For more than two decades, retailers have been racing to be everywhere. What started with launching a simple website has evolved into sophisticated “channel-less” business strategies, focused on allowing customers to choose in-store, online or mobile shopping with the option of home delivery or curbside pickup for added convenience.
As new generation of consumer emerges, retailers face pressure to continuously evolve to reach people where they are and not the other way around. And they will have to do so while preserving margins. After coming off a holiday that had low promotional activity, margins are healthy. This may change over time given inflation, the rise of labor and transportation costs.
Embracing Emerging Channels
To meet these challenges, successful retailers will be those who embrace a channel-less model — one that connects the dots to optimize operations holistically. This is not a new concept. It means finding new ways for customers to interact with the brand, while breaking down the distinctions between online and offline selling to drive profitable growth.
With social media becoming transactional, a whole new industry has emerged: social commerce, in which the entire shopping experience — from product discovery to the check-out — takes place on a social media platform.
A recent Accenture study found that social commerce has grown to a $492 billion industry. Almost two thirds (64%) of social media users saying that they made a social commerce purchase in the last year. That’s nearly two billion social buyers globally.
The power of social commerce lies in its ability to flip traditional commerce on its head. For the most part, people aren’t on social media to shop. They want to connect, be entertained, and engage in activities they like. Over time, that interaction builds communities — and trust. That creates opportunities for retailers, because consumers today like buying products and services based on recommendations from their “friends.” Sandie Hawkins, TikTok’s GM of North America Solutions, has described social commerce as, “word of mouth on steroids.”
Retailers are already trying to convert word of mouth to sales. For instance, US apparel business, Express, is empowering both influencers and regular shoppers to become “Style Editors” who can set up Express storefronts and be rewarded for attracting new customers and driving sales. Other retailers will quickly follow suit. Over the next three years social commerce is expected to grow three times faster than traditional e-commerce, to about $1.2 trillion by 2025.
Livestreaming — also known as live commerce — is another form of “experiential retail” with the potential to drive consumer engagement and boost sales. For retailers, these streams create opportunities to combine some of the most important aspects of the in-store experience, such as interactive customer service, with the ease, convenience, and pure entertainment factor of online shopping. That’s a potent combination. Consider that in just one day in October 2021, two of China's top live-streamers, Li Jiaqi and Viya, sold $3 billion worth of goods, roughly three times Amazon's average daily sales. Such numbers are enticing for retailers.
While livestreaming will never truly replace the in-person shopping, it is an innovative way for retailers to reach consumers to interact with their brands.
At the same time, livestreaming offers retailers a creative way to engage and empower their people. Consider how employees could showcase their knowledge and expertise on livestreams. By providing a close-up view of products and information about their look and feel, they can offer a more informative and engaging experience for shoppers.
Turning store employees into micro-influencers doesn’t have to be hard. With a light-ring and a phone, store associates can provide their take on products – perhaps answering key questions around sizing or texture that you wouldn’t naturally communicate from a static website. Just think what this may do for impacting returns!
Integrating Online and Offline
Search for new shopping channels won’t be enough. Retailers must also address the potentially bigger challenge of integrating online and offline into a model capable of driving growth.
Online-merge-offline (OMO) models simultaneously make ecommerce and in-store businesses more profitable and efficient. For example, digital tools developed for e-commerce can create better experiences in stores, with the potential of boosting foot traffic, extending the duration of visits, and increasing basket size per order.
Bricks-and-mortar will play an important role in social commerce – having a store presence legitimizes the brand. Half of social media users worry that social commerce purchases will not be protected or refunded properly. A physical presence can offer consumers confidence that their transactions are secure and that they will receive their orders.
Strategies like these have the power to deliver the retailer’s dream: drive growth by keeping pace with evolving consumer behaviors, while preserving profitability. But getting there requires the courage to let go of the boundaries that have defined commerce throughout the 21st century. It’s time to truly go channel-less.