2020 was a hard year for the retail industry as across the globe, stores across all sectors had to navigate the challenges of multiple lockdowns with some even having to shut up shop permanently
Those who managed to avoid permanent closure have been faced with redundancies, takeovers and reinvention into digital juggernauts. While the story of this year has been one filled with a lot of lows, there is definitely positives to be taken from what transpired. Adapting and adopting new processes and technologies puts the retail story of the pandemic more in line with the mythological phoenix, rising from the ashes.
China: the best of both worlds
While social commerce is still relatively nascent in the UK, the industry had already had a foothold in China before the pandemic sent traditional retail into a downward spiral. In 2019, social commerce in China was valued at ¥1.675 trillion – that is almost £187 billion. Advanced social retail mediums including platforms like WeChat and Pinduoduo have continued to grow in popularity in recent years, especially under the restrictive period of the pandemic.
A key area driving this growth is live shopping, an updated version of telemarketing for the digital world. This new medium, valued at £45.4 billion in China in 2019, revolves around influencers and celebrities demonstrating and advertising products on live streams, encouraging viewers to buy the same product in real time. By engaging with viewers, answering specific questions live and enticing them with limited time offers, live shopping combines the best of social media and e-commerce in a more immersive experience.
Realtime reviews on livestream
Following years of sustained economic growth and a burgeoning middle class, China is seeing an influx of people consuming new products and looking for the easiest way to do so. In a competitive and often daunting marketplace fraught with misleading or even fraudulent products, consumers rely on reviews to help them understand why they should buy a product over the ten alternatives one click away. Live shopping answers this need by providing the same information as 1,000 reviews from a spokesperson they already know and feel they can trust. Live shoppers get to see the latest products, the excitement of people talking about the product and to engage with others to see what they really think – all from their mobile phone. It’s the opposite of shopping by yourself.
The medium was already growing at an explosive rate in China and to a lesser extent globally before the pandemic shut down shopping centres and high streets. Over the last year, however, it also has filled the new hole left in people’s social lives and habits, as consumers relegated to shopping at home pine for the small interactions that come with shopping in-store. While shoppers in many countries are beginning to tentatively return to stores, this new phenomenon with both the convenience of e-commerce and interactivity of traditional shopping is not likely to disappear any time soon.
A new lease of life: are retail leaders ready?
While live shopping certainly meets all the demands UK shoppers have at the moment, the speed at which it can be rolled out in this relatively new market is somewhat limited. The growth of the medium in China is built on the back of large uptake in well-developed media platforms with the capabilities to host livestreams and the in-built capabilities needed for interacting with viewers and letting them buy within the stream. Unfortunately, most popular social media platforms in the UK can’t compete with the standards of their Chinese counterparts when it comes to livestreaming and interactivity.
The key for the growth of this ecosystem is not just developing a channel that enables live shopping, for which there is ample existing technology, but developing a platform with a large enough user base. An example of this already in action outside of China is Amazon Live – the e-commerce titan’s new branch into the channel. However, most retailers lack the scale and existing customer base to have their own proprietary live shopping stream, and therefore will need to rely on established platforms such as TikTok and Instagram. Time will tell how fast these platforms can adapt and impact on UK retail.
While much of this uncharted territory may seem daunting, the benefits and rewards that retailers will gain outweigh the any challenges. This new lease of life will also benefit consumers with new avenues to purchase and renewed loyalty towards brands.
About the Author
Young Pham is Chief Strategy Officer at CI&T. CI&T is your end-to-end digital transformation partner. As a digital native, we bring a 25-year track record of accelerating business impact through complete and scalable digital solutions. With a global presence of 3,000 professionals in strategy, research, data science, design and engineering, we unlock top-line growth, improve customer experience and drive operational efficiency.