Live commerce incorporates live video content where the host demonstrates the product to the live viewers over a social network or an e-commerce platform. It is a two-way communication that lets shoppers buy the product seamlessly during live streaming. In other words, live commerce has a built-in commerce capability that allows consumers to understand and buy the product while watching the live stream. This e-commerce shopping channel first came to the fore in 2016 when Chinese e-commerce giant Alibaba’s Taobao linked up the online live stream broadcast with the e-commerce store to allow consumers to watch the product and shop for it simultaneously.
While live commerce has taken the Chinese e-commerce market by storm since its inception, it has also become a significant sales channel for online companies in the United States. According to a study by McKinsey, live streaming commerce in China has reached a penetration level of 10 percent in around five years. According to the same report, sales in China through live streaming commerce are expected to reach USD 423 billion by 2022, showing the channel’s soaring popularity. Another report by Coresight Research said live streaming shopping in the US market is expected to reach USD 25 billion by 2023.
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Beauty and fashion retailers have taken to live streaming commerce significantly. While German beauty retailer Douglas relies heavily on this channel, streaming various shows in different content formats, fashion brand Tommy Hilfiger has been doing live streaming in Europe and North America, following its successful stint with the technology in China. Moreover, the world’s biggest retailer, Walmart, has been experimenting with the live shopping feature for over a year. It first tested the waters on the social media platform TikTok, followed by YouTube. Finally, the retailer debuted on Twitter’s live stream shopping initiative kicking off its Cyber Deal live event last year.
Let us discuss the top advantages of live commerce that have led to so many global brands making it a go-to digital marketing strategy to reach out to new customers.
Interactive Shopping Environment
The ability of live commerce to showcase the products closely from all angles while describing the goods in detail to the viewers is a strong advantage of this medium. But brands should ensure that their live commerce sessions are engaging and promote two-way communication, making it more interactive and impactful for the audience. One of the biggest strengths of this medium is that it enables shoppers to ask the host anything about the product and get their queries answered in real-time. Therefore, the role of the host also becomes significant, as they need to know the product inside out to answer the consumer’s queries satisfactorily.
Quick Sales
With live commerce campaigns, brands can quickly generate massive sales during the duration of the live stream. First, however, they have to ensure that they are targeting the right audiences and that the presenter, ideally an influencer or someone with a deep understanding of the niche, is at the helm of the proceedings. For example, in 2019, American reality TV star, Kim Kardashian, sold out the entire stock of her newly launched KKW perfumes in China in just a few minutes during the live stream commerce with the help of Chinese mega influencer Viya Huang, who commands a massive following of more than 70 million.
Fewer Returns
One of the problems that plague the e-commerce industry worldwide is the rate of high product returns; most of the time, the consumers purchase the products with certain expectations in mind that the actual product is unable to meet. But with live commerce, the consumer gets all the details like how the product looks, its top features, directions for use, and any other query they might have about the item, making it less susceptible to returns as the user now has clear expectations.
First-Party Data
As third-party cookie tracking nears its end, brands will have to depend a lot on the first-party data to reach out to customers in the future. Unfortunately, as we stand today, most brands have not worked seriously to build their first-party customer data set as they were too dependent on third-party cookie tracking. A live commerce campaign allows brands to strengthen their primary data and reduce dependency on third-party data, enabling them to design better retargeting campaigns to scale the business in the future.
Although live commerce is growing by leaps and bounds in China and other Asian countries, other parts of the world have started to warm up to this idea. Some companies are doing exceedingly well to milk this concept and get ahead of the competition, while others weigh in on the pros and cons of the medium and take a slightly conservative approach. But as we move forward, many marketers believe that live commerce will be a sustainable sales channel that will grow at a breakneck pace in the coming time.
