Can a Pandemic Inflect Local Commerce Tech? Part II
This post is the latest in our “Retail Recovery” series.
This is obviously a tough time for local commerce. Whether it’s SMBs or multi-location brands, lockdowns are causing real pain. What’s more, depending on where businesses are located, there are more coronavirus-related challenges to come. But the question is, will those who survive become battle-tested, faster, and stronger?
Though that question sounds hokey, it’s important. Local merchants are being forced to adopt new technologies and channels just to stay alive. Could that accelerate their digital transformation? When the dust settles in a post-Covid world, will they have evolved a full decade in just one year?
This adoption-inflection principle was covered in part 1 of this series as a function of the market’s new demand signals and consumer behavior. Things like curbside pickup and other retail fulfillment models align with social distancing, so retailers have been forced to scramble and make major operational changes happen.
Returning to this exercise, what about the adoption accelerants happening on the supply side? Tech giants who provide marketing and operational tools for local businesses have been in hyperdrive over the past few months to roll out new Covid-era features.
Here are three areas where we’re seeing the most activity … and where we could correspondingly see the most local business evolution.
Brick-and-mortar lockdowns have forced many businesses to raise their e-commerce game. In some cases, this was a long-neglected area that they’ve quickly moved to the front burner. After hovering in the 10-11% range for the past several years, e-commerce is now 14.5% of U.S. commerce.
Several tech giants have launched or advanced e-commerce programs to scratch that itch. For example, Facebook launched Facebook Shops, which lets local merchants set up full-fledged e-commerce shops with a relatively easy onboarding process. One million businesses have already signed up.
Similarly, Instagram is expanding the Instagram Shopping program for direct selling by a wider range of businesses, including SMBs. This program lets businesses add “buy” buttons to their Instagram posts. Now anyone can do this, as long as they follow eligibility requirements.
Pinterest has also joined the party with a new “Shop” tab in its Lens search results. Lens is Pinterest’s visual search feature. Like Google lens, it’s a “search what you see” proposition to point your phone at items in the real world to trigger Pinterest searches for visually similar merchandise.
Lastly, Walmart has partnered with Shopify to bring its online merchants into Walmart Marketplace. In addition to the lowered barriers for e-commerce that Shopify has always offered, this move now sweetens the deal with Walmart-scale distribution.
We’re all becoming more astute with video. Whether you’re a corporate worker joining Zoom for a Tuesday staff meeting or a psychologist talking to patients, comfort and savvy with video conferencing has spiked. For local merchants who sell things, this could play out in similar ways by boosting production quality.
Similar to the above examples for e-commerce, tech providers have rolled out new programs to help make the embrace of video happen. The first comes from the 800-pound gorilla in the UGC video arena: YouTube. Its new YouTube Video Builder offers drag-and-drop ease in putting together promotional videos.
The video builder’s features include pre-made templates, music, and the ability to import existing 2D photos (see example below). Merchants can then produce six-second or 15-second videos that can be promoted and distributed through Google ads or with all the ease of a YouTube link or embed.
Speaking of Google, it’s rolling out video offerings for businesses that fall outside of YouTube. Just last week, its Area 120 incubator unveiled Shoploop. The web app lets businesses showcase their wares through 90-second videos. Users can browse, search, save items, follow sellers, and transact.
Notably, Shoploop fuses the above two adoption areas: video and commerce. In fact, Google says that Shoploop was inspired by consumers that use a combination of social media, video, and e-commerce all together when shopping. Instead of bouncing users around, Shoploop is meant to converge the process.
3. Digital Presence
Lastly, local business tech adoption will map to an area we’re calling “presence.” Like e-commerce, this is something that many merchants have put on the back burner for years. But now that offline presence has been literally taken away from them, digital presence has become the counterbalance.
Presence comes in many flavors that can be as basic as a website (which roughly 36% of small businesses don’t have). It can also include intermediate strategies such as optimizing one’s local listings or actively engaging with customers and reviews in channels like Yelp (a.k.a., reputation management).
So what have tech giants done over the last three months to make digital presence more attractive? Since early March, Google has been making changes to Google Shopping and Google My Business that make it easier for local merchants to communicate shifting details (think: hours of operation).
Yelp meanwhile rolled out “virtual service offerings.” This gives local businesses a designated area to define the virtual services they are dynamically rolling out. This mostly caters to things like lessons, performances, yoga classes, or other normally in-person activities forced to go virtual.
As we examined a few weeks ago, Snap has likewise gotten in on the “presence” action with new local business listings that are part of its broader refresh of Snap Map. Known as Local Place Promote, it gives local businesses a way to get in front of Snapchat users in geographically targeted ways.
Presence offerings are also happening from smaller providers like Canva’s democratized graphic design, WhatsApp’s “conversational commerce,” and Venmo’s local merchant payments. From all of this, it’s clear that tech providers are seizing the opportunity. The next few quarters will tell if local businesses bite.