Live Commerce is here. Is your company ready to take advantage?
In the past few years, companies and brands have tried to leverage live video streaming to relative success. While most of these companies used live streaming to grow awareness or increase user engagement, not many have been able to monetize off of these efforts.
Recently, a handful of innovative e-commerce companies have started to take steps in utilizing live streaming for more than user engagement but also to boost sales. These companies saw that the engagement and immediacy elements of live streaming could be integrated with online shopping to appeal to millennials, who spend $600 billion annually.
The immediacy that live streaming brings to shopping is immense, because the “live” element brings the viewer a sense of spatial immediacy - where you feel like you are actually there in the moment and not behind a screen. This level of interaction could not only peak the interest of a potential buyer, but it's becoming proven that it can actually push people over the edge to purchase.
What is Live Commerce?
Live commerce, as we briefly mentioned above, is a service that is combining live video streaming with the ability to interact with sellers and to buy immediately, whether that be from selling an actual product during a stream or receiving support from a social community. The benefits of live commerce, compared to traditional shopping channels and e-commerce, continue to be proven with use-cases around the world. For example, AliExpress, an Alibaba subsidiary, launched a live commerce service called ‘AliExpress LIVE’, which saw as many as 320,000 goods being added to the cart per one million views during a single live streaming session. These incredible conversions are the reasons many companies are flocking towards live commerce.
Who is Using Live Commerce?
In the past year, there have been a number of companies making a case for the legitimacy of live commerce. Companies like TMON, a major e-commerce player in Asia, launched a live commerce service called TVON Live in September 2017 and saw tremendous results. In the company’s early trials of live commerce, TMON saw a 21% conversion rate and 130x more revenue for a single live commerce session.
The TVON Live service, like many other companies leveraging live streaming, use influencers, celebrities and famous bloggers to showcase products and interact with the viewers, but, with their platform, viewers could purchase products on the spot with a press of a button while never leaving the stream.
Live commerce for retail
There are also use-cases like Kohl’s, a department store retailer, who interestingly was one of the first companies to use live streaming to broadcast and sell products through live commerce. During New York Fashion Week in 2015, Kohl’s and Lauren Conrad (a TV personality and fashion designer) streamed a live view of the LC Lauren Conrad Runway on Periscope, where viewers could see the clothing worn by models on the catwalk and instantly purchase the items they were looking at through Kohl’s dedicated portal.
This early attempt was a huge step in understanding the capabilities of live commerce and uncovering areas where companies could optimize.
Live commerce for lifestyle brands
LG Fashion (LF), one of Korea’s largest lifestyle brands, was also an early adopter in live commerce as a strategy to combat their recent stagnation in sales. LF proactively strengthen their online presence, e-commerce in particular, to see a 30% year over year sales increase since 2015.
One of LF’s concerted online efforts was launching LFON - a live commerce service that leverages two-way communication with consumers to build interactions, grow engagement and ultimately get amazing purchase conversions. LFON users could watch a host’s live stream and have real-time conversations with the presenter and other users while also being able to one-click purchase products the host was selling.
Unlike Kohl’s live commerce event, LF leveraged chat to create an atmosphere of “live interaction” and add another layer to live commerce. While live video streaming provides the element of being in the moment, chat builds the connection between host and viewer but also engagement between other viewers.
Live-commerce brings human interaction back to e-commerce
Another great aspect of live commerce was the added ability of real-time customer service. TMON’s use-case showed the world that live commerce could be the next platform, moving on from social media, to provide a new customer service experience. On TVON Live, viewers could ask questions and get answers through real-time chatting without having to go through the customer service ticketing system that we have all dreadfully experienced. In a way, live commerce customer service was a callback to the days where we actually talk to real people when we bought things. During a live stream, the viewer could communicate with the host but also get all of their questions answered by a staff member.
With live broadcast, user could easily access information and also see product test that would be hard to try at home plus asking for live requests that the host could try on the spot. This amount of information sharing and gathering could provide a huge boost in converting viewers to customers.
Challenges with live commerce
Even though live commerce clearly looks like an enticing option for online retailers, there are also possible challenges companies should take into account. Because of the unpredictability of any live event, whether it be online or TV, there are elements out of the control of the company. These unforeseeable factors, from a product malfunction to host’s going off-script, could deter companies from taking a chance on live commerce.
Also, with the given nature of live streams, the need for a captive audience to be available at the exact time of the streams could present some disadvantages, and if a company doesn’t have a preexisting audience, some pre-event marketing may be necessary when ramping up to a consistent viewership.
Another challenge companies are probably asking themselves are questions of storing live videos, and the possibility of the novelty or worth of the content disappearing when the video isn’t live anymore. Is live commerce too ephemeral? Would archiving live videos still add value?
An e-commerce company with solutions
With many possible roadblocks, companies like Backcountry - an online retailer specializing in outdoor gear and clothing, are answering some of the challenges listed above. In December 2017, Backcountry launched a three day live commerce event featuring companies such as GoPro, Yakima, Black Diamond, The North Face and more. To fight against live commerce’s unpredictability, the retailer had TV-level production value for their live events. As you can see in this video, they have a set, script, planned guests and giveaways all prepared beforehand. Just because it is live streaming, doesn’t mean it needs to be shot from a mobile device.
In terms of the challenges of viewership and marketing, Backcountry cleverly streamed the live event on Facebook but had product giveaways that could only be entered through the site experience. This was a smart way to reach more viewers, but not lose the features of live commerce.
Even in the infant stages of live commerce, Backcountry may have set the bar for market readiness for their preparation, marketing and finally their storing of content. After the event, the company had a dedicated landing page for all of their past videos and within the videos, you could still purchase the products from the live stream.
Are you ready to take the jump?
With any new technology, there will always be positives and negatives a company must considered. Live commerce is a service that requires a lot of planning and preparation, but with the right game plan, product, and traffic, live commerce is a viable service to explore. The service is still in the early stages of development but with time, will continue to develop and innovate. This is an exciting time for live commerce, are you ready to take the jump?