The retail industry is changing rapidly. In 2019, global retail generated $25 trillion in sales — $21T from retail stores and $4T from e-commerce. Retail stores drove the vast majority of revenue, but e-commerce generated all the buzz. This is because most physical stores are not connected to the digital commerce revolution that is happening online. Even before Covid-19, retail foot traffic was decreasing. Traditional tools such as advertising and direct marketing were becoming less effective. And of course, Amazon and new DTC players were quickly verticalizing their stacks to grab market share and dominate the most profitable segments of global retail.
And then Covid-19 came along. The pandemic amplified these systemic problems with dramatic speed and dire consequences. Today, nearly 4 months after most Americans began to take the threat seriously, retailers of all shapes and sizes remain almost completely shut down, with limited ability to sell anything from brick-and-mortar locations. Even as stores begin to reopen around the U.S., curbside retail is a severely restricted approach to shopping. It is likely to take several years and multiple business cycles for things to return to some level of normal.
Ironically, this has created a tremendous and urgent opportunity for Veriskope, in 2020 and beyond. The immediate fire is raging: Live Video Commerce (LVC), powered by our unique technology, has the potential to become a lifeline for retail stores — by fostering a more meaningful connection to digital, e-commerce behaviors. For instance, LVC can bring remote buyers into stores via real-time video — not just to view merchandise, but to connect directly with sales associates. LVC can also enable influencers to more effectively reach followers on social media, opening new channels for merchants and brands to leverage influencers. LVC is also a valuable CRM tool for store employees, enabling them to proactively engage with customers across social media.
Ultimately, LVC can help retailers transform physical stores into smart, hyper-connected showrooms that reinvigorate and reimagine the emotional shopping experience.
Live Video Commerce lies at the very heart of these changes. It’s already taking hold in Asia; in 2019 one retailer reported that $15B in sales were directly attributed to video-related commerce.
Today there are three main types of Live Video Commerce:
- One-To-Many Broadcast
Live Video broadcast linked to a backend commerce engine. This is the most popular model in Asia. One individual, often called a Key Opinion Leader (KOL), will broadcast live to hundreds of online viewers, typically from her kitchen or living room. These broadcasts can last as long as 6-8 hours each day. KOLs earn affiliate fees of 10-30% for selling products.
- One-To-One Video Chat
We are beginning to see the early days of small, medium and large retailers using tools like FaceTime and Zoom to connect remotely between buyers and sellers. Innovation is happening rapidly in this space, but the pieces are still disconnected.
- One-To-Many Video Chat
We are also beginning to see social influencers and retail outlets share shopping experiences live via social media. This is the equivalent of the Watch Party in the gaming world, where the audience will watch players compete in a video game. This is starting to happen for commerce, expressed in any number of formats and “programs”. Will there be a Twitch of shopping? We believe this is inevitable, given the rapid pace of innovation already happening in this space.
As LVC begins to take shape, retailers are seeing increased engagement and conversion rates, increased basket size, higher monthly sales numbers, and lower merchandise returns. Most importantly, they are getting a glimpse of an approach to survive Covid-19 and compete with Amazon, by using emotive live video and human interaction to woo customers back from algorithmic shopping.
Just as MySpace is a marker in time (2005) for the beginning of the social media decade, we believe that Zoom is a marker in time that signals the beginning of the live video decade. If you are interested in learning more about the new Veriskope Live Video Commerce tools that are built on Adobe Media Server, RTMP and WebRTC, or if you have ideas about Live Video Commerce, please reach out to us.
We’d love to chat — via live video of course!