With consumers increasingly buying online, brands have been experimenting with shoppertainment – a term that is closely tied to live commerce. It is brands’ new way to connect with buyers on a human level while maintaining the ease of online/mobile shopping. Here is a rundown of live commerce, the trends in the market, and how it could potentially impact the world of eCommerce.
What Is Shoppertainment?
Shoppertainment is a neologism between shopping and entertainment. Most importantly, it is a retail tactic for providing engagement to customers by way of giving them entertaining in-store shopping experiences. As it pertains to eCommerce and marketplace selling, shoppertainment pertains to live streaming.
What Is Live Commerce?
Live Commerce first emerged back in 2014 when Mogujie, a fashion eCommerce platform started experimenting with it. Soon after, Alibaba’s Taobao, the world’s biggest ecommerce website, followed suit.
From the live streams of these two eCommerce companies, the hosts would try on different clothes and interact with viewers through live chat. The viewers could ask the host how the fabric was like and could even request the host to try on clothes along with specific accessories. The experience for the customers/viewers was similar to how one can have direct contact and interaction with a salesman when one shops from a physical retail store or mall.
In this aspect, eCommerce players were able to realize the potential of live streaming for these 4 essential roles:
- Customer engagement
- Help customers better understand products
- A more personal interaction between seller-buyer
- Activate sales
How Can Brands & Sellers Utilize Live Streaming?
- Product Launches
When launching a product online, it can be hard to connect with potential consumers without personal interaction. But that’s where live streaming comes in. Live videos automatically invite a lot of attention and views and since you are able to talk with people directly, show the product in action, and elicit excitement among prospects, there is a high likeliness of increased conversion rate.
- Product Demos
Through live streaming, you will be able to demonstrate how your product can help solve people’s problems the same way sales people do in Malls and retail stores which inevitably invites curiosity and encourages people to make a purchase.
If you’re selling in an IT or tech-related niche, live webinars allows you to organize an event where experts can talk about the advantages of your products and the possible solutions that it has to offer towards customers. It is also an opportunity for customers to ask questions and learn more about your tech or product.
- Unboxing of products
You will be able to introduce your products to new markets by collaborating with influencers and have them post an unboxing live video as a way to elicit interest about your product. Since influencers possess credibility within their niche, audiences will associate their level of trust with your product or brand.
This is also a tactic that can be done by collaborating with influencers. The more social proof you have of your product, the more trusting and more willing to purchase people will be towards your brand.
What’s The Importance Of Live Streaming For Online Sellers/Brands?
Live streaming in the eCommerce arena hasn’t been with us for too long but it is already gaining a lot of traction. Many big companies and influencers have already started to jump into the bandwagon. With that, eCommerce live streaming is projected to take off in the near future.
Historically, TV and radio helped many businesses commercialize this brand. And this is precisely what live streaming is doing for the new generation of online sellers and brands. Below are 5 advantages of Live Commerce.
1. It’s Advertisement At Zero Cost
Typically, if you want to get better reach or if you want to increase your conversion rate, you’d need to run PPC or CPC campaigns. But when you go live through Lazlive, Shopee Live, or any other marketplace/streaming platform, you get free exposure and for most cases, instant sales activation.
2. Increase In Customer Engagement
In eCommerce, there is very little room for customer engagement. eCommerce players with their own websites can only go as far as posting informative and relatable content while marketplace sellers/brands have none.
Live Commerce gives you a chance to connect with customers on a more personal level. By providing demos of your products, you are able to connect to users that have high buying intent towards your items. At the same time, you also get to interact with them on a more characteristic level that goes beyond regular customer inquiries.
3. Increase In Conversion Rate
When there is increased customer engagement, viewers will stay in your live stream long enough for them to be converted into actual sales.
During a live stream, especially in LazLive or Shopee Live, live stream hosts have the option to provide vouchers during the live and then customers can purchase items during the live stream. In that sense, the experience for the customer will be similar to an actual sales event occurring in physical retail stores or malls.
4. Customer Retention
If you were to go on a live stream and you had 500 viewers and then you were only able to convert half of them to revenue, this does not mean that you lost 250 sales.
One of the most fundamental benefits of live streaming is customer engagement. Due to increased engagement, people become familiar with your products and most importantly your brand. As people grow fond of you, customer loyalty is integrated and developed into your market. Customer retention can provide more value than gaining new customers in the long term.
5. Target New Customers
For eCommerce live streams, one popular tactic is running contests and giving away prizes (either though the form of vouchers or a physical product). And then all you have to do is to share your live stream on social media and encourage friends, family, your own audience to do the same.
People don’t always have an active intent to buy so when they see eCommerce ads, it’s not all the time that you will be able to convert but when you share a live stream that intends to provide giveaways and contests with prizes, people immediately see how they will benefit from participating in your live event.
For instance, if in your live stream, you gave away some vouchers, you are most likely to convert new customers because the participants would want to enjoy their vouchers by making a purchase. The same goes when you provide giveaways or prizes that are in product form. You could give them prizes that are complementary products to items that you are selling. Hence, you will give them intention or encouragement to make a purchase.
Live Commerce Moves The Retail Industry Forward
Zappos, one of the big-name companies on online shoe and retail businesses, was one of the first institutions to pitch the idea of selling shoes online and has struggled to convince investors of its value. This was 2 decades ago. Now, online shopping has completely taken over especially since the emergence of the globalwide COVID-19 pandemic.
If there’s one thing we can learn from Zappos, it would be the importance of customer experience in eCommerce. One of the reasons Zappos was able to get ahead of its competition was its propensity to encouraging consumers to purchase multiple sizes of the same product. And then the company would provide quick and easy ways to return the products that didn’t fit free of charge.
Today, we ensure positive customer experience through mobile apps, chatbots, and machine learning technologies (that reads people’s historical search data to suggest products that buyers will be most interested in purchasing).
And with the increasing popularity and adaptation of eCommerce live streaming, retailers and brands are realizing the wealth of opportunities in marketing, customer service, and even in revenue.
There used to be a huge gap in online shopping and retail shopping because of the lack of personal interaction. But by combining online shopping with live streaming technology, companies are able to bring customers a step closer into an in-person experience.
Live Commerce In The US
Per Danielle Bailey, Managing Vice President of intelligence firm L2 Inc, China used to be perceived as a copycat but in terms of social commerce, mobile commerce innovations, and omnichannel retail, China takes the lead.
As a matter of fact, western tech and retail leaders including the US have been inspired and have started to adapt their eCommerce methods.
Amazon launched Amazon Live back in 2019 where models would put on different outfits. Meanwhile, the host of the live event would describe the material. There are also live events where guest presenters would demonstrate how to use certain tools.
Dote, a mobile shopping company based in San Francisco also released a new feature called Shopping Party – which incorporates live streaming of influencers into their mobile shopping app.
Lauren Farleigh, founder and CEO of Dote says that her goal is to recreate the experience of a social trip to the mall. The Shopping Party provides buyers with a virtual mall experience wherein people will be able to scroll products on display and then an influencer will be on a live video promoting the item. The viewers can interact with the influencer in the chat box.
Live Commerce In China
World’s Biggest eCommerce Website, Taobao dominates the live streaming trend in China. Taobao empowers many farmers, entrepreneurs, and business owners by way of C2C live streaming that users can do via the platform or its standalone app.
Successful influencers on Taobao then ascend to celebrity status which helps elevate the customer experience. For instance, sellers who sell cosmetics can host a live event where the viewers can ask questions and learn techniques on how to best apply their products.
Aside from acquiring fans, live streaming also helps online sellers and brands from China make big bucks. As a matter of fact, in 2018, the top 81 live streaming influencers of Taobao were able to generate sales of over $15 million.
We also have Douyin and Kuaishou which are the second and third top players in live commerce following Taobao. Even though these are ultimately, short video platforms, there is data that is suggestive of the potential of these apps for eCommerce.
Douyin is the Chinese version for TikTok. The nature of the platform is to provide entertainment through the means of short video clips but in 2018 it partnered with Taobao and Tmall. That way, people can view Taobao and Tmall products via Douyin.
In the same way, Kuaishou introduced a feature that will allow live streamers to sell goods through an in-app store.
There’s also Jiaqi Li, a seller who once sold 15,000 tubes of lipstick in just 5 minutes through live streaming.
MOGU, a leading fashion selling platform previously announced that eCommerce live streaming accounted for 53% of their gross merchandise value in the third quarter of 2020.
Live Commerce In Korea & Across APAC (Asia Pacific)
Fashion Clothing Company LF Corp. has merged real-time chat, live streaming, and one-click purchases as a way to create a seamless online shopping experience for customers. As a result, LF Corp. has been reaping a 30% year-over-year increase since 2015.
TMON, or what was previously known as Ticket Monster, was among the first retail platforms that tried live commerce in Korea back in 2017. Since its first video was streamed in September 2017, there has been a recorded 3,036 percent rise in viewers per April 2020.
In Korea, traditional retailers and IT companies such as Lotte Shopping, Hyundai Department Store, Kakao, and Naver have also started to participate in live commerce.
Lotte Shopping is one of the most eager live commerce participants because they have influencers going live on its app Lotte On. Primarily, this retail platform sells women apparel and cosmetics but Lotte Shoppings says that they plan to expand the product categories and the affiliates that use the platform.
In March 2020, Hyundai Department Store went live and sold women’s fashion brand G-Cut and raised 14 million won in 1 hour. According to Hyundai Department Store, this amount was 30% of their monthly sales.
Naver had just initiated their live streaming platform for their general vendors. Meanwhile, Kakao had recently released Kakao Shopping Live which is a beta service for their live commerce. Some of the companies that had recently utilized this service are Pulmuone and Fila.
How Will Live Commerce Impact or Change The Market?
Virtual Reality/Augmented Reality
Huawei is one of the first companies to release a live commerce platform integrated with augmented reality capabilities. This solution will allow influencers to connect their phone to multiple cameras and switch between cameras with a single click. Real-time backdrop processing is also integrated into the technology which will make way for digital backdrop replacements as well as displaying digital 3D models in real-time.
Better Customer Understanding
eCommerce websites and marketplaces typically use historical data to give sellers a good understanding of consumer behavior. But with live commerce, we make room for seller/brand-consumer interaction. Hence, apart from analytics and insights, brands/sellers can learn about consumers through their interactions (what they want need, what they’re asking about the brand/product)
Popshop Live is a live streaming platform where brands and sellers can host live shows. It has reached massive success so far for the brands that use it. Japan LA, for instance, was able to accumulate $17,000 in sales from a single live stream show.
According to Japan LA, this is more than their average offline and online sales. TechCrunch says that part of the reason for Popshop Live’s success could be attributed to the sense of community given to the buyers and sellers. Right now, the platform only comes in the form of invite-only.
TikTok has also been focused on live streaming since the start of the COVID-19 pandemic. It has also started to integrate “Buy Now” buttons to allow users to make purchases through links posted on the platform.
Live streaming has made way for us to bridge the gap between convenience shopping and personal interaction. And even though part of the reason live commerce became extremely popular is due to the COVID-19 pandemic, adaptation of consumer behavior and technology makes it possible for live streaming to remain a crucial pillar of the buying experience thereafter.