A session offering a glimpse into one of the possible alternative futures of retail took place Tuesday at NRF 2020 Vision: Retail’s Big Show. Participating were Pano Anthos, managing director of XRC Labs; Melody Lee, vice president of brand development with Shiseido America; and Liyia Lu, founder and CEO of ShopShops Inc. Anthos opened the session by explaining that XRC Labs was founded as an ecosystem to support very early-stage startups — people with an idea and maybe not even a product.
“In June of 2016,” Anthos said, “a Parsons grad who’d grown up in China and the U.S. came to us and said, ‘There’s this massive market where Chinese are buying American products on behalf of their friends and shipping them back to China. It’s nine billion in size. We’re going to build a mobile app and take over the world.’ We said, you have one part of this equation right: big market. Mobile app, not so much.”
Nonetheless, the Parsons grad, Liyia Lu, persisted, and got a chance to present at XRC’s demo day in July of 2016. “It was the worst demo day presentation we had ever seen,” Anthos said. “The app didn’t work, she had no traction — it was awful.”
But XRC saw something in her. “We said, we’re behind you, Liyia, 100 percent. It’s a big market. You can do this. What’s going on in China?”
“’Live streaming,’ she said. ‘I think I should go live stream.’”
Lu took a phone and went to a store and “did $3,000 worth of ecommerce sales in an hour, with no support of any kind,” Anthos said. “And she comes out and says, ‘Oh, my gosh! This is a business!’”
Lu presented the first version of ShopShops at NRF 2017. Since then, as Anthos says, she has taken the world by storm: ShopShops now has offices in New York, Los Angeles and Beijing. The company has more than 300 hosts, does 20 to 25 events a day, and is active around the clock except the hours between 2:00 a.m. and 6:00 a.m., China time.
The way ShopShops works is that a host will, by prearrangement, visit a retailer armed with one or more smartphones, and, well, shop. Try things on. Ask questions. Have products demonstrated. Pose.
All of this is live-streamed to consumers in China. They send questions to the host: Does it come in other colors? Can we see that in a different shade? Would you ask her to lean a little closer to the camera? If there’s one present at the session, they interact with the key opinion leader (an influencer; as in the United States, KOLs are a major factor in product success). They interact with each other: Wouldn’t that look great on your sister?
And they buy things, right there on the spot. ShopShops accepts payment, collects their commission, packages the product and mails it to the purchaser in China. It’s sort of like American ecommerce, except it’s interactive and there are no returns.
Melody Lee, a former Cadillac executive who shifted to the beauty business a couple of years ago, sees ShopShops as an effective way to test products on the Chinese market without actually launching them there. Shiseido’s Laura Mercier line, for example, is not yet on the market in China — but it’s on ShopShops. “They come in with a few phones and set up in a conference room,” says Lee. “It’s a very turnkey operation.” And effective: Each session draws 30,000-40,000 Chinese viewers and potential customers — 96 percent of them women.
As to the future, “We’re seeing more and more traffic from the third-tier, fourth-tier Chinese cities,” said Lu. “They’re developing more and more purchasing power — and they love to shop.”