Virus outbreaks and the demise of shopping
How ecommerce will help offset the impact of coronavirus and death of the high street
Over the past two months, the coronavirus outbreak has reached unprecedented heights worldwide, with many countries bracing for the worst amid fears that it has yet to reach its apex. As a result, there has been sweeping cancellation of many worldwide events, from concerts and movie premiers to the 2020 Summer Olympics and Wimbledon. These extreme yet necessary actions have severely impacted the free movement of worldwide travelers who were set to attend these global events, and their lasting effects are sure to accelerate a global change in consumer behavior.
Businesses that were increasingly dependent on the spending power of shoppers have had to reconsider their tactics. With strict quarantine measures in place, many stores have been forced to shut down, such as luxury fashion brand Burberry which lost up to 75 percent of its traffic and sales.
On the other hand, some stores such as cosmetics giant L’Oreal, have also seen a temporary hit to their store-based business as a result of the Covid-19 virus. In the case of L’Oreal’s beauty business, however, ecommerce sales have increased by a record 55 percent, and this fueled their best performance in more than a decade.
While these outcomes are extreme examples caused by a specific global situation, they nevertheless illustrate a retail trend that has been growing in the UK and US for some time; a switch from brick and mortar stores to ecommerce and online shopping. Footfall to British shopping centers and high street stores has declined by 20 percent within a decade, with customers opting to shop online from their own home rather than travel to a store. There has been much debate on how to generate more experiences and capitalize on growth in the form of activities such as eating out and the prevalent coffee culture within physical retail. There is also a great deal of focus on ecommerce UX conversion; that is, reducing the number of clicks throughout the purchasing process, creating seamless cross-device adding to baskets, delivery improvements, and more. However, there seems to be very little motivation to bring the leisurely pleasure of in-store browsing to the ecommerce experience.
Shoppers still love to shop; they enjoy the tangible experience of it, and the digital shelf can stand to learn from current global trends in this area. Threedium, the leader in lightweight 3D imagery, reports an explosion of interest from brands grappling with how to engage stay-at-home high-value shoppers. Bvlgari, makers of LVMH luxury goods, for instance, is leaning heavily on ecommerce in China to fight the sales impact created by the coronavirus. Brands like Bvlgari can now provide existing CAD files of their new DTC jewelry lines to Threedium, who could then create and host stunning 3D visuals and text that the brand could then utilize globally.
Since product images and photos have been proven to be the most influential driver of shoppers’ online purchasing decisions, introducing 3D could transform the entire process. Lode Groosman, co-founder and CCO of Threedium has noted: “we have seen engagement levels increase by an average of 300 percent across all our clients, with product dwell time doubling, and an improvement in conversion rates of up to 30 percent.”
Furthermore, according to recent reporting by Alibaba, demand for goods is still going strong, though logistical upheavals have created challenges with delivery and return methods. This has led to special programs to support merchants, such as lower fees from such ecommerce giants as Alibaba, and subsidies for delivery personnel. One way to overcome the challenges of frequent returns is through the use of 3D displays. These create a photorealistic product experience that mimics the in-store experience, giving the user fully autonomy when browsing an online product and its features. 3D helps minimize product returns, as customers are less likely to receive something an item they were not quite expecting. Customizable footwear brand Undandy uses a 3D configurator which allows users to design and configure their own shoe in a variety of colors and materials and order them online, and they have seen a drop in their annual product returns. Their digital shelf loads instantly with no restrictions on stock alternatives, enabling the shopper to make the right choice the first time. This is a strong indication that 3D/AR technology could help reduce the need for constant shipping and logistics, and even contribute to the reduction of fuel usage and shipping emissions.
And it’s not just luxury verticals that will see a benefit from this technology. 3D has entered the grocery store market, with UK-supermarket Sainsbury’s trialing baby and skincare products in its online store, Sainsburys.co.uk:
Threedium recently won Diageo’s Pitch//It challenge at Mad//Fest in London, a competition that sought out companies that would improve the engagement and experience of its brands. This, along with the company’s first-of-its-kind partnership with Threedium, has set the wheels in motion for 3D in the FMCG industry to spread even more rapidly.
One may wonder why consumers would want to interact with 3D in lower involvement categories. However, it has been proven that hotspots of content create a rich mini-site, and brands find that 80 percent of consumers exposed to this content spend more time interacting and reading. Top brand keywords – such as ingredients, proof testing, sustainability, history, reviews – become important in helping the shopper along the path to purchase.
Beyond 3D, both Android and Apple’s OS upgraded last year to enable AR interaction on mobile devices, and this has been a game-changer for the way in which classic brands think about 3D. Apple's own launch kit video demonstrates a customer placing a 3D IKEA sofa in their sitting room and it is this capability that is attracting investors in tech, with Unity Technologies driving AR/ VR in gaming and ad solutions, expected to shortly IPO for $6 billion.
In the past, 3D was slow, expensive, and complex. However, thanks to significant recent developments in 3D technology and smartphone capability, it's fueling a fundamental shift in global shopper behavior. Wherever they are in the world and whatever retail challenges that consumers are facing - the world is 3D and the internet is finally catching up. The line between the virtual and the real is merging. As Otto (the number 1 home & living retailer in Germany) predicts, only those with visual immersion capabilities will survive in the furniture category of the future. Sadly, that might be true sooner rather than later given our current global situation.