Why Livecommerce

It’s showtime! How live commerce is transforming the shopping experience.

Blending entertainment with instant purchasing, live commerce offers retailers, brands, and digital platforms a new channel with enormous scope for creating value.

Live commerce can help brands, retailers,
and marketplaces primarily in two areas:

Live commerce is entertaining and immersive, keeping viewers watching longer. It also telescopes customer decision journeys from awareness to purchase. Time-limited tactics such as one-off coupons can be used to generate a sense of urgency. Companies report conversion rates approaching 30 percent—up to ten times higher than in conventional e-commerce.

Improving Brand Appeal
and Differentiation

Done well, live commerce increases a brand’s appeal and distinctiveness and pulls in additional web traffic. It can strengthen positioning among existing customers and attract new ones, especially young people keen on innovative shopping formats and experiences. Some companies are seeing their share of younger audiences increase by up to 20 percent.

A rapidly growing channel

Live commerce has evolved rapidly in China, taking less than five years to develop into an innovative sales channel with an estimated penetration of 10 percent. 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 (Exhibit 1). This growth spurt has been intensified by the COVID-19 pandemic, and Chinese sales are expected to reach $423 billion by 2022.

The product categories most often showcased in live commerce are apparel and fashion, with a 36 percent share, followed by beauty products and food, with roughly 7 percent each. Consumer electronics account for some 5 percent, and furnishing and home decor for almost 4 percent.

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In general, who or what influences you most when recommending a product or brand

Professional tools. Simple setup.

Planning a live-commerce event also involves deciding on the following:

Technology. The key technology choice is which platform or marketplace to use for hosting the stream and providing e-commerce functionality. Some providers offer one of these functions; others, such as Instagram and Facebook, offer both. The right choice depends on a business’s level of maturity with live commerce. It also involves considering which technology provides the biggest target audience, which features it offers (live chat, “likes,” and so on), and the level of commission to be paid.

Tracking. As in e-commerce, effective monitoring and measuring of event impact by audience, day part, and so on is crucial to understanding what works and what doesn’t. It is important that the live-commerce operating model be flexible enough to act quickly on that data. After a show, for example, it’s possible to send a link to a recording of the show to a viewer who watched for just 20 seconds, or to offer someone who stayed for ten minutes a discount to convert their interest into a purchase. A one-off coupon code can help monitor customer behavior more precisely. Having this degree of flexibility requires a good content library, clear action plans and offer criteria, and a “continuous improvement” mentality.

Marketing. Like any event, good marketing drives performance, and—as experience shows—companies often don’t invest enough time or resources to get their marketing right and can “starve” even the best marketing efforts. To maximize views, it’s crucial to take an omnichannel approach, alerting target audiences to an upcoming show through newsletters, emails, websites, apps, push notifications, and social media and providing links and information on paid social media. The best producers have an intimate knowledge of the features (such as countdown clocks) offered by the chosen livestreaming platform, and they invest the time to understand which websites their target audience frequents and place ads there.