Blending live streaming with ecommerce, we have a robust business model for digital platforms with enormous scope for value creation – Live Commerce.
Remember Alibaba Taobao Live back in 2016?
This was the first calculated integration of live video broadcast with ecommerce by the Chinese retail giant Alibaba, empowering customers to watch and shop simultaneously. As it yielded great success for the company, live commerce established itself as a strategic maneuver for marketing campaigns, boosting about as one of the most reliable digital tools for enhancing customer engagement and sales.
The evolving domain of live commerce
Live commerce is the intelligent combination of live video streaming and ecommerce, with an inherent potential to revolutionize the retail industry and consumer shopping experience. It essentially combines consumer engagement with a product and the instant purchasing feature offered by ecommerce live.
McKinsey estimates that the majority of the retailers deploying live commerce belong to the fashion and apparel industry – as many as 35.6%. This niche is followed by 7.6% beauty products, 7.4% food items, 4.6% consumer electronics and 3.6% furnishing and home décor products. In terms of consumer demographics, the live commerce audience is dominated by millennials and Generation Z.
This convergence of live video streaming and shopping has significantly improved engagement while closing the gap between the products and the consumers. As a result, exciting new frontiers have evolved in live shoppable media:
1. Online marketplaces
From Alibaba to eBay, AliExpress and Amazon, online marketplaces allow real-time interaction between buyers and sellers across geographical limitations. By integrating live streaming into these marketplaces, the sellers can deliver the closest possible and most personalized shopping experience. Real-time interactivity replicates the sense of urgency in a physical marketplace, prompting immediate purchase decisions.
2. Live auctions
Business enterprises are exploiting the live commerce platform to connect with bidders worldwide, opening up the bidding pool to participants from across the globe. Online live auctions enjoy promising prospects for a significantly large audience base with varied interests, brought together across geographical boundaries.
3. Influencer-hosted streaming
In today’s world of social connectivity, influencers enjoy powers as strong as the brands themselves. Using live streaming to promote their favorite products and brands, influencers play a pivotal role in influencing consumer purchase decisions. Based on their favorite celebrity influencer’s recommendations, consumers formulate their purchase habits.
4. Live events
Live streaming of events such as product launches, showcasing of limited-edition drops and announcing retail holidays like Black Friday are incredibly smart tactics to win the live commerce algorithm. Today, shoppable streaming allows the consumers to purchase items in real-time from live fashion shows on company websites, for instance, or through discovery shopping on Instagram.
How does live commerce create value?
Live commerce primarily thrives on a two-pronged approach; improving conversion and enhancing brand appeal:
Research suggests that 80% of people prefer watching a video compared to reading a blog post. Similarly, 82% of consumers like watching brand videos instead of social posts. Hence, live commerce capitalizes upon the power of video content to keep the viewers hooked while acting in the capacity of a telescope to document the customer purchase decision journey – from awareness to final purchase. There are several techniques that the brands deploy to create a sense of urgency for the customers – one-off coupons, limited-time discounts, etc. McKinsey reports that companies today are reporting 30% conversion rates for live commerce, which is 10x higher than conventional e-commerce.
Enhancing brand appeal
Live video broadcasts are much acclaimed for increasing the brand’s visibility and distinctiveness. Done well, live commerce plays a pivotal role in magnifying the brand’s appeal and awareness levels, strengthening its competitive position in the market. Young tech-savvy consumers who are keen on enjoying innovative shopping formats are particularly benefitting from live commerce today.
Engaging live commerce formats
Several popular formats are available to digital marketers to explore, each with its strengths. Which format works best for a brand depends upon the target audience and their demographic profiling.
- How-to tutorials: Product demonstrations and tutorials are the most promising live commerce format with incredible cross-selling opportunities. For instance, makeup demos hosted by beauty bloggers showcase the products to audiences and suggest how to combine them with other products.
- Interviews: Being the most personalized approach, interviews allow adding an element of authenticity to your brand. They make your products appear genuine and relevant and work best for building awareness and driving traffic.
- BTS videos: Behind-the-scenes videos offer to display the inside story of the brand, build brand awareness and improve customer loyalty. For instance, showcasing your backend sustainable supply chain activities will help project a socially responsible image of your brand amongst the consumers.
- Emerging tech: Innovative tech formats such as Augmented Reality (AR) and Virtual Reality (VR) can make the consumers’ live video shopping experience even more immersive and dynamic. The shoppers can see a product from every angle, enjoy virtual try-ons and make better purchase decisions.
Starting out in live commerce
With the COVID-19 paradigm shift, live commerce is in full bloom across the globe as more people eschew physical stores and get addicted to live shopping streaming. However, being an evolving channel, live commerce still has several unknowns. As time progresses and more brands jump on the bandwagon, best practices and key takeaways will continue to emerge at the forefront. Brands will inevitably need to adopt a thoughtful approach to learn the dynamics of the medium to exploit it optimally for a game-changing experience.
To start smart, they must partner with a professional live streaming solution to connect with their audiences through multi-streaming to several social media platforms and their website at once. As the traditional brick-and-mortar retail environment becomes obsolete and physical malls crumble, live commerce will inevitably establish itself as the ultimate formula for success for brands in modern times.