The Future of Ecommerce by Connie Chan
TLDRThe video script discusses the evolution of online commerce, emphasizing the shift from search-based shopping to discovery-based shopping. It highlights how artificial intelligence is being utilized to analyze consumer behavior, offering personalized product recommendations that not only match preferences but also factor in sales and discounts. The script also explores how platforms like TikTok and YouTube, along with social media influencers, are driving discovery-based shopping through engaging content like unboxing videos and testimonials. The future of commerce is predicted to blend the joy of offline shopping with the convenience of online, using technology to provide a personalized and interactive experience that increases conversion rates and reduces returns. The narrative also touches on sustainability, with brands adopting AI-powered software to manage inventory and embracing resale programs to minimize waste.
Takeaways
- 🔍 **Search-Based Commerce**: Consumers use search bars to quickly find and buy desired goods, which is efficient but can limit discovery of new products.
- 🛍️ **Discovery in Commerce**: AI is being used to offer personalized product recommendations, enhancing the shopping experience with tailored suggestions.
- 📈 **Conversion and Personalization**: Algorithms can suggest products that not only match preferences but also offer discounts, increasing the likelihood of purchase.
- 📱 **Discovery-Based Shopping Tools**: Utilizing photos, short videos, and live streams, platforms like Timu provide personalized and gamified shopping feeds.
- 🎥 **Influence of Media**: Unboxing videos and testimonials popularized by TikTok and YouTube are driving discovery-based shopping.
- 🗣️ **Social Influence**: Influencers and social media platforms like Facebook groups help shoppers get feedback and influence buying behavior.
- 🧧 **Deals and Overstock**: Brands can use discovery-based commerce to offload excess inventory through limited time sales or special coupons.
- 📊 **Personalization and Conversion**: Retailers need to bring offline benefits like fitting rooms and sales reps to the online space to increase conversion rates.
- 🤝 **Social Proof**: Features like sharing a shopping cart with friends for feedback can provide validation and increase confidence in purchases.
- 👔 **Technology for Fit and Information**: Tools like augmented reality dressing rooms and body scans can instill confidence in online purchases.
- 💬 **Interactive Sales Reps**: Online sales reps in private chats or customer portals can replicate the helpful human interaction of offline shopping.
- 🎁 **Live Shopping and FOMO**: Live shopping experiences can convert interest into sales by showing products in action and creating a sense of urgency and community.
- ♻️ **Sustainability and Returns**: Brands are focusing on reducing returns and excess inventory through AI-powered software and tech-enabled resale programs.
Q & A
What is the current dominant model of online commerce in the Western world?
-The current dominant model of online commerce in the Western world is search-based, where shoppers type directly what they want into a store search bar, add their desired goods to their carts, and then check out.
What is one limitation of search-based commerce?
-Search-based commerce deprives consumers of the delightful part of shopping discovery, as it focuses on finding specific items rather than discovering new ones.
How are retailers using artificial intelligence to enhance shopping experiences?
-Retailers are using artificial intelligence to collect data from purchase history and others to provide personalized recommendations, including items that match a customer's preferences and offers that are more likely to convert.
What is the future of commerce in terms of product discovery?
-The future of commerce involves platforms recommending not just products a customer likes, but specific versions of those products with preferred features and discounts, using algorithms to predict customer preferences.
How does discovery-based shopping work?
-Discovery-based shopping works with various media like photos, short videos, and live stream videos. It often involves personalized and gamified feeds of products, unboxing videos, testimonials, and real-time sales through live streams.
What role do influencers and social media play in discovery-based shopping?
-Influencers and social media play a significant role in discovery-based shopping by driving product discovery. Platforms like Facebook groups and group chats allow shoppers to get feedback from both sellers and other buyers, influencing their buying behavior.
How can brands make the shopping experience fun again for consumers?
-Brands can make the shopping experience fun again by combining the joy of offline shopping discovery with the convenience of online shopping, offering personalized recommendations, and using technology to create interactive experiences.
What are some ways retailers can offload overstock using discovery-based commerce?
-Retailers can offload overstock by offering limited time sales, special coupons, and highlighting deals on excess inventory, making those items more likely to be seen and purchased.
How can retailers ensure that customer interest turns into an actual sale?
-Retailers can ensure that customer interest turns into an actual sale by providing personalized information about online purchases, using social proof, implementing augmented reality dressing rooms or body scan technology for better fits, and training online sales reps to provide relevant information.
What is the impact of live shopping on customer confidence and conversion rates?
-Live shopping increases customer confidence by allowing them to see products in action, receive tutorials, and participate in giveaways. It also introduces a fear of missing out (FOMO) and a sense of community, which can help convert interested shoppers into buyers.
How can improved product discovery and conversion help reduce return rates?
-Improved product discovery and conversion can help reduce return rates by providing consumers with more relevant and delightful products, and by giving them access to the right information to make more informed and confident decisions.
What role does AI-powered software play in managing excess inventory and predicting returns?
-AI-powered software factors in real-time data such as sales, sell-through rates, and conversion to help retailers better predict returns and manage excess inventory in their warehouses.
Outlines
🛍️ The Future of Commerce: Discovery-Based Shopping
The first paragraph discusses the current state of search-based online commerce, where consumers directly search for products they want and purchase them efficiently. However, this method lacks the discovery aspect of shopping that leads to finding unexpected items. Retailers and brands are leveraging AI to analyze purchase history and recommend products that consumers might be interested in, potentially increasing conversions and reducing returns. The future of commerce is seen in the combination of the joy of offline shopping discovery with the vast options available online. Discovery-based shopping is being enhanced through personalized feeds, gamified apps, unboxing videos, and testimonials. Influencers and social media play a significant role in driving this type of shopping, and brands are encouraged to make the shopping experience fun again for consumers. Additionally, offloading overstock through limited-time sales and special coupons is a strategy that appeals to consumers looking for deals.
🔄 Reducing Returns and Managing Inventory
The second paragraph focuses on the importance of ensuring that improved product discovery translates into sales rather than returns. Excess inventory is a costly issue for companies and has environmental impacts. To mitigate this, retailers are encouraged to use new consumer technologies to provide shoppers with the variety and information they need, which can lead to more informed decisions and confident purchases, thus reducing return rates. Brands are also integrating AI-powered software into their purchasing decisions to predict returns and manage excess inventory more effectively. Furthermore, companies like Target, Lululemon, Gucci, and Rent the Runway are adopting tech-enabled resale programs and focusing on second-hand shoppers. This approach is driven by sustainability and the desire to reduce waste, creating a more personalized and interactive online shopping experience that aims to increase customer conviction before and after buying.
Mindmap
Keywords
💡Search-based Commerce
💡Product Discovery
💡Artificial Intelligence (AI)
💡Conversion Rates
💡Discovery-based Shopping
💡Influencers and Social Media
💡Overstock and Limited Time Sales
💡Personalization
💡Social Proof
💡Augmented Reality (AR)
💡Live Shopping
💡Sustainability and Resale Programs
Highlights
Search-based Commerce allows consumers to quickly find and buy exactly what they are looking for.
Search-based Commerce deprives consumers of the delightful aspect of shopping discovery.
Artificial intelligence is being used to provide personalized product recommendations based on purchase history.
Commerce platforms are expected to recommend products tailored to individual preferences, such as neckline and color, along with discounts.
The future of Commerce involves brands combining the joy of offline shopping with the options of online shopping.
Discovery-based shopping uses photos, short videos, and live streams to engage consumers.
Apps like Timu offer personalized, gamified feeds of products and deals.
Unboxing videos and testimonials popularized by TikTok and YouTube drive discovery-based shopping.
Influencers and social media platforms like Facebook groups influence consumer buying behavior.
Discovery-based Commerce offers an opportunity for brands to make shopping fun again for consumers.
Chinese shopping platforms have shown that consumers love good deals, which can help offload overstock.
Smart retailers in the U.S. are figuring out how to bring the offline shopping experience online effectively.
Retailers need to bring the benefits of offline shopping, such as fitting rooms and sales reps, to the online experience.
Personalized information increases conversion rates, and social proof through friends and family can help.
Augmented reality dressing rooms and body scan technology can instill confidence in online purchases.
Online sales reps and live shopping can replicate the human interaction of offline shopping, increasing shopper confidence.
Live shopping introduces a sense of urgency (FOMO) and community, which can help convert sales.
Retailers are using AI-powered software to predict returns and manage excess inventory more effectively.
Sustainably-minded consumers are driving the adoption of tech-enabled resale programs and focus on second-hand shopping.
Startups are powering resale marketplaces to match individuals with resellers for offloading excess inventory.
Technology is being used to personalize the online shopping experience, making it more interactive and increasing conviction in purchases.
Transcripts
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