The New Retail Reality
The COVID pandemic forever changed shopping as we know it. We’ve seen human behaviors change virtually overnight due to the impact of COVID. In fact, 60 percent of global customers changed their shopping behaviors since the onset of the pandemic.
This simple human shift of being at home vs. being “out” had a ripple effect through nearly every business, across every vertical. Many companies were forced to rethink entire business models, including retailers.
Suddenly technologies that had previously been more nascent in retail became an essential lifeline to the industry’s survival. 3D product catalogs, augmented reality try-ons, personalization with artificial intelligence (AI), grocery shopping all within your email inbox, shoppable video — these emerging technologies suddenly became hallmarks of a pandemic shopping experience. Retailers saw firsthand how these tools can inspire audiences and help bring the best of brick-and-mortar online. Consumers also adapted, and became more comfortable using technology to replicate an in-store shopping experience.
As we look back on the past year, and look forward to what’s next for the retail industry, much can be learned from the tech, digital commerce and omnichannel strategies that have helped the industry adapt to a new reality.
Try it Before You Buy it
Extended reality (XR), meaning augmented reality, virtual reality, and 3D tech, allows consumers to “try it before you buy it,” bringing a new level of interactivity to online shopping and ultimately building a stronger brand connection.
From new outfits, to cosmetics, to living room furniture, even prospective car buyers, XR technology allows shoppers to get up close and personal before purchasing, without sacrificing the intimacy of shopping. The speed of 5G was already taking these data-heavy digital video experiences, like XR and interactive creative (AR, VR, 3D) mainstream, but COVID supercharged these virtual tools. A recent Verizon Media consumer study revealed that 63 percent of shoppers are more likely to pay attention to a product when advertised with an innovative format.
For example, Ulta’s AR try-on tool, GLAMlab, had been around for a few years, but saw a huge surge following the onset of the pandemic. XR tools are even changing the shopping experience in real estate. Zillow just released a survey citing 59 percent of millennials would be comfortable putting down an offer based on a virtual walkthrough of a property.
Livestream Shopping as the Next Big Thing
Shoppable video experiences meet viewers where they are, have the potential to unlock valuable user data, and empower brands to connect with consumers through more meaningful interactions. Consumers can get a better sense of what might look best on them or whether it's the right size or shade of makeup via livestream shopping. The experience also creates a sense of community. Livestreamed e-commerce entertainment is already huge in China; video shopping accounts for 9 percent of the country’s e-commerce industry.
In the U.S., shoppable video is heating up, too. From social shoppable video like TikTok and Instagram Reels, to Amazon Live or the video streams hosted by L’Oreal Group’s beauty brands, shoppable video is an evolving and quickly growing space. In fact, last month Verizon Media conducted a survey on shopping trends and how consumers felt their online shopping needs were being met. The research showed that more than 20 percent of consumers have bought a product they've seen in a livestream or on live TV in the last six months. And of the people who participate in e-commerce video consumption, a third do so weekly.
AI is improving the way consumers shop online by filling the absence of human interaction during the traditional retail experience. AI-powered chatbots use machine learning to improve customer experience and help brands and consumers both, and have saved money and resources by providing 24/7 customer service, recommendations and automation of the purchase process. In essence, AI chatbots offer brands a direct dialogue with their customers.
In retail, AI can even pave the way for segmentation and personalization with recommendations that are more likely to lead to conversions. For example, The North Face uses AI to ask shoppers about what they’ll be doing and where they’ll be going in a coat, in return serving a personalized recommendation to help customers find the perfect jacket.
Advancements in AI have also dramatically improved shoppers’ ability to search and anticipate what products they’re looking for. Through AI developments, retailers can gain quicker access to customer information and scale sales faster than ever.
We’ve been spoiled by Amazon.com, Shopify codes, and devices that safely store our payment information. A McKinsey report found mobile payments are 80 percent more important to consumers than they were before the pandemic. According to a recent PYMNTS survey, 70 percent agreed that checkout (including a seamless payment experience) is the most important factor influencing how they view brands or retailers. So much effort is put into keeping customers engaged throughout the online shopping process, the transaction — and maintaining that level of engagement — cannot be overlooked. Simple, safe and saved payments have become the expectation, not the exception.
Creating a Digital Connection
Previously shopping behind a screen left much to be desired, from the personalized experience of going into a store and being helped by a sales associate, to that feeling of discovery while shopping in person. But that’s where tech can — and has — been playing a major role.
When you look at brands that have accelerated in the past year, they connect immersive technology and human connection. The ability to reach a human for customer service support, whether it's via text, instant message chat, video, etc., cannot be overlooked.
In-store services, like makeup or fashion consultations, also drive sales. So many brands have pivoted to use tech for virtual consultations instead, recreating that human connection. Retailers are also tapping startups like Salesfloor that allow in-store associates to connect to shoppers anywhere, anytime.
If you’re able to deliver an omnichannel strategy that drives shopper interest bringing users in, delivering a best-in-class customer service experience with that human connection (via digital tools) is essential.
Technology is unlocking incredible opportunities in online shopping today. These tools inspire audiences and help bring the best of brick-and-mortar online.
Andrea Wasserman is the head of global commerce at Verizon Media.
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