Retail, Experiences & Social Selling

Live Shopping‘ continues to rise up the ranks of retail ‘experiences’ being offered by brands, yet “live” still means going to the physical store for the majority of people.

In fact, one of the main reasons consumers are hesitant about Live Commerce is because they prefer the experience of in-person shopping. In many ways this makes sense, as the value of the ‘human touch’ remains paramount to the value proposition of retail.

Yet, the retail business model continues to face pressure from various angles, while major eCommerce platforms are engaging in a race-to-the-bottom price war, further compressing margins for a lot of retail goods.

How can retail brands of the future adapt their model to create memorable experiences for consumers and make more money in the process?

Retail, Experiences & Social Selling

The ‘Experiential’ Retail Business Model

In 2020 and 2021, several DTC (Direct-to-Consumer) eCommerce players expanded their business from online to offline, entering the physical retail space.

A few years later, a lot of those same high flyers are now facing bankruptcy proceedings. The retail transition by ‘digitally native’ brands into the physical world has proven more difficult than expected.

Why?

The core reasons revolve around inflation effecting consumer’s spending habits, while simultaneously contributing to a rising cost base in the retail model. With thinning margins and the continuous fixed cost of leasing space, it is a difficult model to sustain unless customers can continuously be acquired in a cost efficient manner.

This has been difficult, especially in an era where ‘cutting costs’ remains top of mind and the average consumer remains budget conscious. As mentioned in an exploration of the luxury industry, only a small subset of “prime” customers (5%) drive 40% of sales. The competition for those top customers is as fierce as ever.

Quantifying The Human Touch

Yet many consumers still love the ‘human touch.’ The phrase “retail therapy” remains relevant for many of those who love window shopping, browsing, and ultimately purchasing various categories of goods.

While many traditional models of retail, such as the mega malls and department stores, have been under pressure for the last several years, new ‘pop up shops’ and other types of retail are emerging.

Even as demographics change and more of commerce shifts online, consumers always seem responsive to high-touch shopping channels. A 2020 retail study showed about 41% of US consumers viewed the human touch as ‘paramount’ to the retail experience.

The pandemic years and the dawn of AI technologies creates counter trends for those who want some level of human interaction or engagement when and where they purchase. Yet even where the human touch is maximized, technology plays an increasing role in making it more seamless and efficient for the customer.

The Rise of Omnichannel Retailing

Many retailers who have typically thrived in the physical arena have themselves expanded their footprint into eCommerce and are now manifesting the ‘phygital’ (physical-digital) business model.

Shopify rolled out several new products (including Point-of-Sale technology) for retailers to connect to their core eCommerce platform in 2023, and offered these three “trends’ around retail foot traffic in 2024:

  • Omnichannel – the word that encapsulates an optimized model between online eCommerce sales and offline brick-and-mortar sales. One example is Buy Online, Pickup in Store as a way to maximize both convenience and experience from the brand’s perspective
  • Personalization – while eCommerce is very much a ‘global’ phenomena, bricks-and-mortar is a local phenomena. Thus, a deep understanding of local trends and preferences can manifest in curated experiences for locals that will keep them coming back again and again. Personalization is the best way to build loyalty, and loyalty is the best way to boost the retail business model
  • Experiences – the whole concept of the ‘retail storefront’ is being reimagined in many different ways due to the various ‘immersive’ technologies arriving on the market. Yet for some retailers, they opt for the low-tech, high-touch experience as a way to create an experiential model that keeps customers coming back

The combination of online customer acquisition and offline foot traffic may be important differentiators going forward, as the saturation of eCommerce players has driven up CAC costs, which is one of the leading reasons why bankruptcies continue across multiple retail and eCommerce categories. Farfetch’s near collapse being but one example.

All in all, customers tend to find their way towards pleasant and uplifting places with high-quality products/services and knowledgeable staff.

What is Video Commerce’s Role in Retail?

And that’s where the concept of Video Commerce is starting to come ‘online’ and contribute to the reshaping of the retail business model.

Companies like Bambuser (Scandinavian brand with a global presence) have emerged after over a decade of experience in ‘video’ to help retailers reshape their models without losing the human touch or the brand ethos.

The company has several case studies on their website, which while naturally biased, shed some light on how video can be used to boost a business built around retail.

Matas.dk is a large Danish beauty retailer and a company known for its expertise in the local market, counting more than 75% of Danish women between 18 – 60 as members.

They run weekly, pre-recorded Live Shopping streams with a mix of prominent Influencers (with expertise in beauty) and local celebrities to create a memorable ‘Live’ experience.

Naturally, this business line emerged out of the pandemic, yet it is now a thriving part of the business with its own independent team:

Matas LIVE was created as an independent arm of the business with dedicated editorial, marketing and production teams. These teams write the show manuscripts, secure special promotions, coordinate with guests and utilize their social channels to promote Matas LIVE and ensure it broadcasts twice a week, without fail.

Bambuser – Matas Case Study

The idea for Matas specifically is to mimic the physical conversation that customers would have in store. It is not to replace the retail experience, but rather enhance it in ways that appeal to consumers across generations.

These types of “Lives” are not TikTok. They run off the brands own website and convey a sense of human connection between the Host and the audience, which from all available research is the key dynamic a brand needs to maximize engagement and conversion.

Shoppable Video

The role of these types of “Live” events is to bolster a brand’s online presence without sacrificing the entire ethos. For a lot of high-touch retailers, this can be a challenge because the digital and physical worlds have vastly different characteristics.

Nevertheless, going live is not easy. It is resource intensive and can be expensive (or not), depending on the setup and expected outcomes.

What consumers generally want in Live Shopping experiences are the same things they want for in-store Retail experiences, with some slight twists:

  • knowledgeable Hosts (employees, Influencers, etc.) who can deliver educational content about certain products
  • discounts and other purchasing incentives
  • being part of product launches and the ‘brand community’ as a whole

Therefore once a Live event is done, that content is extremely rich and valuable for repurposing into ‘Shoppable Video’ across other parts of the web platform. Solutions like Bambuser (and a slew of others) enable this specifically.

Conceptually, it’s simple, such as pictured above. You see a product in a video livestream and are able to purchase it efficiently through the same brand’s eCommerce platform.

Technically, it is complex.

But if we think about video clips where product experts or micro-influencers are able to:

  • build a connection with the audience
  • convey key information about the product(s)
  • and build energy around the brand

These are the same key capabilities that high-end retailers are able to achieve in store. Thus Shoppable Video is one more tool to help high-touch retailers expand their model without losing the essence of their brand.

Social Selling: One-to-One & One-to-Few

That leads us to the final piece around Video Commerce, which is ‘social selling.’ This term is commonly linked to companies like Avon, who built an entire empire around a salesforce of local women for distribution of their beauty products back in the 60s, 70s, 80s, and beyond.

Social selling has many different manifestations now that the world of commerce has gone digital, but most are low-touch derivatives that have failed to really take off. An example would be tapping into networks on LinkedIn to boost sales. This can certainly work in B2B, but is less effective in B2C.

Video Commerce offers retailers a high-touch model of social selling, one that until now has proven difficult for even the world’s top luxury brands to execute on.

Simply put, not every consumer wants to jump on a ‘One-to-Many’ livestream like a Home Shopping Network (HSN) type of event where tens, hundreds, or even thousands of people attend.

In Coresight Research/Bambuser’s survey, 31% of respondents said they preferred a one-to-few livestream format, just surpassing the 30% that favored one-to-many. One-to-one garnered 15% of the responses.

Fit Small Business

Video Commerce can be used to create more intimate and curated experiences for customers in online channels. It can even help drive new customers into the store for items that would not be typically purchased online due to price or specific needs.

This is the antithesis of the ‘AI Chat Bot’ type customer service, and ultimately requires investment, training, and experimentation to make it work.

Yet past models like Avon have shown us how emergent brands who craft out unique value propositions in important markets like beauty, can use social selling to grow exponentially without investing millions into marketing.

A revamped Retail Business model?

As much as experiential, high-touch retail models are in demand, margin pressure is being felt by all major brands right up to luxury.

Thus, the devil is always in the details and Video Commerce is meant to be a driver of scale for retailers, not a cost sink.

It can help open new customer acquisition channels in the case of Live Shopping, convert more customers in Shoppable Video, and retain customers using ‘One-to-Few’ type Social Selling formats.

But looking at a variety of case studies from Bambuser and other similar platform solutions has shown that each type of retail brand will have a slightly different use case for Video Commerce.

It isn’t typically an out-of-the-box solution and it requires a realistic timeframe before returns are generated. There is also risks that certain initiatives can backfire, like with any investment into technologies.

Yet with all of the opening context about the core retail business model being under pressure and customers increasingly looking for ‘experiences’ when in-store, Video Commerce ticks all the boxes:

  • innovative, high-touch approach to customer acquisition and retention
  • creative, human-powered way to scale-up new customer channels
  • opens doors to rapid expansion within certain categories

If the solution can be brought together to increase Conversion and Engagement, lower CAC costs and Returns, and separate the brand from the pack, then Video Commerce might just be the catalyst for a revamped retail business model.

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