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The next frontier of shopping will be live-streamed

  • 01 June 2020
  • 5 min read

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Years before Covid-19 reared its hideous head and gave the world an urgent reason to shop from home, retail influencers were livestreaming inside of boutiques, offering product closeups and even trying on clothes, shoes and jewelry for an online audience. In 2017, livestreaming marketplace ShopShops sold a viewer a second-hand Birkin bag for $14,500 — no returns accepted.

Livestream shopping has been wildly popular — in China, that is. People there are used to watching other people livestream almost everything they do: cook, play or just sit and eat dinner. Smartphone viewing offers a form of entertainment and human connection.

Now, people everywhere else on Earth find themselves wanting those same two things. As we all grow more accustomed to watching, working, talking and buying online, livestream shopping may prove to be the best way to reach consumers in a post-Covid-19 world.

It’s a future many retailers might not have time to consider at the moment, preoccupied as they are with staying afloat in the face of a brutally abrupt economic stoppage. U.S. retail sales fell 8.7% in March. But it’s something that any survivors should be thinking seriously about for the long term. Is it finally the moment to embrace livestreaming in retail? What about virtual and augmented reality and other new technologies? Reasons to say yes have never been stronger: For many goods and services, online shopping is now the only kind of shopping that exists, and that could last well into next year — or until a coronavirus vaccine is widely available. Consumers are being pushed beyond their comfortable analog habits and toward video communications. Just look at the speed at which millions have adopted Zoom, BlueJeans and other platforms to work with colleagues and talk with friends.

This profound shock has also taught retailers how essential it is to be prepared for unexpected crises.

“Those retailers that were not entirely prepared to take their entire stock offerings online are in a state of shock and deep regret,” says Doug Stephens, the founder and CEO of consultancy Retail Prophet, who foresees retailers investing in digital technology much more rapidly. “Brands and retailers are interested in not finding themselves in this level of vulnerability ever again.”

It seems certain that e-commerce will expand faster than it would have absent the pandemic. Over the past decade, it’s grown steadily from about 4% to more than 11% of all retail sales in the U.S. Over the coming decade, thanks to lessons learned from Covid-19 about the importance of having an internet business, online purchases are expected to account for most retail sales.So far, e-commerce has favored the simplest purchases and those easiest to ship: electronics, clothes, household tools and more recently groceries. Harder things to sell online are real estate and cars and hard-to-ship items such as lumber and other building materials. But considering there was a day when no one expected people to buy clothing or shoes unless they could try them on in a store, it’s a good bet that barriers to all kinds of other products will soon come down.

One way to accelerate this is with new technologies, such as virtual and augmented-reality software that let shoppers digitally try on clothes or see how a new sofa would look in their living room. Such technology has been in use for a while, especially in China, where Alibaba uses virtual reality to allow shoppers to browse merchandise in stores half a world away. Amazon and Walmart have been following in the Chinese company’s footsteps.

Today’s crisis makes livestreaming look even more advantageous than virtual reality, because it offers a sense of community as well as entertainment — two things we’re yearning for right now and two essential aspects of shopping. People buy things not just because they need or want them, but because it’s fun to hunt around for them — often with friends and family — and talk with store clerks who can explain the merchandise in detail. (Talented sales associates have made Nordstrom’s popular for more than a century.) Livestreaming can provide something like the same experience when we can’t (or are too reluctant to) go to a store in person.

It’s no surprise then that since Covid-19’s assault on China, Alibaba’s Taobao Live livestreaming platform has surged — the number of merchants using it for the first time grew by 719% from January to February. Consumers are shopping for real estate and cars on the platform. Shanghai Fashion Week in late March was fully livestreamed on it: Viewers could pre-order the clothes the models were wearing on the catwalk, as well as buy pieces from the designers’ existing collections. Even farmers have been using the channel to sell mangoes and other crops. The company was hoping to bring hundreds of thousands more retailers into livestreaming; now that seems inevitable.

Livestreaming will take hold outside China to the extent that retailers believe it can keep their businesses going in a time when people want to avoid crowds. Some may find other ways and technologies to do that. For example, George Watson, a marketing professor at Portland State University, suggests that stores could set up appointments for shopping in order to limit the number of people who inhabit a space at one time. This could be paired with no-checkout systems like Amazon Go and expanded use of digital wallets such as Apple Pay to further assure social distancing.

Such technologies have so far been adopted only slowly in countries like the U.S. But that was in a world where their main virtue was convenience. Now that high-tech retail also offers safety, its appeal is much greater. Plus, a new set of customers are now used to technology-assisted browsing and buying. Soon more entrepreneurs will create livestream shopping platforms for stores of all kinds. Some of the bigger stores and chains may create systems of their own, too. Then, retailers can start crafting livestream experiences too entertaining to resist.

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