A Rising Trend for 2023: Contextual Commerce

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What makes a store like IKEA exciting as a retail experience is not its maze-like showrooms, wide selection of products, or even its Swedish treats. What makes IKEA different is its perfectly decorated full-room setups that help shoppers visualize what different products look like in their intended contexts: Bedrooms, living rooms, kitchens, etc.

These setups offer shoppers much-needed visual context, as well as the opportunity to see, touch, and experience the products firsthand. By offering these staged rooms as visual guidance on how to mix and pair products to achieve a certain look, they remove some of the friction around what could be an overwhelming purchasing decision. And more brands are taking note, especially in the DTC space.

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Contextual commerce is on the rise as brands work to find new ways to anticipate buyers' preferences and deliver more immersive experiences with personalized context in-store.

It makes sense: Contextual commerce addresses some of the biggest pain points modern shoppers face by offering a more experiential approach to shopping. It goes beyond the digital storefront and engages shoppers by helping them more accurately picture themselves using the product in their own lives.

“Making the shopping experience attractive…is about telling a story and helping customers understand how to use a product, ultimately taking them to the goal they came for,” said Sonja Keerl, Director of GTM & Associate Partner at The BaaS Company. “That’s what contextual commerce is about.”

Brands turning contextual commerce into a strategic advantage

Brands are moving toward contextual commerce as a key differentiator within a noisy, crowded market. They can create buzz with a one-of-a-kind experience, assist engaged shoppers, and again, just provide helpful context to inform the shopper as they browse.

We see this in the case of DTC mattress and bedding brand Casper. There’s only so much Casper can do to gain an edge over its competitors, but with in-store “nap rooms” the brand saw a chance to present its products in a real-life setting. These rooms, fully outfitted as cozy bedrooms, are a way for curious buyers to book a test-run snooze in-store on their mattress of choice.

By allowing customers to try out their product via nap room sessions, they created an exciting, engaging experience for shoppers that earned them positive publicity, too.

Credit: patch

Another example comes from Juneshine, a beverage company known for its hard kombucha.

Juneshine launched an experimental strategy to embrace contextual commerce: opening taprooms in key markets across the US market. Each taproom allows customers to taste every flavor of Juneshine and get a personal tour of their brewing process, which helps foster a deeper connection with the brand.

It also allows for quick feedback loops when the brand is testing new flavors and helps the brand get real-time insight from tasters willing to give new brews a try. With these locations, the traditionally DTC and wholesale brand gets a footprint of its own where it can build community and host engaging events with collaborators, too.

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Credit: Bloom by Kayla

Contextual commerce and tech

We can’t stop at brands creating exciting in-store experiences when we talk about contextual commerce, however. Contextual commerce is now reaching new heights with the help of technology that creates even more engaging experiences in-store and beyond.

Augmented and virtual reality

AR/VR is one of the most game-changing use cases of contextual commerce for brands. This technology can replicate the in-store experience no matter where a customer is, allowing them to virtually try out a product—like furniture or clothing—and make an informed decision with more context on fit, sizing, colors, and placement. Another bonus: This can significantly reduce expensive returns since customers have more information about what they’re buying online.

Credit: Blippar

Matt Bolivar, the Retail Vertical Lead for Snap Canada, spoke about the importance of augmented reality for brands. He said: "When it comes to retail, we've seen many brands use augmented reality to 'augment' the shopping journey. We've seen brands like Puma Canada use a multi-format approach with augmented reality and video to drive a five-point lift in action intent."

Smart devices

Smart devices have also made contextual commerce more impactful by improving customer service at scale. In-store Alexa voice assistants are available inside Amazon Fresh stores, for example, to help shoppers resolve queries while they shop.

Credit: Source: Good Morning America

The bottom line: When you pair up shopping experiences with rich context and tech that improves the overall shopping experience, everybody wins.

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Contextual commerce and the future of retail: A look ahead

When done right, contextual commerce is a smart way for brands to give customers a more personalized and immersive shopping experience that results in more sales. As more DTC brands venture into brick-and-mortar retail stores, we can expect to see this trend more and more.

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