Why E-commerce should be Video-commerce (not only) during COVID-19 crisis
According to a McKinsey report published in March 2020 “75 percent of publicly listed apparel and fashion companies in North America could find themselves with negative EBITDA or untenable net debt-to-EBITDA ratios after three-month store closures. Depending on their cash positions, these companies will be in deep financial distress unless they take urgent action.” And the same analysis applies not only on fashion retailers. Food industry was one of the first to suffer from the effects of quarantine and the same goes for many independent retailers: “Offline retail had already seen massive declines in sales and traffic at the start of the crisis — and now both have gone to zero.” Based on the various predictions the optimistic scenario plays for the return of the customer in Q3 2020.
My favourite Twitter meme asks who is behind the digital transformation of your company: CTO or CO-VID19? And the answer is clear. For many companies, the current situation pushed them not only to shut their doors for the consumer and worker safety or in compliance with government orders, but also shift their strategic approach to digital.
Easy thing, one might say. From physical retail to online, from billboards to Facebook Ads. And WFH, of course. But looking at digital transformations and strategies, one observes a pattern for those, which were successful. Mindset is the key: not only replacing A for B, but restructuring and rewriting A into C and D.
But Human-centered mindset is essential when it comes to transformation. The interaction between a billboard and a Facebook ad might be very different, even though they fall in the same marketing category. And the same goes for e-commerce and physical commerce. They are interchangeable from the functional perspective, but most of the times, they are not interchangeable from the user’s perspective. The interaction is not the same.
Based on the data, customers who shop online lack “realness” compared to a store. The possibility to talk to the shop assistant, or touch the goods. Therefore, according to Business of Fashion “digital consulting will win sales. You need to be having web conferences, video-chatting to keep up with clients. It’s the method of high-end retail sales associates, turned over to technology.”
Keeping human interaction is the key to winning in a post-covid world. Not replacing them an e-shop running on Shopify, but transforming a human connection into digital world. Keeping the debates with sales associates, face to face interactions and the opportunity to explore the product.
We need to replace e-commerce with video-commerce. Designer jewellery, expensive wines or wedding dresses cannot be sold any more in the same way we sell toilet paper rolls. They need a story. Human experience which can only be translated face to face.
So many shops, have already included video or chatbots in their experience. Nike.com product videos or Everlane chatbot are two of the most cited examples, but they still lack the immediacy of a human reaction. With chatbot you get the immediacy, but not a human interaction. With video you get get the feeling, but not the conversation.
We’ve seen rise of videocommerce with livestream shopping in Asia and they are a proof it can work as successfuly as any other sales channel. During Paris Fashion Week livestreams, 95 % of customers have ordered and the brands have managed to match 80 % of face to face revenue, according to BoF.
Therefore I believe platforms like Call To Shop are the future of e-commerce. It offers both the immediacy and a human reaction by employing real sales people to operate an app. Allowing them to share and interact face to face with a customer. Easy to launch, it allows the retailer to have an app in the App Store within a few days and start making money.
More than ever, the brands now need to get closer to the customer. Not only in proximity, but also in understanding his needs. Otherwise they cannot survive.