What is Live-streaming and how to integrate live-streaming with your e-commerce business
Live-streaming is video or audio content, but usually both, that broadcasts live through the internet. With an abundance of devoted streaming platforms providing an unlimited selection of channels, live-streaming has created opportunities for any niche or popular community to flourish. Quickly, it is proving to be the natural evolution of outdated media, offering the one thing that people look for most in modern entertainment, personalization. It gives users more options on how, when, and what content they’d like to consume, with the added joy of active participation in a live event that live-streaming provides. Circumventing any of the issues associated with traditional media; with users able to pause indefinitely, pick up watching where they left off, and ultimately have flexibility in even how they consume the content.
There has also been further development in just how active consumers can be, past just commenting and interacting with the live-stream, an increasing trend seen among Gen Z is to be more active of a consumer through also being a creator. This cycle of consumers being smaller streamers, growing their streaming channels is a promising ecosystem looking forward to the coming years. Even more promising seeing that an accepted aspect of the live-streaming experience is being advertised within the content you are watching. Live-streaming is currently going hand in hand with instant purchasing of featured products. It is even encouraged by the audience through participation with the chat function or reaction buttons.
How does live commerce create value?
Live-commerce can help brands, retailers, and marketplaces primarily in two areas:
Accelerating conversion.
Live streaming ecommerce is engaging that keeps viewers watching for longer. It shortens the decision-making process from awareness to action. One-time coupons and other time-limited strategies can be used to create a sense of urgency. Conversion rates are reportedly up to 30%, which is nearly ten times greater than in traditional e-commerce.
Improving brand appeal and differentiation.
Live streaming ecommerce, when done correctly, boosts a brand's appeal and distinctiveness and drives more traffic to the website. It can reinforce the relationship with current clients and attract new ones, particularly young customers who were born in the digital age that are into innovative retail experiences and formats. The proportion of younger audiences at some businesses has increased by as much as 20% after introducing live streaming shopping.
How successful can Live-Commerce be?
Without a doubt, the most successful market and one that companies across the world are looking to emulate is the Chinese live-streaming e-commerce market. Live-commerce success has been so prevalent that it now brings in over 265 million people, almost 30 percent of Chinese Internet users as of March. With two-thirds of Chinese consumers buying products via live-stream in the past year. The market in the West is still behind, with Chinese site Taobao remaining the world’s colossal streaming site, with a market share of 35 percent. Early movers are taking advantage of the clear enormous long-term potential. If China’s experience is any guide, analysis indicates that live-commerce-initiated sales could account for as much as 10 to 20 percent of all e-commerce by 2026.
Following the success in China, the U.S video streaming market is set to be worth $124.6 billion by 2025, and brands are now investing in what looks to be a new giant in media. Many of the first in the fashion and beauty industry. One of the beauty retailers who have done this through streaming sporadically in a range of formats, from tutorials to influencer Q and A’s, was German beauty retailer Douglas, reporting conversion rates of up to 40 percent as a direct result of live-commerce. World-renowned brands such as Tommy Hilfiger see it fit to expand their live-streaming ventures too. Targeting Europe and North America following their immediate success in the Chinese market, wherein just one show they sold over 1,300 hoodies in only two minutes. Affectively, signing people up to be more directly marketed to whilst improving positive brand recognition. All feeding an increasing consumer demand, a recent survey found that even excluding China, almost a quarter of adults globally would be open to discovering new products via live-streaming that featured an influencer or brand representative.
What product can benefit from live streaming?
Beauty
Beauty products benefit from live commerce because they can be purchased immediately impulsively during a live stream. Beauty shoppers often seek new and fresh looks and want to keep up with current trends (and buy them at a lower price!). Live commerce not only shows these trends but gives viewers a push to make a purchase.
Clothing
Live commerce is a great way to stream your fashion shows or just show off your clothes, connecting top fashion influencers directly with potential customers looking at the latest trends online.
Food and Beverage
If your business sells food and beverages, make sure to utilize live commerce capabilities. People will be able to see what you're selling before sending their orders in. This is a great way to convey a consumer’s experience with your product, from the initial unboxing to showing how the product is used.
Children's Toys
Parents love live demonstrations because these types of videos give helpful insight into what they're buying. Seeing the child's reaction to the toy when they see it in action can make parents and children more likely to purchase it instead of just looking at one in a picture.
Jewelry
Jewelry looks best when worn because its features are not always visible in pictures or images. The ability to communicate via live video can give customers the sense that they're trying on the piece of jewelry.
How can you take advantage of this demand?
To set up a live-stream event, companies typically engage a key opinion leader (KOL) or key opinion consumer (KOC) to host and display the product whilst interacting with the audience, encouraging rapid sales. The strengths of live-streaming are best brought out through multiple different formats that work better or worse in co-ordinance with particular marketing plans.
One format is Tutorials. An example of this, being makeup tutorials. Combined with the appropriate model, this format can portray how multiple products work best together, suggesting that buying all or at least multiple is necessary, cross-selling being the bread and butter of this format.
Another format is Interviews, brands now see that ‘friend’ marketed influencers provide more trustworthy and authentic co-signs that help pump in targeted traffic.
Small budget “Behind-the-scenes” videos offering an inside look at the team behind a product or background work can promote any brand image your company saw best fit to stand out. For example, exhibiting why your ethically produced products come at a slightly higher cost. This has proven to help capture socially conscious consumers who otherwise might not have made the expense.
A common thread in successful live-commerce events, through any formatting, is the interactive element. Often through giveaways, rewards, quizzes, all set to encourage engagement whilst providing production values an audience expects.
The future of Live Streaming Ecommerce
The future seems to have a lot to do with how to best make use out of the burgeoning influencer eruption, whether that be macro, micro, or even nano influencers. Big-name influencers and celebrities are expensive to hire and don’t always yield the best results. Using influencers with a smaller but more dedicated base of followers can, at a lower cost, achieve the same desired results. Allowing smaller companies to copy and adapt the methods of major companies previously mentioned. The engagement rates for nano-influencers on Instagram are ten times those for mega and macro-influencers. The goal of using micro-influencers is often to foster a positive connection through association. If you’d like, you can see it as sponsoring streamers, associating them with your brand, and growing cooperatively.
The question, of course, is whether livestream shopping is a pandemic flash-in-the-pan, not unlike Peloton, which is reportedly shutting down production for two months to sell off existing inventory.
It’s not surprising that livestream shopping took off when people couldn’t actually go to a real store, or were doom scrolling social media during shutdown, lockdown, and quarantine times.
But will it have staying power?
It will if big tech has anything to say about it.
Amazon is investing big in Amazon Live. Google has live shopping on YouTube. Pinterest, seemingly a great fit for this kind of venture, announced a livestream shopping project late last year. Twitter, which has put innovation around creators and monetization in overdrive lately, is working on livestream shopping. Facebook is investing, particularly on Instagram. TikTok, with roots in China, is a particularly interesting player to watch here. Tik Tok already has more than a billion monthly global users and says its internal data shows that one in four of them either research a product or make a purchase after watching a TikTok promotion video.