Hundreds of millions of people love livestreaming eCommerce, and it is becoming an increasingly important marketing tactic for brands in North America and Europe.
Livestreaming has the potential to transform eCommerce by combining the direct-to-consumer trifecta of online shopping, social media, and influencers. Here is what DTC brands need to know about the trend and how to leverage it.
What Is Livestreaming eCommerce?
Think QVC, but for the internet. Livestreaming combines “streaming video, social media and celebrity into a shopping experience that has the potential to further disrupt an already-battered retail industry,” writes Bloomberg’s Olga Kharif and Matthew Townsend.
It is a form of live, online selling that lets anyone (from influencers to global brands) reach customers directly on a social network or eCommerce platform.
“Another way to think about it is imagine if Instagram was where you made a lot of your discretionary purchases from live video appearances by people you follow, like buying Cardi B’s purse,” they write. “Or instead of just liking a picture of a fashionista in a cute dress, she’s selling it directly to you.”
The Popularity of Livestreaming in China
Streaming is a core part of both of China’s biggest eCommerce websites, Traci Ruether at streaming platform Wowza writes. This includes Taobao, the world’s biggest online store and the eighth-most visited site globally, and JD.com.
“Successful influencers on the platforms ascend to celebrity-like status, helping elevate the shopping experience from mundane to swanky,” Ruether writes. “And just like at a Nordstrom beauty counter, consumers can ask questions and learn application techniques.”
Influencers run the show both physically and metaphorically. They appear each night for up to four hours at a time, explains Michelle Greenwald, CEO at innovation hub Catalyzing Innovation. They present about 12 items each hour and inventory can go in seconds. Brands pitch influencers a range of products, with only one out of every 10 is selected. Influencers are also trying to get the lowest possible price.
Livestreaming is particularly popular on Singles Day and other annual shopping holidays, write Christian Cohrs and Scott Peterson at OMR. Alibaba reported over EUR 63.77 billion ($76.4 billion) in revenue from its most recent Singles Day, with every one of the platform’s 28 livestream channels generating at least $15 million.
Livestream shopping’s popularity shows no signs of slowing down, either. Research by KPMG and Alibaba’s Research unit AliResearch predicts the country’s livestreaming eCommerce market will be worth $305 billion in 2021.
What Does Livestreaming eCommerce Currently Look Like in the U.S.?
Though not yet as widespread in North America and Europe, livestreaming has become a core aspect of some eCommerce brands’ strategies.
Amazon Live featured heavily on Prime Day in 2020. “During the Prime Day event, Amazon announced Prime Exclusive Deals to its network of influencers, allowing them to create live video content around featured products,” explains Kiri Masters, Founder of Bobsled Marketing. “This created an engaging experience for shoppers who could explore video content that featured great discounts.
Facebook and Instagram
Facebook and Instagram offer some form of live shopping feature, writes Luigi Matrone, Founder and CEO at eBusiness Institute. Facebook is testing a feature on Marketplace that lets sellers demonstrate products to potential buyers. Instagram users can livestream using Instagram Live. It is also trialing the Checkout feature, which allows users to make purchases without leaving the app.
Livestreaming is helping AliExpress compete against Amazon in Europe, writes Jan Dominik Gunkel, Global Commercial Head at factor-a. “With the live shopping channel, brands can show the AliExpress shoppers their products in a live video feed,” he says. “At the same time, they can offer promotions. Watchers can ask questions. This can be very dynamic and individual.”
Why Is Livestreaming eCommerce So Popular?
- People are spending more time online than ever before and part of that time is spent watching videos.
- People want shopping to be as easy as possible, and livestreaming achieves that.
- Personalization is essential in retail, and livestreaming allows for that.
Livestreaming also offers several key benefits to eCommerce brands: customer support, relationship-building, and a sense of exclusivity.
1. Live Streaming Provides Additional Customer Support
Livestreaming eCommerce allows brands to provide real-time customer service, according to the team at chat platform SendBird. Viewers can ask questions and get immediate responses from hosts. In many ways it mirrors the in-store experience of speaking to a shopping assistant.
2. Live Streaming Builds Connections With Customers
Livestreaming eCommerce is a powerful way to build intimate connections with customers, says Katie Fawkes, Director of Marketing at video production & streaming tool Ecamm. “Depending on the business’s branding, it can leverage livestreaming for selling products — a livestream flash sale, for example — sharing behind-the-scenes content, [such as] how a product is made, what the vibe is in the office, or among different team members, or even thought leadership.”
“A shoe eCommerce business, for example, could do a weekly live show sharing about their ethical sourcing methods and how that’s having an impact in the world,” Fawkes explains.
3. Live Streaming Creates a Sense of Scarcity
The illusion of scarcity is the feature Sorin Patilinet, Global Marketing Insights Director at Mars, admires most about livestreaming eCommerce. Customers believe there is only a limited amount of time to buy products at that price, so conversions soar.
Live stream shopping also gives brands the chance to leverage the benefit of flash sales. “The dropping culture, made famous by sneaker companies, could be embraced by every other company now: from designer chocolate bars to cars,” he writes.
Case Study: How Betabrand Built a Thriving Business Around Livestreams
California-based clothing company Betabrand recognized the potential for livestreaming early on. The company has built up a significant audience and customer base with its Monday-Friday live shows.
Twice a day Betabrand’s livestream showcases new products and shows viewers how to style best-selling items like denim yoga pants or dresses. Attendees are encouraged to interact, too. They can comment or post emojis in real time with the stream.
Betabrand CEO Chris Lindland says this allows the audience to guide the stream. “When we organize our shows the hosts ask questions to try to provoke participation from anyone who’s demonstrably into it,” he says.
“That’s a big deal. Then as you gain more and more of an audience of people who’ve had that moment, they understand that it’s real. A big piece of this is that it’s like a ‘Choose your own shopping adventure.’”
4 Tips to Make the Most of Livestreams
The good news for U.S. brands looking to execute a livestreaming campaign is that Chinese brands have already created a blueprint. These four tips will get any brand off to the best start possible.
Work With Influencers
Brands must recognize livestreaming’s popularity in China is a result of influencers, says Econsultancy’s Nikki Gilliland. They generate interest and sell products, not the brands. “Chinese influencer, Viya, for example, sold out 15,000 bottles of Kim Kardashian’s KKW fragrance in under a minute during a livestream in November 2019,” she writes. “Success stories like this drive brand investment in livestreaming, with influencers now in the position to demand huge fees.”
At the moment, though, it’s only the top influencers who command those huge fees, says Dan Wallace-Brewster, Scalefast Senior Vice President of Marketing. This has created a wide-open playing field for every other influencer.
“Content creators are welcoming the opportunity to bring their communities into a store for a live shopping event,” Wallace-Brewster says. “It’s a win-win for the brand who can curate the product that will be featured and for the influencer, who builds audience engagement and earns a commission on sales from the event.”
Put the Product Front and Center
The product must take center stage in livestreams. Feifei Liu, a User Experience Specialist at Nielsen Norman Group, says “livestream sessions show users what products look like, how to use and style them, and even how they’re made.”
This is something brands have been doing for a long time, just not always in a formal, organized fashion. Wallace-Brewster points out how brick-and-mortar shop associates have used tools like FaceTime to offer their best clients an early look at new arrivals and products that have yet to hit the shelf.
eCommerce has turned those early looks into product drops. “Now, instead of putting the products aside, the customer can complete the transaction online,” he says.
Find the Perfect Format
Solid preparation is a must, says Eric Siu, CEO at content intelligence platform ClickFlow. “There’s nowhere to hide and no retakes when the camera starts rolling, which is why professional streamers will spend hours planning each show.”
Longer streams tend to perform better than shorter ones, he adds. It can also help to involve the audience. In Adidas’ first livestream, for instance, an artist worked by taking viewer requests.
No single format works for everyone. Adam Keesling, a strategic finance consultant, notes the nature of livestreams will change depending on who the host is and what they are selling. Tutorials are common for make-up products and apparel is usually tried on.
Some hosts use humor, others overreact, he adds. Still more take on a talk show host’s role, creating a story about the product based on their own experiences.
Upgrade the Infrastructure
Brands that want to take advantage of this trend will need to update their network capabilities, advises marketing consultant Tushar Sonal. “Live streaming invariably requires high quality of streaming as well as low buffering rates. Good video quality must ensure that it is adaptable for viewing on mobile devices as well in weak network areas.”
A content delivery network can help manage increases in data transfer, Sonal writes. Rather than rely on a single server, a CDN uses a network of distributed servers and data centers across the world to enable the rapid transfer of content, regardless of the user’s location.