Retailers Want to Reopen But Shoppers Want Safety – China Inspires Digital Solutions
Quarantine culture has accelerated consumer adoption of digital in profound ways – creating growth opportunities for nimble brands. With only 34% of U.S. consumers saying they feel safe enough to shop in stores right now, it's clear that brands need to find novel solutions as lockdowns lift. Two emerging trends reveal a path forward: The Acceleration of Acceleration and China's Digital Leadership. These forces combine to make digital the default that inspires consumers to browse and buy in new, safer ways.
Acceleration of Acceleration
Digital usage and engagement rates across every generation have never been higher as a result of COVID-19. Brands that embrace digital now and invest in a frictionless future will lead the new normal. Although social media engagement rates hit unprecedented lows in 2019, the pandemic flipped the script with rates rising over 60% since January 2020.
Social media usage has spiked: Facebook (+27%), Instagram Live (+70%), Youtube (+75%), and TikTok (+66%.) Ecommerce has surged 85% since late February predictably led by Home Goods (+97%), Groceries (+70%) and Health & Beauty (+48%). Digital usage overall is also higher with web browsing up 70%, gaming up 75%, and videoconferencing almost doubling. Even seniors tried shopping online for the first time during the crisis and given its conveniences, most will likely continue.
Livestream Shopping Comes Into Focus
Already a digital innovator, China is leveraging its lead to jumpstart ecommerce and connect with consumers in compelling ways that US brands can adopt. Chinese luxury brands know consumers yearn for two things, entertainment and community – livestream shopping delivers both. Alibaba’s Taobao Live livestreaming platform surged 719% from January to February as brands like Prada, MiuMiu, and Louis Vuitton took commerce to the camera.
Chinese e-tail giant JD.com created a weekly live-streamed club experience, from 8-11pm on JD Live – a live-streaming platform separate to its e-commerce site. According to the Stylus report, Leveraging Live Stream Ecommerce, "Bands and DJs play three-hour sets, serviced by global drinks brands like Budweiser, Rémy Martin, Carlsberg and Pernod Ricard; customers order during the experience, with drinks arriving on a same or next-day basis. According to JD, sales are consistently two or three times higher than days without live streaming."
A Worry Free Narrative Inspires Innovation
Being the first country to experience the crisis, China was also the first to witness consumer concerns around shopping post quarantine. According to Jing Daily, "Through unmanned delivery, enhanced online services, and friendlier offline touch points, “worry-free” has become the dominant narrative to come out of this crisis." Consumer adoption of virtual reality based shopping is also on the rise as a safe way to deliver immersive, engaging digital experiences at a distance. The MixC Shanghai mall launched a VR channel that gave consumers a way to browse brands like Nike, Puma, Fila, Lancôme, Cle de Peau Beaute, and Sephora.
Similar safety concerns exist here in the US across categories. According to a WWD/Harris Poll, 85% of consumers plan to keep working out at home post-quarantine instead of going back to the gym, 67% prefer virtual happy hours over the real thing and 65% will continue ordering delivery instead of dining in public. Now is the time for brands to plan their "safe shopping" initiatives as consumer safety concerns are likely to be with us for the foreseeable future.
Employees Drive Ecommerce as WeChat Goes Virtual
Forward thinking Chinese brands are finding ways to generate revenue through reinventing the role of their in-store staff. Forced to close their 337 stores, Chinese beauty brand Forest Cabin trained 1,600 store employees to host live sessions growing e-commerce from 25% of revenue to 90%. Employees embraced their new roles resulting in 3,000 new loyalty members a day, more than twice its average. According to Alibaba, Founder Sun Laichun joined in and sold nearly $60,000 worth of product in a single session.
A new phenomenon called "private traffic" is on the rise in China and describes ways that brands can closely engage customers in a private setting through apps like WeChat. While group moderators are typically employees that forward promotions, product advice, and even interactive mini-games to keep customers engaged, beauty brand Perfect Diary took a different tack. They created virtual influencers to moderate their WeChat groups which typically interact with 60-70,000 viewers per stream. Despite not being human, Chinese consumers prefer the immediacy and entertaining personalities the virtual hosts provide.
Key Takeaways
Digital usage was already accelerating, the coronavirus pandemic just sped things up. Brands that stay connected to consumers across channels and find new ways to add value through digital will win.
Look to China for inspiration around emerging digital consumer behaviors. New channels like livestream shopping combine commerce and community to deliver a humanized experience that generates revenue.
Develop innovative, digital-first solutions that address consumer concerns around in-store shopping. Doing so communicates you care for their safety and helps them easily navigate a contact-free path to purchase.
Leverage unused retail space for live shopping broadcasts and invite employees to step in front of the camera. Explore new ways to deepen customer engagement through group chats and private messaging apps.
This article originally appeared in the May 6th, 2020 issue of Moving Image & Content’s agency newsletter. Register here to subscribe.