Live Commerce is a trend that emerged in China and has been growing around the world. For agencies and brands, it presents an exciting and lucrative opportunity as well as a structural challenge, as content and production teams have to work closer than ever before with ecommerce, logistics, inventory and distribution teams. So how can brands make the most of this growing space?
First things first, why would you want to get into live commerce in the first place? Since Taobao launched in China in 2016, it’s become a mainstay of the country’s commerce landscape, booming throughout the pandemic, with McKinsey estimating that live commerce has the potential to make up between 10 and 20% of e-commerce globally
by 2026. And while we might leap to comparisons with QVC, this is fizzing on social media platforms with the likes of TikTok and Meta coming forward with offerings.
"It’s clear that live commerce is taking the world by storm and as more marketplaces and apps begin to adopt the trend and capitalise on the opportunity, brands need to think about incorporating a livestream strategy into their sales funnel," says Chloe Cox, social strategy and insights consultant at Wunderman Thompson. "Customers crave human interaction and an immersive experience, which can certainly be achieved through livestreaming and live commerce with the right content, the right products and the right people, providing there is an authentic message and connection back to a brand. If brands don’t join the movement, they may risk being left behind – so think about how you can incorporate live commerce into your wider social media, content and overall commerce strategy."
Look to China but Be Mindful of Cultural Differences
With all that in mind, the first thing to do is to look to China. As alluded to above, Live Commerce may be a relatively new beast in the West but agencies and brands in China have already had a good six years to get their head round the opportunity, innovate best practices and develop case studies. While it’s unlikely that what worked in China will - in all cases - be directly transferable to other markets, it’s definitely worth catching up with your colleagues and contacts in the Middle Kingdom.
Debbie Ellison is global chief digital officer for VMLY&R Commerce and she says that there is plenty of inspiration to be found in China’s live shopping success.
“We’ve got to look to China for the biggest successes as that’s where live commerce is most mature,” she says. “In a 2020 survey, two-thirds of Chinese consumers said they had bought products via livestream in the past year. The value of China’s live commerce market grew at a compound annual growth rate (CAGR) of more than 280 percent between 2017 and 2020, to reach an estimated $171 billion in 2020. This growth spurt has been intensified by the COVID-19 pandemic, and Chinese sales are expected to reach $423 billion by 2022. Alibaba’s Taobao is China’s biggest live-commerce platform and Li Jiaqi is the top livestream salesman - known as the 'lipstick brother', he sold $1.9 billion in goods on the first day of Alibaba’s annual shopping festival.”
But while it might be tempting to just cut and paste what has worked in China and assume it will work in Italy or Mexico or Norway, Taylor Siegel, global commerce strategy and partnerships at MRM Commerce, cautions that a more balanced approach is warranted.
“China has paved the way, illuminating live shopping as an untapped potential channel to drive unprecedented revenue. They are set to hit almost $300 Billion in live shopping sales in 2022! Though live shopping has already taken off in China, it’s still relatively new in other markets,” she says. “The US and Europe can look to Asia for inspiration but should remember that their audiences, social networks and commerce journeys are different. That’s why it’s so important to test, learn and repeat. Businesses should build relationships with creators, try various platforms, experiment with different types of content to understand what works best for their specific brands and customers to drive results.”
Adrian Whitehouse, VP solutions EMEA at MediaMonks, also advises looking at what is happening inside and outside of China. The Alibaba-owned Taobao has, he argues, expertly woven aspects of gamification into its live shopping experiences while Western platforms are still getting to grips with the levers and levels of possible interactivity.
“Live commerce in the Chinese market is huge. Live commerce in North America and Europe seems to have been less successful, but the investment outside of China is much less (so far),” he says. “Brands should research existing forays into live commerce, whether that’s looking at TaoBao, Amazon, or looking at brands that have tried to build their own live commerce experiences (e.g. Tommy Hilfiger) and see what’s right for their products and services.”
How to Take a First Step
“Test, learn, repeat!” urges Taylor Siegel. The thought of getting into live shopping might seem overwhelming, but Taylor says that brands that are completely new to the live commerce space can keep things small and contained by focussing on a single event rather than trying to develop a comprehensive, long term strategy.
“As a starting point, first try a live event for a holiday or big shopping event, showcasing minimal products and using an influencer to entice a larger audience,” she says. “Keep lives short and sweet (around 25-30 minutes). Shoot in a location that’s quiet and leverage a production team to ensure clear and audible video throughout the event. Paid media is also important to promote the event to your target audience. After the event, brands should deep dive into insights and feedback to tweak and update for the following event. By being experimental and early adopters of live commerce, US & European brands have the opportunity to be leaders in this category."
Debbie Ellison recommends that before investing in a costly, bespoke live shopping platform of your own, start by reviewing any existing data you have on live streamed events generally and think about carrying out tests and trials with existing off-the-shelf products: “If you’ve done any live streaming before, review the data and extract any insights you can. For example, what talent has worked best in the live format? Which topics of conversation gained the most interaction? Days and times in the week that worked best in terms of engagement? Drop off points that might hint to where audiences lost interest.”
She recommends: “Once those insights are available, begin by adopting a test-and-learn approach, using an off-the-shelf tool and a key moment that’s relevant to your audience where your brand has some clear authority and authenticity. Building a fully customised technology can get costly, especially when considering desktop, iOS and Android compatibility (apparently $180-300K). Tools like Lisa and Bambuser provide seamless integration across e-com, apps and social that will allow you to track sales, conversion rates and engagements across multiple platforms.”
Understand Your Audience
As with any new channel, the first thing to really get to grips with is your audience. Why might live commerce be useful to them? What’s likely to turn them off? Where are they likely to be?
“Your shoppers won’t be a homogenous group of people,” says Debbie. “Get to know your cohorts, their cultural influences, the moments that matter to them and how your brand and products play a role in their lives. Feature products and bundles that are limited editions or exclusives to build the hype – think of live commerce as a completely new creative commerce channel that needs differentiation in the eyes of your audience and then ensure you use paid media to target the right people. Debbie points to a live commerce project that skincare brand Kiehl’s did for Ramadan. They carefully created an execution that held appeal to to both Ramadan observers and non-observers. Through a series of 'open house' Instagram Live events featuring Kiehl’s beauty advisors, the brand managed an 8x return on investment.”
Choose Your Influencers Wisely
As much as platforms and tools and clever bits of behavioural design can improve the effectiveness of a live commerce project, the heart of what drives them is the human connection. And that’s as true for live shopping as it is for teleshopping or even in-store retail. However, contemporary influencers, with their parasocial relationships and their communities, can really scale up that human touch to connect with thousands of people at once.
Chloe Cox, social strategy and insights consultant at Wunderman Thompson, says that a yearning for connection is particularly potent after two years of pandemic living: “Live commerce is bringing back that personal and authentic touch to shopping that consumers typically missed throughout the pandemic. Some may argue that it’s a ‘new and improved’ version of teleshopping. In reality it’s bringing the in-person shopping element back to the consumer in their own home, providing ease and convenience in their shopping journey and giving them what they want, when they want and how they want.”
However, the ability to perform well live and over extended periods of time is not a given with all influencers, content creators, or salespeople. Being able to work with the camera and connect through it is a talent in itself, something that MRM’s Taylor Siegel discovered while working on Instagram live streaming content at Bloomingdale’s. “Being the top influencer, creator or store associate does not mean you will be good on camera,” she says.
Because connection is key, it might also be worth delving deeper into the world of micro-influencers, who can connect with audiences according to both shared interests and shared attitudes. “There are no guaranteed formulas of what works and what doesn’t when it comes to audiences, especially younger audiences like Gen Z. Consider engaging micro-influencers that can be matched to the specific interests of the cohorts you’re targeting,” suggests Debbie Ellison. And while this is a trend that has been largely focused on Gen Z so far, we may well see it broaden out to different kinds of audiences and influencers. “[Live shopping is] A new way for audiences to interact with their favourite celebs, influencers and brands,” she says.
“The experience feels more exclusive, intimate, and spontaneous,” continues Debbie. “It creates real time feedback where viewers have the chance to get their comments acknowledged and can influence what the broadcaster says or does. When applied to live commerce, products can feel more exclusive, and the exposure to other shoppers interacting in the feed can increase the hype. We do see a skew to youth because Gen Z are more active and available on social; embrace new features and trends more readily, and have a higher propensity to use social for shopping. However, like many Gen Z-driven trends, we’ll see live shopping becoming much more mainstream as creative commerce experiences are embraced by a wider range of brands and influencers.”
Keep it Real
The tension between creating an aspirational image and connecting with people in a relatable manner has long been a tension in the influencer marketing space. Our experts emphasise the need to keep things real and authentic when it comes to production.
“Consumers' behaviours have shifted in the last few years, accelerated by the pandemic. These new consumers are moved by experiences, engaged by two-way dialogue, and inspired through raw and authentic content,” says Taylor. “Live commerce is an organic next step for how consumers are already shopping, especially for Gen Z, who have been engaged in live shopping events for some time. It combines the ease of online shopping with the in-store experience to create shoppable entertainment at consumers' fingertips. Who wouldn’t love that? From a brand perspective, this type of selling allows brands to further connect, educate and sell products to their consumers in an un-filtered, un-photoshopped environment.”
Debbie underlines the three key values of ‘trust, authenticity, and relatability'. “Live shopping or ‘shopstreaming’ as we prefer to refer to it as, is the antithesis of overly produced and airbrushed creative, carefully crafted eCommerce shots, and size 0 models. Users can see products in real-time to make more educated decisions in a relatable context. When live shopping is curated by micro-influencers or creators who can tap into the minds of communities on an attitudinal level, users can experience products and inventory authentically.”
Timing Is Everything
So when is the best time to drop your live streams? As with most strategic decisions, that’s going to depend on your audience. However, in the home of live commerce, China, things really took off when brands clustered their efforts around big events.
“The narrative around live commerce mostly stems from the success in the Chinese market, with people pointing to the huge revenue spikes around key events like Singles Day,” says Adrian.
And while that can help you ride on a wave of collective momentum, it can be a double-edged sword. Debbie explains that focusing on more targeted events that resonate with your audience, rather than massive mainstream events may be an approach to consider. “Tying in with big events can certainly help focus efforts and generate hype. But do be mindful of events like Black Friday and Double 11, where media becomes expensive, and many brands compete for attention at the same time,” says Debbie. “To capitalise on an event like this, you need significant media budgets and considerable advertising support. However, if done right, livestreaming can be a great way of getting PR and cutting through during seasonal events. For example, Burberry used Twitch to stream their 2021 Spring/Summer show for London Fashion Week, achieving a platform-first and tapping into a younger audience of gamers.”
Although, tying into live commerce events is not the only approach to timing - Taylor recommends balancing that out with a more regular drumbeat, even attempting to use your own time slot. "The right answer here is both. Brands should experiment with owning a regular time, after looking at metrics and conducting tests to understand what works best for their audience. They should also host big one-off events tied to drops, major sale events, and holidays that drives sales due to urgency and exclusivity.”
And, as Debbie points out, a regular schedule can play well with platforms’ algorithms and can help maximise your organic non-paid reach. “For Live Shopping within a social platform, a regular cadence can help the algorithm ‘learn’ and improve organic discoverability.”
From Twitch to Facebook to TikTok, there’s a wealth of platforms coming up with live commerce offerings, not to mention ecommerce platforms and tools moving into the space. So how do brands figure out where to set out their stall?
“As with any new concept, brands should be thinking about what platform is right for them, before considering who to partner with,” says Chloe. “Where is their target market? What do they want? And how can they execute. By answering these questions, a brand can select a suitable platform and thus partner to engage with, deliver content and align their strategy with the overall business goals.”
Speaking to the experts, it seems that there’s a lot of excitement around TikTok, Instagram and Amazon Live. Adrian points out that Amazon has been making use of its own streaming platform Twitch and has been seeking to connect up its commerce platforms with content. “At the start of the pandemic, Amazon has mixed commerce and content with its “Twitch Sells Out” event for Prime Day, enlisting influencers and content creators in the gaming space to showcase items on sale that are relevant to the content they typically put out - for example, listing their streaming setup, gaming equipment or merchandise for a favourite game franchise," explains Adrian. “More than just a one-off event, Amazon employees live stream commerce on its Amazon Live platform, where brands and influencers broadcast content with shoppable listings underneath.”
“Instagram and TikTok are leading the way,” says Debbie, who points out that in the US social ecommerce shoppers grew 25% to 80 million people from 2019 to 2020 and that this figure is set to exceed 100 million by 2023. Social platforms are the key to making live stick: “#TikTokMadeMeBuyIt, where users post what they've bought thanks to recommendations about products on the site, has been used 8.1bn times to date.”
Chloe Cox argues that the gap between the pioneering Chinese brands platforms like Taobao and Western live commerce players is starting to shrink as they realise the potential. “Whilst China has been at the forefront of live commerce for a while now, Western social media networks are starting to catch up. Western brands are watching, learning, and adapting to this highly interactive channel, taking stock from retailers in the East as masters of the livestream trade. Take TikTok and Shopify’s collaboration to creative shoppable video adverts, and Instagram’s Reel feature that integrates shopping functions – albeit limited to geographies with native checkout,” she says. “There are also new and innovative technologies on social media platforms that enable all brands to get a slice of the pie, with Amazon launching its own service ‘Amazon Live’, where a range of demonstrations for products can be watched and interacted with.”
However, some brands are taking a somewhat different approach, hoping that by using third party tools, they can build their own platforms and keep control of first party data that they can harvest. “Other third-party platforms and tools are popping up that allow brands and businesses to go live on their own website with a simple plug in,” says Taylor. “Bambuser, Lisa, and Buywith are some examples brands are using to drive and keep consumers on their site and gather first-party data. Brands using this type of strategy include Clarins, Farfetch, LVMH, and Nordstrom among many others.”
Live Commerce is Just One Part of a Journey
At the end of the day, for brands one of the key draws of live commerce is its purported conversion rates. But if brands really want to maximise that, they need to consider where live commerce sits within the customer journey - and make the path to purchase as smooth as possible.
Debbie has some practical advice on this front: “Connect the product catalogue correctly. Ensure your inventory volume is accurate to minimise friction and maintain a seamless user experience. This will also improve discoverability of related inventory. Finding the platform where your core audience spends time most will also help prioritise effort,” she says. “Consider the entire path to purchase and stitch together platforms that make the journey frictionless, even if users click out or land on different properties. Test the complete customer experience (CX) from the perspective of all your audiences and make sure there are no dead ends or barriers to purchase.”
What that also means for agencies (and brands that have in-house content capabilities) is bringing together content production teams and CX experts with business distribution, inventory and logistics operations like never before. “Brands have a tendency to look at these areas in silos, but that isn’t the reality of how people shop anymore,” says Taylor. “Brands need to think about the total consumer experience across the shopping journey. Content, commerce, user and design experience... even behavioural sciences are, and should be, connected. We created an experiences and business transformation organisation specifically to bring together UX, CX, commerce and behavioural sciences. It’s at the intersection of these skill sets where you make progress on these innovative commerce areas, with the understanding of how people think, shop, feel and buy.”
Ultimately, you need to understand where live commerce fits in with your wider digital presence. “Don’t see this as a standalone part of your digital strategy,” says Adrian. “As with everything, live commerce should be one of the pillars that contributes to your overall business growth. Born in this new era with a digital DNA, I’m proud to say that at Media.Monks we help brands move into the market's whitespace, and show up in a meaningful way - including live commerce.”
Cutting Through the Noise
There’s no point investing all this effort into live commerce if you’re not going to be seen by anyone. Cut-through is crucial. The good news is that there’s hardly a playbook to rip up and there is lots of scope to experiment and try innovative ways to grab and keep attention.
“Make sure that you properly understand how you 'cut through the noise' to make sure your brand and product get airtime,” says Adrian, reeling off questions to ask yourself: “Are you relying on your brand’s mental availability or fame? Do you have to pay or buy your way in? Is it about having a particular type of product, discount structure, or the ability to bundle with particular partner brands? If you get airtime, how do you make sure your brand stands out to shoppers? Who’s presenting your brand? What’s the narrative around your appearance? Have you briefed whoever is presenting with the key points you’d like make?”
Additionally, Taylor says that paid media is an absolute necessity for live commerce, something she discovered during her time as senior social media lead at Bloomingdale’s. “The most important lesson I learned was that paid media is a must, before and after to drive additional eyes and sales.”
Streaming into the Future
Outside of China, live shopping is still in its infancy. With no hard rules and with best practices still evolving alongside the current rise of other developments such as the metaverse and NFTs, it’s a channel with the potential to create all sorts of exciting, immersive experiences.
In the near future, says Debbie, there’s no doubt that platforms will continue to improve their features and do more to connect influencers with brand opportunities. “Social platforms will continue to invest in feature development and promotion of live commerce. We’ll see more brands trying to enter the space, investing in collaborations and influencer partnerships to do so and some brands like Nordstrom will establish permanent live shopping channels,” says Debbie. “Live commerce will be matched with evolving behaviours, led by Gen Z, that will see mainstream adoption of live commerce. Given the number of influencers creating their own content, reviewing products in real time, I’d also like to see platforms provide comprehensive functionality for creators to link their content to commerce opportunities to help them connect their followers to purchase directly.”
MRM Commerce's Taylor is particularly excited about the potential for mixed reality and the metaverse to supercharge the live shopping experience. “VR and AR. This is the next step in the evolution of live commerce,” she says. “Brands and creators have already started experimenting with using AR to sell products using camera lenses on Snapchat, Facebook and Instagram. The digital and physical world will continue to merge. Eventually, live shopping will be hosted by digital avatars or influencers within the metaverse. Consumers will be able to come together to watch, interact and buy both digital and real-world products.”
But while it’s easy to get carried away with excitement and possibilities offered by developing new technologies, nothing is guaranteed. However, brands would be advised to keep a close eye, do their research and get hands-on.
“The future of live streaming and shopping depends on whether Western shoppers are ready to adopt Eastern retail practices,” says Chloe. “However, with platforms already dabbling in this industry and campaigns performing well, my advice would be to watch this space, be ready for the next commerce phenomenon and don’t get left behind.”
Photo by George Milton from Pexels