Commercetools Report

SOCIAL, ENHANCED AND EMERGING Insight-driven strategies for leveraging the hottest new retail channels

Introduction

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Social, enhanced and emerging

INTRODUCTION Social commerce, voice commerce, augmented and virtual reality, and more.

Shoppers are already engaging with all of these new retail channels, and metaverse retailing is just about to explode.

But consumers are still working out which of these channels are actually useful and what’s just a gimmick. And as the technologies develop, so do the ways in which shoppers are using them.

For retailers, to succeed will be to understand what shoppers value from each new channel, and how their attitudes and behaviours will evolve as they embrace them.

Reading this report is the first step. We draw on the latest consumer research, and provide insights and recommendations on how to leverage these trends and achieve sustainable competitive advantages.

We encourage you to take advantage of this report and chart your organisation’s future success in social, enhanced and emerging retail channels.

CONTENT

Foreword

3

Key findings

4

Social commerce The opportunity The platforms The challenge

6 8 10

Emerging retails

Enhanced retailing Voice commerce Augmented and virtual retailing The reality The technology The retailers The challenge

12 13 14 15 16 17

Live streaming The metaverse The challenge

19 20 22

Wrap up

23

Insights from Commercetools

24

References

25

Foreword

3

FOREWORD The future of retail begins now. We are at the forefront of innovation with social commerce, enhanced retailing and emerging retailing.

New and emerging technologies are needed to ride on these trends.

This is why retailers must take advantage of agile infrastructure to successfully capitalise on limitless commerce possibilities and create a truly immersive experience.

The modern consumer is bombarded with a plethora of online shopping channels – social commerce, voice commerce and live shopping.

Truly a modern retailer would be able to engage in commerce anywhere and everywhere, with no limitations and boundaries, to engage the modern consumer.

With a headless commerce architecture, the modern retailer is not limited by traffic peaks, so that information can flow seamlessly from one channel to another.

Read on as we dive into how new and emerging retail channels reimagine the digital shopping experience for the customer.

Joshua Emblin Territory Director, APAC Commercetools

Social, enhanced and emerging

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Social, enhanced and emerging

KEY FINDINGS

SOCIAL COMMERCE • • •

Focus on social commerce basket growth, rather than on enticing new shoppers into using it.

YouTube is likely to rapidly develop into an effective sales channel in multiple categories and for a wide range of shopper segments.

Social media influencers on sites like Instagram and TikTok are more effective at building awareness than as sales channel.

ENHANCED RETAILING • • • • •

Voice commerce is growing but is probably best used for subscription-based retailing.

EMERGING RETAIL •

The focus of augmented and virtual retailing should always be on the shopper experience and not on the technology itself.

•

Current predictions of AR/VR uptake may be too conservative and retailers may need to rethink their strategies for these technologies.

•

Leverage existing applications, rather than holding off for the next generation of augmented/virtual retailing technologies.

•

Location and turnover are not barriers to the successful implementation of enhanced retailing.

Shopper engagement in livestreaming will continue to grow, as it addresses many basic consumer needs.

As a sales channel, livestreaming will continue to expand in prevalence, importance, and in the diversity of its applications.

Consumers already view shopping as an important component of their metaverse experience.

Major brands and retailers are making significant investments in metaverse retailing and this makes its broad acceptance even more likely.

5

Social, enhanced and emerging

SOCIAL COMMERCE SOCIAL COMMERCE

Social commerce

Social, enhanced and emerging

6

THE OPPORTUNITY Social commerce currently accounts for around 5% of all online retail spending in Australia.1 This may explain why 90% of all Australian retailers have some form of social media profile. 2 But while 49% use paid social media to advertise their brand,3 only about one in three (35%) enable their customers to buy from them via social media.4 This data alone suggests that every Australian retailer needs to take a good hard look at their potential to increase sales from social commerce.

Peter Cowan, managing director at PayPal Australia, sums up the situation in simple terms, “with almost half of Australian businesses posting on social media daily, it’s a natural evolution that businesses want to offer social audiences easy and immediate paths to purchase for the products and services they are seeing on their feeds.”5

Social commerce shoppers in Australia

Many retailers have probably held off investing in social commerce thinking that it was a high-risk developing market. That is no longer the case.

While the proportion of shoppers using social commerce has largely stabilised to just under one in three,6 average monthly social commerce spending has grown from $5 in 2019 to $35 in 2021.7 These are classic signs of a maturing market.

Another indication of market maturity is that while the monthly spending of Gen Z, who were the early social commerce adopters, has fallen by $6 over the last 12 months to $51/month, Millennials’ average monthly spending on social commerce rose by $15 over the same period and, at $52/month,, now equals that of Gen Z.

30%

31%

32%

32%

3%

3%

2023

2024

Source8

23%

Proportion of internet users % change 18%

6% 9%

2020

2021

2022

Social commerce

7

Social, enhanced and emerging

Social media purchase categories Source9

What many retailers should also find exciting is the breadth of the unmet appetite for social commerce across multiple purchase categories.

Clothing and accessories are the exception, but in every other category the proportion of shoppers who would buy from social media vastly outweighs the proportion who have already bought via this channel.

In summary, around one in three shoppers use social commerce, the average spending of Millennials is increasing, and in multiple categories, shoppers haven’t yet used social commerce but are open to it.

Clothing and Accessories

Health and Beauty

Toys and Games (physical)

Home and Garden

Books and Magazines

Focus on social commerce basket growth, rather than on enticing new shoppers into using it.

Sporting Goods

Electronics and Computing

Digital or Virtual Goods

Grocery

36% 36%

20% 38%

20% 35%

16% 41%

15% 42%

14% 35%

13% 29%

11% 37%

11% 25%

Have bought through social media

Would buy through social media

Social commerce

8

Social, enhanced and emerging

THE PLATFORMS The most popular social media platforms used by retailers are Instagram (75%) and Facebook (74%), and these match with the platforms used by shoppers to interact with retailers,10 with 44% of shoppers interacting with retailers via Facebook and 30% via Instagram.11 Though they are very popular as social interaction platforms, relatively few shoppers use Twitter (9%), Snapchat (8%) or TikTok (7%) to interact with retailers.12 In 2021, the most commonly used platforms for actually purchasing on social media were Facebook (70%) and Instagram (42%). Purchases via Snapchat (12%), TikTok (12%) and Pinterest (11%) are all significantly less common.13 For retailers, the social media channel to watch in 2022 will be YouTube. While 28% of shoppers interact with YouTube, until recently it has not been a straightforward process to purchase directly from YouTube and this is reflected in its minimal social commerce presence.14 However, the recent launch of a live shopping feature on YouTube15 may soon change that, particularly given the rapidly growing general interest in live shopping.

YouTube is likely to rapidly develop into an effective sales channel in multiple categories and for a wide range of shopper segments.

Social commerce

Social, enhanced and emerging

9

Of particular note for retailers targeting the silver market (65 and older), with a penetration of 19%, YouTube is already as popular as Facebook(19%) among this cohort as a means of interacting with retailers. It is also worth noting that in the last 12 months alone this group’s social commerce spending has risen 50%, from $10/month to $15/month.16

However, the data clearly indicates that the main value of influencers is in generating awareness, rather than in generating sales, per se. Furthermore, the impact that influencers have on making sales is much less than that of traditional marketing techniques like retailer emails and loyalty scheme offers.17

At the heart of it, social commerce is still about buying things. The factors that impact social commerce purchases, like ratings and reviews (35%), promotions and discounts (36%) and product pages (35%), impact all retail channels.

As an awareness tool, influencers already have an impact, with 60% of online shoppers saying that they use influencers to help them find a bargain.18 Almost one in four (23%) go further and say that influencers do help them discover new products to buy.19

What is unique to social commerce, however, is the role of social media influencers.

Social media influencers are more effective at building awareness than they are at directly generating sales.

However, at 9%, social media influencers are more than two-thirds less likely to have had an impact on a purchasing decision than traditional channels like retailer emails and loyalty scheme offers, which impact 29% of purchases. 20

The media regularly features high-profile influencers and the brands they support. And there are various case studies describing the success that can be achieved by leveraging influencers.

TRADITIONAL MARKETING

Influenced a purchase in the last 3 months Source21

29%

29%

21%

9%

5%

4%

Email from retailer

Loyalty scheme offer

Social media

Social media influencers

Celebrity influencers

Local influencers

Social commerce

THE CHALLENGE As the number of social channels grows and with brands looking to build a presence on all major platforms, there comes the challenge of ensuring that the customer’s purchase and postsales experiences are consistent across all channels.

This includes ensuring that the customers: • Access the same catalogue and products • Enjoy the same campaigns and promotions • Are able to use their loyalty privileges • Have their purchases captured, fulfilled and serviced seamlessly, regardless of the channels they interacted with.

Hence, having a centralised process and framework to manage the product information, promotion, customer data and loyalty details becomes key to ensuring consistent customer experience, as brands seek to scale across the different channels.

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Social, enhanced and emerging

SOCIAL COMMERCE TAKEAWAYS •

Focus on social commerce basket growth, rather than on enticing new shoppers into using it.

•

YouTube is likely to rapidly develop into an effective sales channel in multiple categories and for a wide range of shopper segments.

•

Social media influencers are more effective at building awareness than at being a sales channel.

•

Going headless enables a centralised framework to manage the product information, promotion, customer data and loyalty details, which becomes key to ensuring consistent customer experience as brands sought to scale across the different channels.

Enhanced retailing

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Social, enhanced and emerging

ENHANCED ENHANCED RETAILING RETAILING

Enhanced retailing

12

VOICE COMMERCE

Reasons for not engaging in voice commerce Source26

Like to see the item

67%

To some, the phrase ‘enhanced retailing’ may call to mind visions of superhero shoppers wearing mechanical exoskeletons. For the immediate future, however, it refers to a range of technologies that enhance the traditional forms of retail experience.

As an enhanced retail channel, voice commerce doesn’t get as much attention as augmented and virtual reality, however, it has an important and growing role in everyday shopping.

At this point in time, voice commerce primarily revolves around the use of in-home smart speakers.

Hadn’t thought of it

60%

About one in four (26%) Australians own a smart speaker.

Engagement with these devices is high, with 67% using them daily, and 88% using them a least once a week. 22 Smart speakers are not often limited to a single room either, with the average home containing 1.7 units and 26% of owners operating three or more. 23

Not interested

57%

Currently, the regular (i.e. weekly) use of smart speakers is primarily to play music (65%), followed by getting a weather report (56%), answering a general question (53%) and checking the time (50%). 24 Despite their wide use, only 33% of smart speaker owners have used one to interact with a brand, product or service online, and even fewer have either purchased a new product (28%) or reordered a product (27%). 25

Not sure of the process

Too worried about ordering the wrong item

Social, enhanced and emerging

51%

A number of factors probably contribute to this limited use as a shopping device.

In the first instance, none of the four most popular occasions for smart-speaker use (doing chores – 67%, cooking – 63%, entertaining – 57% and getting ready for the day – 56%) lend themselves to shopping.

49%

While shoppers’ desire to see the item is the most common barrier to e-commerce, it should not necessarily be a barrier to the use of voice commerce to re-order regular items. While subscription services for mainstream retail items typically hover around 5%, around 20% of shoppers are interested in the concept. 27 Voice commerce could potentially address at least some of this market.

As has been the case with e-commerce, it is likely that over time barriers to voice commerce such as ‘hadn’t thought of it,’ ‘not interested’ and ‘not sure of the process’ will all become less significant.

Fear of ordering the wrong item (which is a barrier for 49% of smart speaker users) may be more difficult to overcome.

Most of the complaints about smart speakers are that they have either given an incorrect answer of played the wrong song (such as playing Stone Temple Pilots instead of the Rolling Stones). Such mistakes can have serious consequences, financial or otherwise.

Unfortunately, having a smart speaker buy the wrong item could be costly. This may mean that voice commerce will always be focused on ‘reordering’ or ‘low consequence’ shopping instead of being used in the same way as a desktop computer or smartphone.

However, given that 23% of Australians already have at least one direct brand subscription, this is still a significant market. 28

Enhanced retailing

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Social, enhanced and emerging

AUGMENTED AND VIRTUAL RETAILING While augmented and virtual reality are both still evolving in technology and application, global retailers and brands are already developing strategies for their use.

more entertaining or faster. They typically don’t care about whether a technology is labelled augmented or virtual reality (VR).

Philip Hambach, the director of global consumer strategy at Adidas, sums up the role of augmented reality (AR) as “augmented reality addresses a couple of needs. The first is instant chat with your friends, kind of fun stuff, and that is short-term content immersion. Two, the interface... comes with emotional engagement and people wanting to physically look, feel, and touch to make up their mind.”29

For this reason, we believe that many of the shopper statistics around augmented reality are probably also relevant to understanding shoppers’ reactions to virtual reality. This will only become more relevant in the future as these technologies converge.

On a more practical level, Robert Triefus, chief marketing officer at Gucci, comments: “The conversion rates that we’ve seen have surprised us. As a result we’re doublingdown on AR experiences to drive e-commerce.”30 It is critical to remember that all shoppers are interested in whether a type of technology can make shopping easier,

The focus of augmented and virtual retailing should always be on the shopper experience and not on the technology itself.

The other aspect to bear in mind is that irrespective of the technology, shoppers engage with a given retailer across multiple channels. And 89% of shoppers feel that having a consistent experience across all channels is important.31 In simple terms, retailers need to ensure that the essence of their brand and its approach to engaging with shoppers doesn’t get warped or diffused in enhanced retail environments.

Enhanced retailing

THE REALITY It might be our long familiarity with NFC payment, or simply watching too many science fiction movies, but three in four (75%) Australian shoppers expect the retailers they use to be constantly investing in technology to deliver them great experiences. Unfortunately, only one in two (46%) feel that their expectations are being met.32 One of the types of technology investment that they expect is in AR which they definitely do not see as the stuff of science fiction.

Right now, 13% of shoppers believe that virtual clothes tryon technology should be widely available, and 32% expect it to be widely available within the next 12 months.33 And a significant proportion (40%) are more likely to consider a retailer if they offer a branded AR experience.34 While some retailers might dismiss AR as a Gen Z toy, interest is actually strongest among Millennials35 (who account for one in three of all retail spend in Australia!).36 These high expectations are despite the fact that only 13% of shoppers have used AR to try on clothes online,38 and some experts predict that by 2025 still only 18% of shoppers will have ever used AR to make an online purchase.39

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Social, enhanced and emerging

Believe augmented reality would influence their purchasing decisions Source 37

Overall 17% 18- to 24-year-olds 14% 25- to 34-year-olds 35% 35- to 44-year-olds 22% 45- to 54-year-olds 9% 55- to 64-year-olds 3% 65 and older 7%

The global AR-in-retail market is forecast to grow at a rate of 47% between 2020 and 2027.40 Based on the level of demand, however, it is highly likely that shoppers will rush to embrace AR, and as more retailers offer it, the current uptake estimates may prove to be too conservative.

Despite clear potential and many applications of these technologies arenot yet widely available, only one in three (33%) Australian retailers say that digital investment in AR, AI and VR is one of their strategic priorities for the next 12 months.41 It may be time for many retailers to rethink their position on AR/VR retailing.

Current predictions of AR/VR uptake may be too conservative and retailers may need to rethink their strategies for these technologies.

Enhanced retailing

Leverage existing applications, rather than holding off for the next generation of augmented/ virtual retailing technologies.

15

Social, enhanced and emerging

THE TECHNOLOGY Almost every day, another major retailer launches a new AR or VR format or application. The frequency of these launches highlights the speed at which the market is evolving.

The good news is that most shoppers already love their current AR/VR experiences.

Among the 13% of Australian shoppers who have already used AR/VR when shopping online, more than three in four (77%) were satisfied with the experience.42 About one in four (24%) went so far as to say that virtual try-ons are as good as doing it in real life.43 More importantly, most shoppers (73%) who had used AR online felt that they were more likely to purchase the products they had tried on.44 Another important reason for online apparel retailers, in particular, to embrace AR/VR is that it has the potential to reduce returns by 31%.45 To date, the use of AR and VR have been most prominent in apparel and fashion, however, shoppers are keen to explore it for consumer technology and home appliances (34%) and furniture (30%).46

Enhanced retailing

16

Social, enhanced and emerging

THE RETAILERS As far back as 2014, the likes of Adidas, John Lewis, Sephora, Uniqlo and Tesco were experimenting with magic mirrors (in-store screens that enable shoppers to virtually try on different clothes).47

A limitation of the original app, however, was that it didn’t have e-commerce functionally, which introduced the potential sales barrier of users having to find and buy the product either online or in-store.48

However, the failure to enact the widespread adoption of this technology most likely highlights a lack of ROI.

The current version of the app enables users to explore the range, check product information, read ratings and reviews, and add items to their wish list, favourites list or cart.

Logged-in users can access carts created on other devices and purchase directly within the app.49

By contrast, AR smartphone apps enable shoppers to virtually place potential purchases in their own homes.

In 2017, IKEA took the lead in AR retailing with the launch of the IKEA Place app. Not only was it a very successful engagement tool, as users could visualise IKEA items in their own spaces, but also images of Billy Bookcases in subway stations and other irreverent combinations became internet fodder.

A measure of its appeal is that the app has been downloaded over 31 million times and has an average rating of 4.6 stars.50 Australian retailers Big W and Kmart Australia have headed down similar paths.

Big W launched its 2021 midyear Toy Mania sale with an AR tool that allowed shoppers to visualise items in their own homes, saying that it ‘…takes the stress out of buying big bulky items and makes it seriously easy for consumers to make their purchasing decisions,’ according to Doug Sexton, campaigns marketing manager at Big W.51 Kmart also offers a smartphone AR tool with a similar goal of supporting in situ visualisation of selected furniture, bedding, rugs, nursery products, and outdoor and fitness equipment ranges.52 Australian eyewear retailer Bailey Nelson, offers yet another example of what can be achieved via AR. The retailer says the launch of its Virtual Try On function increased online sales conversions by 400%.53 Not surprisingly, a 68% growth in use was associated with COVID-19 lockdowns in 2021.54

Location and turnover are not barriers to the successful implementation of enhanced retailing.

Enhanced retailing

THE CHALLENGE Enhanced retailing (such as voice and AR/VR) are extremely powerful tools for brands and retailers to use to create emotional engagement and enhance their customer experience.

However, most retailers are bound by the limitations of their legacy systems and find it difficult or even impossible to start expanding into these mediums.

To leverage the new forms of digital mediums and the technologies available, going ‘headless’ becomes important. Headless is a separation of the frontend user experience and the backend application. This allows retailers to have full creativity on the interface the user is interacting with (which could be a web store, a virtual showroom, a chatbot or even an in-store mirror).

Going headless enables brands to have full control, to deliver truly personalised experiences that are completely immersed in real-life environments.

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Social, enhanced and emerging

ENHANCED RETAILING TAKEAWAYS •

Voice commerce is growing but is probably best used for subscription-based retailing.

•

The focus of augmented and virtual retailing should always be on the shopper experience and not on the technology itself.

•

Current predictions of AR/VR uptake may be too conservative and retailers may need to rethink their strategies for these technologies.

•

Leverage existing applications, rather than holding off for the next generation of augmented/virtual retailing technologies.

•

Going headless enables brands to have full control, to deliver truly personalised experiences that are completely immersed in real-life environments.

Emerging retail

KEY FINDINGS

EMERGING RETAILEMERGING RETAIL

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Social, enhanced and emerging

Emerging retail

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Social, enhanced and emerging

LIVESTREAMING In modern retail, product demonstrations are typically a distinct stage on the path to purchase. For example, a shopper may ask a sales assistant to demonstrate a product, or they may click on a video to see a demonstration of the product. In most cases, the product demonstration element will follow some initial research, and will itself be followed by evaluation and selection prior to a final purchase being made.

In livestreaming, however, a host, potentially an influencer or celebrity, conducts what is, in effect, an extended demonstration discussing the product in an engaging and entertaining way.

In this respect it is similar to ‘home shopping’ television programmes.

A fundamental difference, however, is that during livestreaming events, shoppers have multiple ways in which to directly participate, including using a chat function to ask questions, responding to polls, reading and writing reviews, adding ‘likes’, and chatting with other viewers.

A by-product of this high level of engagement is that livestreaming can build very strong emotional branding for the retailer.

Livestreaming is already well established in Australia, with 20% having participated at least once.55 An IPSOS study conducted in July 2021 determined that 58% of Australian retailers were using virtual shopping events.56 There is no doubt that Australian retailers have to accept livestreaming as part of the retail landscape.

Some experts believe that livestreaming will ultimately become extremely popular57 because: • Video is already an incredibly important medium in shopping, particularly for reviews • Shoppers like the interactivity and personal engagement (a hallmark of physical retail and a weakness of online retail) • Many shoppers find the information they gain from a livestreaming session, such as useful tips and personal experiences, more useful and compelling than that supplied on a retailer’s website.

As with many other aspects of retailing, livestreaming’s use by retailers has been accelerated by the limitations COVID-19 has placed on physical shopping, and shoppers’ engagement with it has increased as they have had more time on their hands.

For outdoor retailer Kathmandu, livestreaming helps customers and educates them on what is important to the company, its mission and values. Their current livestream series runs on Instagram and features leading environmentalists.58 Personal skincare and wellbeing brand Lovekins used livestreaming for several years prior to the pandemic.59 Amanda Essery, founder and CEO of Lovekins, is clear on the value provided by livestreaming. She says, “It’s a great way to connect directly with consumers and talk more about certain aspects of the brand’s story and, importantly, it allows customers to ask questions and receive answers in real-time. Lovekins is an all-natural brand, so this is particularly useful when providing information about our Australian plant-based ingredients.”60

As a sales channel, livestreaming will continue to expand in prevalence, importance and the diversity of its applications.

Emerging retail

THE METAVERSE Recently, Facebook Inc. (which owns Facebook) changed its name to Meta.

Suddenly, the metaverse, a virtual reality where avatars can ‘live’ (which includes shopping for virtual clothes and other items), became more real.

For retailers, it also meant that the metaverse moved from something to read about and ponder, to a retail channel that has to be taken into consideration in any strategic planning exercises.

Whilst the term metaverse implies a single platform, current indications are that there will be any number of virtual environments and/or stores at which shoppers can make purchases.

Some brands have already experimented in selling virtual goods within popular gaming platforms like Fortnite.

Retailers and brands will also likely operate their own metaverse environments, which may include their own NFT-based currency for the purchase of virtual goods.

The financial potential for brands and retailers in the metaverse was reinforced by a recent statement from respected global investment bank Morgan Stanley.

In November 2021, Morgan Stanley noted that “Revenue streams from digital mediums for luxury brands are negligible… We think this is about to change. The Metaverse will likely take many years to develop. However, NFTs and social gaming (e.g., online games and concerts attended by people’s avatars) present two nearer-term opportunities for luxury brands.”61

20

Social, enhanced and emerging

Consumers already view shopping as an important component of their metaverse experience.

Emerging retail

21

There are numerous other indications that the metaverse is just around the corner and that major brands are preparing for it.

Gucci has already made significant forays into the metaverse, and it offers an interesting perspective on what drives consumers to shop in virtual worlds.

In October 2021, Nike filed a range of trademark applications that they described as “intended to cover the categories of downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys, and accessories for use online and in online virtual worlds.”62

“There are more and more second worlds where you can express yourself [but] there is probably an underestimation of the value being attached to individuals who want to express themselves in a virtual world with a virtual product, [through] a virtual persona,” Gucci chief marketing officer Robert Triefus said.64

In a similar move, Walmart which is the world’s biggest retailer, filed trademark applications in late 2021 outlining how it has extensive plans to sell virtual merchandise. Whilst to date, much of the media attention on metaverse retailing has focused on fashion and apparel, Walmart has indicated that it will offer electronics, appliances, apparel, home goods, toys, and personal care products.63

Beyond the metaverse’s role as a ‘second life’, it is likely that a range of retail business models will develop out of it.

Just as many pureplay retailers have opened up physical stores, with Amazon Style a recent high-profile example, the metaverse may spawn a range of new brands in the physical world.

Major brands and retailers are making significant investments in metaverse retailing and this makes its broad acceptance even more likely.

Social, enhanced and emerging

Digital start up, Aglet, has built its success as an app that enables users to collect and wear virtual versions of rare or limited-edition sneakers. Aglet CEO Ryan Mullins says,, “I think where we’re going as a world [is] where Nike and Adidas will release products in the real world, and then they’ll throw these into a game (metaverse). And I think the inverse of that is true in the future. There will be people designing their own brands in these game worlds, and then they’ll be made in reality.”65 The commitment of these leading organisations will deepen consumer interest in the metaverse and almost certainly support their trial and uptake of it.

Emerging retail

THE CHALLENGE Livestream retail is quickly evolving into a large part of the commerce sector. This creates an entirely new way for retailers to engage with their customers (with examples mentioned, such as running live product demonstrations and holding live campaigns and promotions to entice customers to buy). Boosting customer engagement is key to success for livestream retail but retailers often find it difficult to handle the scale that comes with the increased engagement. The livestream is only as scalable as the platform that is supporting it and you will need to invest in a scalable platform to combat those challenges.

Metaverses are deemed as the next big thing of the internet evolution and crypto/virtual currencies and assets are a key element of them. Unlike a traditional commerce setup where physical products are sold and cards/ cash payments collected, retailers would have to start innovating in the space of providing digital products and flexible options for payments to tap into the opportunities in this space.

To future-proof the business, the flexibility to investigate and experiment with speed to respond quickly to the changing needs of the market becomes another crucial aspect.

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Social, enhanced and emerging

EMERGING RETAIL TAKEAWAYS •

Shopper engagement in livestreaming will continue to grow, as it addresses many basic consumer needs.

•

As a sales channel, livestreaming will continue to expand in prevalence, importance, and the diversity of its applications.

•

Consumers already view shopping as an important component of their metaverse experience.

•

Major brands and retailers are making significant investments in metaverse retailing and this makes its broad acceptance even more likely.

23

Social, enhanced and emerging

WRAP UP

SOCIAL COMMERCE • • •

Focus on social commerce basket growth, rather than on enticing new shoppers into using it.

YouTube is likely to rapidly develop into an effective sales channel in multiple categories and for a wide range of shopper segments.

Social media influencers on sites like Instagram and TikTok are more effective at building awareness than as a sales channel.

ENHANCED RETAILING • • • • •

Voice commerce is growing but is probably best utilised for subscription-based retailing.

EMERGING RETAIL •

The focus of augmented and virtual retailing should always be on the shopper experience and not on the technology itself.

•

Current predictions of AR/VR uptake may be too conservative and retailers may need to rethink their strategies for these technologies.

•

Leverage existing applications, rather than hold off for the next generation of augmented/virtual retailing technologies.

•

Location and turnover are not barriers to the successful implementation of enhanced retailing.

Shopper engagement in livestreaming will continue to grow, as it addresses many basic consumer needs.

As a sales channel, livestreaming will continue to expand in prevalence, importance, and the diversity of its applications.

Consumers already view shopping as an important component of their metaverse experience.

Major brands and retailers are making significant investments in metaverse retailing and this makes its broad acceptance even more likely.

Insights

24

Social, enhanced and emerging

INSIGHTS FROM COMMERCETOOLS Why Retailers Should Adopt MACHPowered Modern Commerce Technology.

The future of retail is commerce anywhere and everywhere.

There is strong shopper demand for having a connected shopping experience. The meteoric rise in the popularity of livestreaming is proof. In livestreaming, the focus is on the interaction between the shopper and the influencer. Bringing augmented reality (AR) into the equation immerses shoppers in futuristic virtual shopping environments that will make their jaws drop.

To bring such interactions (and new revenue streams) that use enhanced and emerging technology – like social and voice commerce, and AR – to life, an agile and flexible commerce infrastructure is crucial. Many retailers struggle with their legacy platforms due to the lack of scalability, which causes website downtime and sluggish performance speeds. This is catastrophic when introducing new shopping channels.

Companies stuck on legacy platforms lose customers to more tech-savvy competitors.

This is where having a modern commerce architecture with MACH (Microservices-based, API-first, Cloud-Native, Headless) comes in. A MACH-based commerce platform can leverage the same backend with different UIs, since it’s decoupled from the frontend, so any new shopping channels can easily be added. Plus, the unlimited API capabilities mean that such a platform can withstand sales peaks that stream in from these new shopping channels, leading to increased order sizes and revenue. And with the absolute flexibility to experiment and innovate, imagine the endless commerce possibilities you can offer to your customers.

The future of retail rewards speed and innovation. Are you ready to embrace it?

References

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Social, enhanced and emerging

REFERENCES 1.

https://www.paypal.com/au/business/enterprise/ecommerceindex2021

21.

2.

https://www.businessinsider.com.au/social-commerce-up-40young-australians-still-prefer-websites

22. https://www.cmo.com.au/article/689749/report-smart-speaker-voice-assistant-proliferation-use-revealed/

3.

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26

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