Live commerce is giving eCommerce the facelift it deserves. It is the ultimate user experience that closes the gap between online and physical spaces by harnessing the power of video. We could go on for hours about the opportunities live commerce can unlock for your business, but we have narrowed it down to five.
What is live commerce?
Live commerce blends live streaming with eCommerce where the participating user can purchase inside the experience. The multi-faceted channel allows brands to format it in a way that suits their needs. For example, one-off events can be used to increase awareness around product launches or can be fine-tuned to target high-value shoppers by offering a more intimate one-to-one service.
This emerging technology has broken out from China’s behemoth live commerce market, where it is estimated to be worth $423 billion in sales by the end of 2022. On the contrary, US sales are expected to reach $25 billion in sales by 2023, according to Coresight Research.
Live Commerce in China – Interesting Stats
- 10% of total eCommerce is generated by live video shopping
- 90% of the biggest brands hosted live shopping events during Singles’ Day 2020
- 300 million of the Taobao users watched these live streams during the 11-day festival
- Live video shopping conversion rates are as high as 40%
What is the difference between live commerce and social commerce?
Social commerce invites shoppers to purchase inside a social channel without exiting the page. The user journey tends to focus on product discovery, but recent applications have made it possible to shoppers to add items to checkout. Live commerce, on the other hand, can be applied across several channels in the form of one to one or one to many video formats.
5 reasons why it’s the next big thing in eCommerce
1. The popularity of video as a communication channel is accelerating live commerce
COVID-19 opened pandora’s box for businesses to deliver innovative ways to engage with customers, digitally. In 2020, consumers were asked what excited them most about new forms of shoppertainment and live streaming came out on top. 59% settled on live streaming on eCommerce platforms, with 53% saying live streaming on social media was enough to excite them.
And you may tell yourself, well yes in 2020 COVID-19 gave people no option but to use video as a means for entertainment, people will be fatigued by now!
New research suggests otherwise.
Vonage’s recently published report on Customer Engagement shares the shocking revelation that the three most commonly used communication channels have begun their downfall, with video and non-SMS messaging shooting up.
Here are some eye-opening facts:
- There has been a 300% growth in the number of respondents who chose video chat as the primary channel to talk to businesses
- 3 in 5 consumers worldwide are video chatting with businesses or service providers more than they were 18 months (report published December 2021)
- There has been a 83% change for consumers favouring video as their favourite communication channel. Messaging via non-SMS apps and phone call via messaging apps saw a 29% and 14% change respectfully.
- Customers who adopted emerging channels of communication during the pandemic did not return to old habits
- Traditional channels (SMS, mobile voice calls and email have all declined)
What’s the relationship between the rise of video and live commerce?
The means of customer engagement has changed. During the pandemic, the only option to communicate was through video. This has now influenced a cultural shift in how we use video to communicate. While traditional means of communication is still the primary use, businesses should now seriously consider adopting a multi-channel strategy to engage with shoppers.
2. Drive conversion rates and average order value
Shopping trips were a delight for most. Go out for one item and end up coming home with several. Most likely you were captivated by a Sales Assistant at one point. While some can be seen as pushy, it shines a light on the value real people have on these transactions.
What lacks in online shopping is that guided tour of your products with expert knowledge educating customers on what is right for them.
That’s why live commerce welcomes those physical conversations into a digital space.
How does live commerce do that?
How you engage with your customers will determine whether they purchase. After all, 73% of people say customer experience is an important factor in their buying decisions.
1. Customers can be reassured and purchase in confidence
- Shoppers often need reassurance on the products they are buying. Many come with questions which if answered will steer them away to competition. Opening digital dialogue brings the customer closer to your brand and its values, ensuring purchases are made with confidence
2. Customers have their own personal shopper
- Once a premium in shopping malls, customers can take a step back (or in their case, a seat on the sofa), with a warm beverage and let the expert guide them through their offering. Embedded technology such as image sharing, up-sell and cross-sell functions adds to the realism that they are shopping in-store.
- This can see an uplift in web traffic looking to take advantage of the personalised service
3. Customers can be entertained
Live commerce brings that social element back into online shopping. If you are hosting one to many streams, you can keep viewers engaged by introducing exciting new product launches and talking about pain points that resonate with them.
For inspiration, check out what live commerce looks like in China right now.
3. Take your pick – different live commerce formats to suit your business goals
Alibaba and Taobao are the pioneers in live commerce across marketplaces. Amazon Live has stepped into the space where celebrities and influencers can curate must-have products and showcase top deals.
2. One to one
One to one focuses on the intimate two conversations that happen in-store. Works particularly well with DTC brands that sell products that are high consideration.
Instead of using celebrities or influencers, you would utilise your very own virtual retail team. Many sources from in-store associates already or train experts to take calls from contact centres and from home.
3. One to many
Harnessing on millennials and Gen Z who take influence from social media, hosting one to many live streams on social is a great way to engage with the younger audience. Works with product launches and events. However, if your reach is small it is recommended to first build your social following and host consistent one to many streams to establish a community within your business.
4. One to One Live Commerce builds consumer trust and loyalty
Social media, reviews, product images can alter the highly sensitive consumer perception of your products. All it can take is one bad review, one poor customer service engagement to deter customers away. The more loyal ones will be more resilient, but for how long?
Vonage asked respondents “how likely would you be to stop buying from a business or stop using their services as a result of repeatedly experiencing each of the following”
The overarching consensus is the lack of human support: communication dead ends (46%), no human operator (46%), and stuck in automated chatbots (46%).
And when shopping for high consideration and expensive products, shoppers are more inclined to reach out for traditional in-store service. Therefore, the support of a retail associate can reduce customer journey friction and address the needs of the customer without forcing them into a dead end.
In a KPMG survey, respondents were asked what factors impacted brand loyalty. Up top was product quality (74%), 66% said value for money and not far behind was customer service (56%) and shopping experience (55%).
How does live commerce fit in?
Delivering memorable customer experiences is driving eCommerce growth especially across high-ticket products. 82% of consumers expect immediate responses relating to sales and marketing questions so placing your retail ambassador at the forefront of one to one and one to many streams can have a massive impact on the customer journey.
5. Adaptable across all sectors
The days of QVC would host new product launches across beauty, fashion and homeware with an older targeted audience. This narrows down on what categories work will in televised shopping. However, due to the sheer scope live streaming can cover thanks to social media and mobile shopping, the opportunities are fruitful.
Research from a McKinsey Report shared categories of live streamers in the following categories:
- Apparel and fashion – 35.6%
- Beauty – 7.6%
- Fresh food – 7.4%
- Consumer electronics – 4.6%
- Furnishing and home décor – 3.6%
- Automobile and local online to offline sales – 0.2%
How it works with live commerce
Influencers and charismatic presenters often drive success behind live streaming events, and it is suited across apparel and beauty products.
However, research from our customers suggests that one to one formats match high-ticket and high consideration sectors such as consumer electronics, furnishing and automobile.
For example, consumer electronic brand, Hughes, have seen conversion rates jump by 20x since using immersive one to one live commerce. That’s double the conversion of their previous one-way video provider.
Systems and Project Director, Henrico Doward, said: “two-way video is giving customers confidence. It allows us to look at products that the customer already has in their home and wants to replace or even when products are installed”.
You can read more about emerging retail technology and its impact on businesses by reading our case studies.