The world of commerce has seen a dramatic new format – one that blends entertainment with interactive and instant purchasing. The best example of this would be Alibaba’s Taobao Live annual event, involving an online livestream broadcast with their ecommerce store to allow viewers (and consumers) to watch and shop at the same time. The Chinese retail giant pioneered this ecommerce revolution (in 2020, the first 30 minutes on Taobao Live generated $7.5 billion in sales) and quickly solidified the platform as a reliable digital tool for boosting customer engagement and sales. In China, live commerce has transformed the retail industry and established itself as a major sales channel in less than five years. The potential is staggering – both for brands and ecommerce outlets alike. Analysis indicates that live-commerce-initiated sales could account for 10-20% of all ecommerce by 2026. It is truly the next generation of commerce.
What product categories stand to gain the most from the livestream sales revolution? Those most often showcased are ‘Apparel and Fashion’, with ‘Beauty’ running a close second, along with ‘Fresh Food’, followed by ‘Consumer Electronics’, ‘Furnishing and Home Décor’ and ‘Automobile’. And exactly how – and why – do they gain from this sales model? Because live commerce is entertaining and immersive, it can accelerate conversion, telescoping customer decision journeys all the way from awareness to purchase. In fact, companies have reported conversion rates approaching 30% – a staggering ten times higher than traditional ecommerce. Another advantage of live commerce is its ability to enhance brand appeal and differentiate it from the rest of the pack. Young people are particularly open to innovative shopping formats and experiences, and some companies have seen their younger audiences increase by 20%.
When it comes to demographics, live commerce is extremely popular with Generation Z and millennials, although older consumers are beginning to take notice. And Western brands, retailers and marketplaces are starting to establish their own live commerce platforms to promote products – particularly in the fashion and beauty categories. Companies like beauty retailer Douglas and fashion heavyweight Tommy Hilfiger have both launched livestream programs. With consumer awareness and demand building, live commerce has also been identified as a great platform to feature an influencer or brand representative, elevating the process to an entertainment experience as well as a purchasing opportunity.
A few things to keep in mind:
- It’s important to know your audience, what matters to them and how to get their attention. Analytics and tools can help build a profile of potential customers. For example – in fashion, beauty and luxury goods, millennials are the top-spending cohort, with boomers coming in second, followed by Gen X and Gen Z. And on that note – millennials are projected to account for half of the global population by 2030. That’s an audience worth targeting.
- Popular formats to consider might be the tutorial – such as a makeup demonstration hosted by models; the interview style show with a name or influencer to feature the product; or a “behind the scenes” piece, showcasing the inside story of a brand to help build awareness and customer loyalty.
- Choice of technology (omnichannel is preferred), tracking (monitoring event impact lets you know what works) and marketing are all critical components in the success of your live commerce activities.
Here’s where BPO (outsourcing) companies can support you while your company moves to a live commerce model – and let’s face it, that move is a big leap. Partnering with an established business processes outsourcing company like award-winning Anexa can allow you to keep your eyes on the future of commerce and where you need to go, while we manage your core business processes. Whether it’s customer-facing services, social media management, data entry, marketing or tech support, Anexa can tailor a business support package to fit any company, any industry and any budget.
Reach out today. Anexa.