Amazon’s AWS currently offers a set of integrated contact center partner solutions called Contact Center Intelligence (CCI) to allow maximum flexibility in telephony infrastructure and minimum integration barriers. AI and Machine Learning (ML) automation can capture 100% of all customer interaction on voice, email, chat, messaging, and social media. The data can then be used for segmentation and targeting, predicting customer churn and lifetime value, and suggesting the right content or products at the right time via the right channel.
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When it comes to Walmart, they should look to leverage this potential ownership of TikTok to expand on its recommendation engine, algorithms, and behavior analytics to further drive hyper-personalization and improve CX. Increased community involvement in Walmart and TikTok’s social care activities is another intriguing future possibility. Crowd-sourced support forums are already commonplace for both users and developers of software applications. Influencers may be motivated to protect their personal brand by reacting to forums that are critical of products they are promoting or providing support to their followers.
Walmart and Microsoft’s acquisition of TikTok will likely change modern customer expectations for social e-commerce and social care. Working today to upgrade a business’s omnichannel CX strategy is a critical step forward to better drive brand preference, stay competitive, and meaningfully connect with customers.