- Kristopher Fraser |
With the global pandemic having an unprecedented effect on the retail sector, companies are looking for new ways to service customers. In April while the majority of the world was still under quarantine, e-commerce sales jumped 49 percent compared to early March before shelter-in-place orders. This also led to a rise in personal shopper technology, which brought homebound shoppers to the inside of a store, where a client-advisor walks the store, highlighting products, answering questions, and helping with the check-out process as though the customer was physically present.
Powerfront, a tech company that invents AI-powered customer service solutions for luxury brands, was one of the companies at the forefront of this new virtual shopping approach. The company’s CEO, Hadar Paz, was able to take a few moments to talk with FashionUnited about the future of fashion, e-commerce, and how virtual shopping will transform retail.
What’s going on in video technology that people need to know about?
It’s very uncertain as to what is going on. Right now as we speak, the world doesn’t know if they are going to close stores or if they are going to open everything. That creates a need for something that can keep stores going and allow a way for customers to still “come in.” Stores are really hungry for new technology, especially video technology. I don’t know if we are in a permanent situation where physical retail will be at a halt, or if virtual will become the dominant method of retail. Virtual shopping might be a trend, or it can change everything.
We can expect to see a rise in these showroom type spaces that are built for video selling. Customers can connect with store associates and retailers can still sell “face-to-face” in a way. This type of technology is better suited for the luxury markets rather than mass market brands. It’s much harder to showcase a product when you have a lot of SKUs.
How do you clientele when people are nervous about being in stores?
You need a video platform, and you don’t want to use FaceTime or something like that. You need something where the client can connect with you. Our platform allows things like screen sharing functions to showcase customer options and for customers to show you what they are looking for. That’s just one example of how clienteling is changing.
Why are luxury brands on the forefront of this retail change?
Luxury brands are always looking for ways to differentiate themselves. Think about the internet. A luxury brand can build a beautiful website, but there’s another company that sells similar items for a fraction of the cost and they are building the same type of website, it becomes hard for luxury brands to differentiate themselves in that way. Luxury brands are still in a place where they can master the physical, and they are looking for ways to differentiate their stores. Powerfront worked with Gucci on their virtual experience, and it was done beautifully.
How are you seeing shopping habits change?
We have seen an increase of 45 percent in e-commerce sales for some companies that have begun using our technology. That’s just e-commerce, so it’s not enough to off-set the stores' loss from physical shopping. What we’ve learned as well is that video shopping is a new pocket of customers. Customers who use video to shop are a brand-new avenue of customers. The online customer doesn’t need that, they always bought online, they don’t need a video to be told to shop. There’s a pocket of customers that stopped going to the stores, but they love the service of luxury fashion brands. The conversion rate for those people is 35 percent, which is very impressive. Virtual shopping is very much a VIP kind of experience. It’s like the days when online shopping started. You figure out what will work and not work.
Virtual shopping is the next frontier of retail
How will this help companies retain employees?
This goes back to the showroom idea. An online customer and a video customer are still the same customer. If you can get the same traffic, and if you see the traffic to your website has increased, then you’re in good business. At the same time, you are still servicing those people that need face-to-face service. Now, retailers are still shy around spending money hiring people to just work e-commerce, but if you get a lot of customers used to the online experience, you have to change that to accommodate them.
What are the demographics of your customers?
Our customers aren’t just young, it’s all demographics across the board. We attract every spectrum of the luxury consumer from across the globe and all age ranges.
How else do you see the future of virtual shopping changing
Retail is going toward a special type of store that can accommodate for virtual shopping. If it’s successful, retailers will say there’s something there. They’ll start restructuring stores to better sell virtually. There are still challenges with developing this technology, but eventually stores might start creating dedicated stores that have no physical shopping. They would only be built for selling through video. Conversion is key.
How does this fit into an omnichannel strategy?
If you can’t have the physical store, this is perfect for an omnichannel strategy. You can really track customers, know exactly who they are, and connect the dots between personal calls and visitation on the website. It makes very omnichannel much easier. It’s harder to connect the dots to physical store shoppers that browsed a product online last night then come in and shop in-person. If you’re shopping via a virtual appointment then going to a physical store to buy, it’s much easier to track that correlation.
photos: courtesy of Powerfront