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The Rise of Live Shopping: How Brands Are Leveraging Streaming Services

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Definition of Live Shopping

Types of content tried and tested in 2019 include but are not limited to: Behind the brand, Interactive games, Influencer collaboration, and Live shopping. Unsurprisingly, live shopping gained traction towards the end of the year due to Singles Day. L’Occitane collaborated with the Chinese cosmetics brand Marie Dalgar to promote their Advent Calendar and saw great success in just 15 minutes with 200 units sold. According to Kuaishou, there was a high purchase rate of 20% during the live stream. This success has created an interest in live streaming service for brands that have never tried it before and suggests that it will be a key feature of live streaming in 2020. With a clear 2019 overview of what live shopping is, it is now appropriate to touch on why brands see it as a key tactic in live streaming.

Although Taobao secured the top spot as the most popular platform in the past, Douyin (TikTok) quickly rose in 2019 to become the third most popular platform behind Kuaishou, closely followed by Bilibili. Fast fashion brand Shein started live streaming on the Shein App (obviously), however, complaints from users were that it was not compatible with their device or the app would crash. Spears stated she has learned the hard way that streaming on an app is not a wise move given that the desktop version of your site is obsolete. Additional steps were taken for high-quality content production, in particular with beauty brand L’Occitane with the aid of third-party broadcasting tools. This includes apps such as Xsplit and StreamLabs to take advantage of the Multi Window and Browser source feature for a more visually appealing stream.

Live shopping is a new form of online e-commerce shopping using various live stream platforms, and it is gaining popularity rapidly. Brands have discovered that live streaming service is an innovative way to engage consumers, and live shopping has become the secret weapon for brands to win over increasingly fickle consumers. The recent 618 Mid-Year Shopping Festival is a case in point. Not only did brands collaborate with an array of KOLs to tap into their expansive fanbase to increase brand reach more effectively, but some brands also stepped into live streaming for the first time to invigorate sales. Live streaming saw many changes in 2019 regarding platform popularity, the launch of new features, and types of content. There seems to be a push towards creating interactive, high-quality content when it comes to live streaming.

Importance of Live Shopping for Brands

Millennial consumers of lifestyle goods reflect a strong demand for live shopping. For example, in China – the world’s largest online shopping market – brands already are starting to increase engagement activities directly into the sales process on digital networking platforms, capitalizing on a new genre of “entertainment marketing” to forge interactive and immersive purchasing experiences. Here, the goal is to recreate in the digital world key elements of the traditional shopping experience such as browsing, in-depth product engagement and testing, and personalized advice and support. The potential payoffs from this “Live shopping” will be rich and varied. If done right, it creates entirely new online sales conversion funnels, opportunities to form deeper and more loyal customer relationships, and valuable real-time feedback on products and consumers – including their likes and dislikes. This can help to boost brand stickiness, competitiveness of small or niche brands, and innovation in product designs. In today’s environment of decreased retail foot traffic and more cautious consumer spending due to economic uncertainty and COVID-19, the ability to connect more intimately with consumers in digital sales channels has become a high priority for many brands, making Live shopping a highly relevant activity.

The Impact of Streaming Services on Live Shopping

Now more than ever, people are in need of new and interesting content to consume while isolated at home. There is an abundance of products that can be leveraged within a live shopping environment. These range from simple and entertaining products to more expensive tech and lifestyle products. The variety of products available for live shopping can offer an array of content to keep consumers engaged within a streaming platform. This is particularly attractive for lower-tiered platforms that are seeking means to increase viewership and conversion to higher subscription tiers. Live shopping has the potential to be the ultimate point-of-sale conversion tool for platforms, as it can be directly tied to conversion metrics for products and attributed to an increase in subscriptions influenced by purchased products.

Streaming services are a growing concept. With the influence of Netflix and YouTube, the idea of consuming media via streaming is more popular than ever. In recent times, China has an estimated 500 million users every month that are spending 50 billion minutes consuming media via paid streaming services. Given the expected growth in media consumption in the region, there is a clear opportunity to ride the wave of China’s interest in streaming services. Live shopping is one of the up-and-coming methods to engage and convert consumers at the point of sale. Imagine live television shopping channels, and combine it with a content creator showcasing and demonstrating products, and you have live shopping. With the ability to effectively shift product and no cost to the consumer, what’s not to love? Streaming services should definitely consider the potential benefits of integrating live shopping into their platforms.

Rise of Streaming Services

Live streaming has risen from a popular pastime to a vital form of communication and entertainment. These days, it’s hard to believe that Twitch has only been around for a little over a decade. These days, it feels like live broadcasting has always been not only a thing, but an influential thing. Users can go live on Facebook and Instagram, and even YouTube – that Bizarro World where a new format or medium is discarded in favor of one that doesn’t do anything the old one couldn’t, and does several things it can’t worse – has invested a lot in live content and wants us to call these series of changes overhauling their approach “YouTube Now.” Live shopping has appeared to follow suit in other markets, where brands and retailers are now leveraging these streaming platforms for an alternative method of content delivery, one that differs from traditional shows and home shopping network solutions and entering the new age by persuading salespeople into customers’ homes. With Twitch and game streaming as the prototypical example, live shopping to this point has been largely confined to specific platforms and websites. Now we are seeing a shift towards using streaming platforms as the new venue for live shopping. Streaming services have seen a rise as the new starting block for retail therapy, and the sales pitch will be delivered to a customer using the live shopping services on the streaming platform.

Integration of Live Shopping with Streaming Platforms

Throughout the event, a post containing video will show up in user’s feeds. This will entice viewers to join the stream and upon finishing, the post will still be visible and available, contrary to past sessions which do not leave a trace.

A live shopping stream involves broadcasting a real-time event of hosts presenting products, similar to those seen in the home shopping channels. This allows for immediate interaction with viewers via a chat and better product promotion. An interactive live shopping event involves playing games or contests with a purpose of promoting products to win prizes, for instance. This method is the most effective for promotion of products.

There are different ways a live shopping event is conducted on a streaming platform. They can be divided into basic pre-recorded, live and interactive live. A basic pre-recorded shopping event involves live streaming of an infomercial of products. Although this is nothing new, as seen before in televised home shopping, it is the most basic form of the merging live streaming and shopping. This method is lacking in appeal due to the lack of interaction with viewers.

In the recent years, there has been a growing trend in live streaming. Today, live streams are a part of different servers and are not limited to live streaming platforms. This change in trend led to live shopping being combined with them. In the current context, live streams are held on the servers of brands. The stream is then mirrored to a live streaming platform which is shared in posts by the brand. Viewers of the post are then directed to the stream in the live streaming platform.

Benefits of Live Shopping on Streaming Services

There are several benefits that live shopping can provide to the streaming services that host them. Streaming service providers have always sought new ways to add value to their service. By adding live shopping, a highly entertaining and highly interactive experience, they succeed in adding a new layer of interactivity to their platform. With this increased interactivity comes increased engagement, as seen with data from Chinese streaming giant, Taobao Live. During a live shopping event, viewers can interact with the host and other viewers in real time through the use of live chat. The viewers can ask the host questions about the product or the stream, and the host can answer questions or even poll the viewers. At any point in time, viewers can easily make a purchase by clicking on the product and being taken to the purchase page. An impulse purchase is only a few clicks away. This ease of access makes shopping a seamless part of the viewing experience. High levels of impulse buying and purchasing combined with ease of access result in a high conversion rate from viewers to customers. This interactivity and conversion is key in retaining happy customers who will return to the streaming platform in the future. Through happy customers, the brand or retailer may also benefit, as customers can often form an association between a product and a positive experience.

Strategies for Brands to Leverage Live Shopping

Creating engaging live shopping experiences Engaging an audience is crucial for both the retention of potential customers and to maximize the chances for more sales. Not only does this mean giving incentives to purchase, such as discounts and time-limited offers, but also getting the audience involved during the live event. This can involve revealing new products and using the audience as testers, or it could mean using interaction through chat or polling to make decisions within the live event. A more interactive approach has been taken by a skincare company in China. They have used a live stream game show format hosted by a salesman to showcase and sell their products. Viewers are able to purchase at half price if they answer a question correctly, or sometimes they are given free samples of the product. This method has proven to be very successful and has much potential for other brands.

Collaborating with influencers and celebrities A successful live shopping event is a mix of well-known personalities or influencers within the brand’s niche. Typically, live shopping events featuring public figures do very well in terms of sales. Engaging with someone who has influence over potential customers can help to bolster awareness and drive sales. Sometimes this means having the influencer appear at the event, present the product, and demonstrate its features. Other times, it means providing the influencer with a free product to show to their audience. Usually, influencers have large online audiences, and when they go live to their audience, they also drive sales during regular streams on platforms like Twitch or YouTube Live. Typically, influencers who have engaged in such events have stated that they have been able to earn larger amounts of revenue compared to subs and donations from Twitch through live shopping, so it has been a success for both the brand and the influencer.

Collaborating with Influencers and Celebrities

Typically, a collaborative effort with an influencer or celebrity serves to increase brand exposure and credibility in the eyes of the end consumer. It can be expected that these remain the primary aims for collaborating with celebrities and influencers in a live shopping context. Consider the product endorsement. This is a marketing tactic as old as time and likely here to stay. Endorsement from a public figure serves as a symbol. It aligns the product with the personal image of the endorser, thus aiming to transfer the perceptions that people hold of the endorser to the product itself. This, in turn, increases the familiarity and credibility of the product in the eyes of the end consumer. The same point can be made in the context of a live shopping event featuring the influencer or celebrity. High visibility of the figure’s interaction with the product can serve to solidify the connection between the product and the image of the endorser. Viewers may even perceive the event as a sort of testimonial to the product by the endorser, further increasing the product’s credibility.

For many brands, when trying to reach their target demographic, collaborating with influencers and/or celebrities can be an effective approach. This is no different in the realm of live shopping. Since live shopping is still a relatively new concept, there is much to be learned and developed in regards to the best strategies for leveraging influencers and celebrities to increase the efficacy of branded live shopping events. However, some insight can be gleaned from similar collaborative efforts in other media, which suggest the potential for a substantial impact.

Creating Engaging Live Shopping Experiences

The content was fun. Watsons Singapore successfully live-streamed to show their new product. They made the product into a snack. Viewers were able to watch the video until the end to see whether the product was tasty. They could purchase the product immediately at the end of the live-stream, which would increase impulsive purchases.

In Singapore, Watsons Singapore live-streamed a function. It was genial and friendly. They had Jasmine Sokko as their guest singer. You could request a snack to get a card. Also, in the middle of the function, there was a 5-quiz event. The winner would obtain gifts. The image above showed Singapore’s favorite ice cream brand. The goal was to sparkle positivity to the audience and make the shopping experience more delightful and fun. The aim was to keep the audience watching until the end of the live streaming. In the end, the brand was successful in keeping the audience entertained, even though the live-stream was scheduled during weekday working hours.

Utilizing Interactive Features and Real-time Feedback

The live shopping experience differs from traditional e-commerce as it allows for instant communication between the brand or retailer and the consumer. In a recent interview, Emily Rudin, CEO of crowd-powered retail marketing platform, Wanelo, explained how live shopping capabilities have enabled “synchronous shopping, where customers can engage with the retailer and also each other around the product.” The availability of synchronous communication adds an entirely new level of feedback, and the ability for consumers to ask questions and receive instant answers is a very powerful selling tool. Johnson said community feedback features and QVC-style audience chats around live video are effective ways to get viewers to talk and participate. He made an interesting case for using live game show formats to promote certain products, as it’s both an entertaining experience and a way to capture useful customer feedback. This kind of user engagement provides an immediate impression of consumer feelings, and the customer can be directly responsible for changes in sentiment or opinion. For this reason, live video can be a proactive selling tool, as brands can identify and address any consumer uncertainty or negative perceptions in real time.

Leveraging Data and Analytics for Targeted Marketing

Most live shopping platforms allow brands to access backend data that provides valuable insight into the viewers. This data can include age, gender, and location of the viewer, as well as what they watched, liked, and purchased. This data can be crucial for brands to better understand their demographics and to retarget potential customers. Klarna reports that 30% of UK consumers and 43% of US consumers have noticed an increase in digital marketing promoting new products, services, or events and feel they are being retargeted, and that it is extremely effective to do so. Statistics in retargeting also appear to be higher. Klarna has found that across their live shopping events, their regular static retargeting ads and their live shopping post-event retarget ads, live shopping brought in 6% more advance signups, 18% more website visitors, 9% more purchases, and also 6% larger AOV from advance signups.

Once the live shopping session has ended and the video is stored on the platform, brands can utilize the metadata and keywords associated with the video to optimize SEO and make it easier to find for future viewers. During a session for womenswear brand Topfoxx, the brand and its influencers accumulated 1800 views in a 1-hour span, and 800 of those viewers came after the live had ended. By tagging their video with different metadata and keywords, Topfoxx was able to more than triple their viewership after the live had ended.

Case Studies: Successful Live Shopping Campaigns

One company that found innovative and profitable ways to bring live shopping to their online store was Wemo. The Wemo live shopping event came directly as a result of the great success from other QVC-like shopping channels. The event was simple and convenient to the customer. Wemo began the event by sending out an email to its customers letting them know of the event. Customers were then able to go onto the website and view streaming video of a Wemo representative explaining products as they appear. What really sparked interest in this event was the fact that Wemo had doorbuster deals every half hour. These deals were heavily discounted products that were only available instantaneously during the streaming event. This created a sense of urgency for customers to participate in the streaming event. Wemo’s action proved extremely successful. Traffic to the website increased by 533%, shopping bill by 300%, and order placements by 297%. With incredible results like this, it is very likely that Wemo will continue hosting live shopping events like this in the future. This strategy has also grabbed the attention of other companies that now see live shopping as a new strategic way to increase sales in the digital age. This could set off a chain reaction of further developing live shopping technology.

Brand A: Driving Sales through Live Shopping Events

During the event itself, it was announced that several free gifts would be included with purchase. These items wouldn’t usually come with a sale but would add value for the customer. A major advantage of live shopping for this brand was the ability for customers to ask questions about the product before purchase. While it can be difficult to get a customer to email a question or make a phone call after the fact, having the question and answer session live or visible in a stream allows customers to get the information they need without inconvenience. This proved useful during the event and led to a few sales of higher value items that may not have happened otherwise. A specific example might be somebody considering buying a watch but unsure as to the strap size they need. An answer to this question might lead to a sale, whereas the same person may forget or not bother to check the strap sizes later.

The campaign comprised of a single live shopping event, during which a discount code for 15% off the entire site was announced. This was done in response to difficulty caused by the worldwide pandemic and a general downturn in sales across almost all industries. The event was heavily advertised in the week leading up to it across brand social media accounts, and an email was sent out to existing customers to inform them of the event.

This campaign took place in 2020 and was a largely experimental affair. Due to the luxury nature of the product and the fact that many customers may prefer to purchase such items in a physical store where they can inspect the items before purchase, sales on the company website have been up and down. An attempt has been made to try and sell products through social media platforms, though only mild success has been seen.

However, the brands discussed thus far have been disparate, in either form or product. Brand A deals in luxury leather goods, offering a complete range of items from travel bags and satchels to wallets and watch straps. The target audience for the brand has always been difficult to pin down. The product range and price have seen a lot of variation since its inception, though generally, the target market is any person who values quality and luxury in the products they buy.

Brand B: Building Brand Awareness via Live Shopping Streams

In 2018, Japanese cosmetic company SK-II aimed to declare what beauty is and must be in today’s society. They created a campaign following 5 women on a quest to alter their fate in pursuit of changing their skin ‘destiny’. From the mentorship of behavioral psychologist Carol Dweck, to match-fixing the economy of wedding markets in East Asia, they targeted the pressure of marriage and its impact on women. “What we hope to achieve is to start a social movement by provoking and redefining the meaning of beauty for women in society today. It is timely and it is right for a brand like SK-II to take on the issue of women’s perceived pressure to marry in relation to skin quality because it’s that advancement of marrying for the wrong reasons that leads to women feeling compromised and selling out on their dreams. By producing the Marriage Market Takeover documentary, we hope to be at the forefront of this social change and empower women to shape their own destiny,” said SK-II CEO Mr. Sandeep Seth. This movement obviously lies in belief of potential change for women around the world today, and sees it as a gateway for women to begin investing in the quality of their skin and face a better future. By activating around this global issue and sparking conversations amongst today’s modern women, SK-II is promoting the purpose and relevance of their products to the changing beauty reality for women today. The chosen tactic for the campaign was to leverage one of China’s biggest cities, Shanghai, as a combat zone where women are fighting for their dreams. An emotional video that exhibits a marriage market at People’s Park in Shanghai captures the anxiety and disappointment of parents struggling to find a suitable spouse for their daughters. At the very same time, it brings to life true accounts of women’s encounters with inquisitive relatives and friends at social gatherings, who try to tinker with the comfortable single life these women have created for themselves. By aligning with a harsh reality in China that is reflective of East Asia, the documentary has struck a chord with Chinese women and has empowered them to step up and take action to change their skin ‘destiny’.

Brand C: Enhancing Customer Engagement with Live Shopping

In order to do this, they used a well-known Chinese live streaming platform and used a popular celebrity to do a joint stream between his fans and the brand’s customers. During the live streaming event, the company’s staff and its customers posed a variety of questions regarding the behavior and perceptions of its customer base towards the brand, giving interviewees an opportunity to win prizes in return for their honest and comprehensive answers. This information was then compared to a control group of answers collected through surveys given out on the brand’s online community forums. The use of this objective (study two different groups of people with the intent to understand the perceptions of one by comparing them to the other) was an extremely efficient method that utilized the live streaming platform to generate information that could not have been obtained by traditional means. A great example was a high-level consumer that admitted to downgrading his usage of the brand as it wasn’t suitable for his promotion to a new job, stating that he was willing to give detailed feedback in return for a free product.

Here comes a segment that’s different – brand C’s approach to live shopping is different from brand A and brand B in that it uses live streaming to understand and engage its consumer base and not for explicit promotional and sales purposes. The company already had an in-depth understanding of its core customer base but had noticed that shifting trends in internet usage and consumption among its customers had made it increasingly difficult to understand and connect with them.

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