Avatars, live streaming and other technological advancements are helping customers connect while social distancing amid the coronavirus pandemic.
During the closings, shoppers wishing to visit physical stores are limited to essential retailers, including Walmart Inc. WMT,
Target Corp. TGT,
and Costco Wholesale Corp. cost,
Even as lockdowns are lifted, some are reluctant to return to stores, boosting e-commerce in new — and sometimes unusual — manners.
With digital shopping accelerating, Wormhole is a technology platform in beta mode that creates real-life simulations of group shopping using avatars or graphical representations of people.
Wormhole users receive a notification that someone they know makes a purchase, either in a physical store or online. With the click of a button, users are brought together at a local store, on Rodeo Drive, or anywhere else they’d like to be. Once their avatars are in one place, they can chat about items, make comparisons, and do just about anything someone would do in a store or mall.
According to Wormhole executives, the platform brings together elements of online interaction, gaming and shopping in one place.
“What Wormhole Does — and what digital shopping needs — is something very natural that doesn’t change consumer behaviors, doesn’t make them buy a bunch of hardware,” said Curtis Hutten, CEO of the company.
Wormhole recently partnered with MagicLinks, a social commerce company that works with influencers and brands.
“You can shop together and still do it safely and get a great deal,” Hutten said. “It’s great during COVID-19 and great after COVID-19.”
In April, data showed that less than half of consumers felt safe shopping in a variety of store formatsfrom supermarkets (45%) to shopping centers (33%).
“ “We don’t believe the shift to online shopping will reverse when the pandemic ends, as consumers develop new shopping habits.” ”
A McKinsey report said more than half of consumers want stores to follow safety guidelines for the sake of shoppers and workers, and 59% said it’s important stores aren’t crowded.
The shift to e-commerce, which began years before the spread of COVID-19, has accelerated in 2020. E-commerce is expected to jump 18% in 2020, up from a previous forecast of 13%, according to an eMarketer report from June. . Total sales are expected down 10.5% to $4.894 billion.
“We do not believe the shift to online shopping will reverse when the pandemic ends as consumers develop new shopping habits,” UBS analysts wrote in June. “Technology will continue to improve, making online channels more attractive to consumers. Further breakthroughs are likely to accelerate changes in market share, especially as brick-and-mortar retail moves much more slowly. »
Live retail events are gaining momentum in the United States after exploding in China, generating $63 billion across major platforms in 2019, according to Coresight Research. Experts estimate that live streaming in the United States could reach around $25 billion by 2023.
Coresight notes an increase in the number of retailers and social media platforms in the United States hosting live sales events or partnering with third parties like Amazon Live, which has streamed events from brands such as Levi Strauss & Co. .and for items from Amazon.com Inc. .’s AMZN,
own private labels.
“People are using this as entertainment,” said Brandon Kruse, chief executive of CommentSold, a technology company designed to help small and medium-sized retail businesses manage their businesses. CommentSold powers retailer apps, and in July the company announced a new platform that enables mobile apps to engage in live and social selling.
Kruse says it’s “mind blowing” how many people show up night after night. It forecasts $1 billion in gross merchandise volume (GMV) on the platform in 2020.
“You’re excited because your friends are there,” he said. “You interact first and then shop.”
Live stream attendees receive advanced notification that an event is taking place and the CommentSold Broadcast app showcases it on a retailer’s app and on Facebook. The CommentSold platform will offer product information so shoppers can learn more without leaving the video.
Live stream participants can also talk to each other and the host during the event. Sellers can even see when a VIP has joined the live stream and give them a special welcome.
For people who think this is just about millennials and Gen Z, Kruse says older shoppers are key attendees at live shopping events. The largest demographic using CommentSold is between the ages of 35 and 45, as many live streams take place on Facebook, a platform that many younger users have abandoned.
“We underestimated the value of being able to interact with each other during this time,” Kruse said. “The connection aspect has been misread and misunderstood and now we’re trying to double down on that.”
Some customers don’t really need that level of online engagement, but the convenience of a more personalized shopping experience is what most people hope to get from shopping online.
“Personalization has been the elusive promise of shopping for a long time, since the beginning of e-commerce,” said Julie Bornstein, founder of The Yes, a shopping platform that collects customer information through a series of questions. Yes and no. Bornstein has a long history in e-commerce, including a period at Nordstrom Inc. between 2000 and 2005 when the retailer launched online sales.
Like many new retail technologies, The Yes uses machine learning and artificial intelligence to learn more about shoppers and personalize the shopping experience.
The Yes launched in May 2020, at a time when clothing purchases outside of comfy clothes and workout gear had all but stopped. But Bornstein says customers have used the time during the pandemic to answer questions, which helps with recommendations.
“Right now, fashion is not a category that people spend a lot of money on, but people are creating their ‘yes list’ for what they will buy at some point,” she said. .
Users can also share their “Yes list” with friends.
“There is pent-up demand as people plan to leave,” Bornstein said.
And when they return to stores, shoppers may find that technology is transforming them into a more seamless, contactless environment, thanks to advanced 5G networks that allow a wide range of machines and people to talk to each other. Automated checkout, smart camera-assisted pedestrian traffic management, and gleaned product information without having to pick up an item are just a few of the things 5G makes possible.
“The assumptions we’re making are that it will start in stores and operations,” said Jean-Emmanuel Biondi, director of the retail and wholesale distribution division at Deloitte Consulting LLP.
These networks will have uses in e-commerce once consumers upgrade their devices, but first they are useful for retail and store supply chains in areas such as inventory management, according to Deloitte.
“The impact of the 5G revolution is going to be profound,” Biondi said. “It will be on the various channels.”