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Illustration by Kevin Whipple
Avatars, live streaming and other technological advancements are helping customers connect while social distancing amid the coronavirus pandemic.
During lockdowns, shoppers who want to visit brick-and-mortar stores are restricted to essential retailers, including Walmart Inc. WMT, +1.37%, Target Corp. TGT, +0.65% and Costco Wholesale Corp. COST, +1.11% Even as lockdowns are lifted, some are wary about heading back into stores, boosting e-commerce in new — and sometimes unusual — ways.
With digital shopping accelerating, Wormhole is a technology platform in beta mode that creates real-world simulations of group shopping using avatars, or graphical representations of people.
Wormhole users get a notification that someone they know is shopping, whether in an actual store or online. With a tap, users are brought together at a local shop, on Rodeo Drive, or anyplace else they’d like to be. Once their avatars are in the same place they can discuss items, comparison shop and do just about anything else that someone would do in a store or mall.
According to Wormhole executives, the platform brings together elements of interaction, gaming and online shopping in one place.
“What Wormhole does — and what digital shopping needs — is something very natural that doesn’t make consumers change behaviors, doesn’t make them buy a bunch of hardware,” said Curtis Hutten, chief executive officer of the company.
Wormhole recently struck a partnership with MagicLinks, a social-commerce company that works with influencers and brands.
“You can shop together while doing it safely and getting a bargain,” said Hutten. “That’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 formats
“ “We don’t believe the shift to online shopping will reverse when the pandemic ends because consumers are developing new shopping habits.” ”
A McKinsey report said more than half of consumers want stores to follow safety guidelines for the sake of both shoppers and workers, and 59% said it’s important that 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 a June eMarketer report. Total sales are expected to drop 10.5% to $4.894 billion.
“We don’t believe the shift to online shopping will reverse when the pandemic ends because consumers are developing new shopping habits,” UBS analysts wrote in June. “Technology will continue to improve, making online channels more attractive shopping options for consumers. New breakthroughs likely accelerate share shifts, especially since brick-and-mortar retail is changing much more slowly.”
Live streaming sales events are picking up steam in the U.S. after exploding in China, generating $63 billion on major platforms in 2019, according to Coresight Research. Experts estimate live streaming in the U.S. could reach about $25 billion by 2023.
Coresight notes an increase in retailers and social-media platforms in the U.S. that are hosting live stream sale events or partnering with third parties like Amazon Live, which has aired events from brands including Levi Strauss & Co. and for items from Amazon.com Inc.’s AMZN, +0.02% own private labels.
“People are using this as entertainment,” said Brandon Kruse, chief executive of CommentSold, a technology business designed to help small to medium-sized retail companies manage their businesses. CommentSold powers retailer apps, and in July, the company announced a new platform that allows mobile apps to engage in live- and social-selling.
Kruse says it’s “mind blowing” the number of people who show up night after night. He forecasts $1 billion in gross merchandise volume (GMV) on the platform in 2020.
“You’re excited because your friends are there,” he said. “You’re interacting first and shopping second.”
Live stream participants receive advanced notification that an event will take place and the CommentSold Broadcast app features it on a retailer’s app and on Facebook. The CommentSold platform will offer product information so that shoppers can learn more without leaving the video.
Live stream attendees can also talk with one another 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 for millennials and Gen Z, Kruse says older shoppers are key participants in live stream shopping events. The largest demographic using CommentSold is 35-to-45 years old, since a lot of the 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 was misread and misunderstood and now we’re trying to double down on that.”
Some customers don’t need quite that level of engagement online, but the convenience of a more personalized shopping experience is what most everyone hopes to get from online shopping.
“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 gathers information about customers through a series of yes and no questions. 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 customize the shopping experience.
The Yes launched in May 2020, a time when shopping for apparel outside of comfortable clothes and workout gear had nearly 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 are spending a lot of money on but people are creating their ‘Yes list,’ for what they’ll buy at some point,” she said.
Users can also share their “Yes list” with friends.
“There’s pent-up demand as people plan to head back out,” said Bornstein.
And when they do go back to stores, shoppers may find that technology is transforming them into a more frictionless and touchless environment, thanks to advanced 5G networks that allow a wide array of machines and people to talk to one another. Automated checkout, intelligent-camera-assisted foot traffic management and product information gleaned without having to pick up an item are just some of the things that 5G makes possible.
“The assumptions we’re making is it will start in stores and operations,” said Jean-Emmanuel Biondi, principal in the retail and wholesale distribution division at Deloitte Consulting LLP.
These networks will have uses in e-commerce once consumers make the upgrade on their devices, but first, they’re helpful to retail and store supply chains in areas like inventory management, according to Deloitte.
“The impact of the 5G revolution is going to be profound,” Biondi said. “It’s going to be across the different channels.”
