Social commerce is coming to digital retail

Live shopping offers retailers, brands and digital platforms a new channel with huge opportunities to create markets via social media live streams.

Blending online shopping with social media, personal interaction is the real draw of live shopping and what gives it its edge. Live shopping is exciting and brings back the fun factor. Even more, a very real yet augmented online experience of shopping via “being at” an event or “going shopping with your friends” – via a social media app.

There is also a solid informative value within the human element. Learning about a product, asking questions and getting immediate feedback from the host is the ultimate experience. Buying from someone who knows the product best means that everyone will try it, buy it, use it and become loyal to the brand.

But live shopping is not a completely new way of shopping, but a reinvention of the more traditional home shopping format that dates back as far as 1982 with The Home Shopping Network. Then the idea was for a host to showcase and present the product or fashion with all the features on live TV. Shoppers would call in and order their items, and the network or platform warehouse would ship directly to their homes. At the end of the 90s, HSN went international, to Germany and Japan. This was followed by QVC. Finally in the early 90’s you had QVC UK which was in competition with HSE (Home Shopping Europe) until the mid 2000’s but that was short lived.

But live shopping, a whole new level of online shopping, has only appeared in recent years, mixing online shopping with entertainment, with social media as a means of marketing.

Marcel Brindöpke, CEO of Heyconnect (Fiege Group) and Karoline Gross, Founder and CEO of Smartzer addressed the hot topic at ECD Global London recently, discussing social commerce via social media and how live shopping really is the next level in merchandising.

We can recognize the origin of live shopping in China when Alibaba Taobao, the online wholesale supplier, pioneered a new way of marketing in seven years after launching its first online store in 2003. As a further development, they created Taobao Live. The 2016 app inspired by Alibaba’s gaming feature premiered at the first Alibaby 11.11 Countdown Gala, a variety show where viewers can log in, play along with the show, vote for winners and more importantly, buy products featured on the show.

Through the use of bloggers and influencers called key opinion leaders (KOLs), who took over to social media, live shopping quickly gained momentum towards the end of 2019. Considering the adaptations to life caused by a spreading pandemic, a new way of shopping had to be explored . Taobao Live stepped into the pandemic and helped change the digital retail industry in China, establishing the country as the first to own a major sales channel in less than five years and winning the first quarter of 2020 with livestream sales reaching 150% ROI. While China is enjoying their projected 423 billion in sales by 2023, a recent November report from Statista stated that by 2022, livestream e-commerce sales were estimated at $17 billion in the United States. By 2026, e-commerce revenue generated by live online commerce is expected to nearly triple.

In Europe, and despite Britain’s best efforts to emulate China’s new features, the transition to this next level of shopping has not been stellar.

Live shopping has proven to be a bit more difficult to build traction. It may have to do with the shutdown of live shopping functions in Facebook. TikTok also suspended the expansion of its Live Shop solution in Europe and the US due to low consumer engagement. Overall, European consumers have not been convinced of the safety of live shopping via social media versus the credibility of big stores such as Amazon.com.uk or Shopify. Karoline says: “in the West it doesn’t really work like that, because there are so many differences in culture, how people shop, how they experience things… for example, 98% of shopping in the West doesn’t happen via social platforms, it happens on e-com sites, marketplaces, retailer sites etc… people are not comfortable giving their card details to TikTok.”

Here are 3 key components to start your live shopping channel

The channels

Live shopping channels can help brands move away from the traditional online store or ecom site and explore the latest channel of merchandising. Marcel states “for a brand, there is a kind of melting pot between the personal interests of people and your brand as part of someone’s personal interest … there is no boundary between shopping and interaction, that the purchase is part of the experience.”

For shoppers, it’s easier than ever to buy a product via social media with a clickable link directly within the video itself, speeding up the purchase process and avoiding the risk of losing interest when redirected to another page, external online store, an overwhelming brand website or online store.

Instagram’s payment feature includes tagging, during any live shopping event. Here, consumers can buy and pay directly through any brand’s Instagram store. TikTok is currently leading the way, as is YouTube with their Live Stream feature, but Facebook and Pinterest are still exploring their possibilities.

E-commerce and third-party platforms are also a great way to take a brand to the next level via live shopping. Amazon Live’s feature via the Amazon Shopping App allows brands and influencers to build followers and get notifications every time they do a live stream.

Owned channels will give brands the control needed when presenting content. They can present certain features and target specific groups. A case study on Karoline’s Smartzer platform, Volkswagen used their live shopping channel to make the new Golf R video interactive for their customers to easily discover more about its features and to order test drives. The interactive video was linked to Instagram Stories and In-Feed ads.

The back end design

Essentially, you want a digital showroom, where your team can interact live with customers and answer questions via a chat panel. This requires a combination of an integrated video solution that is interactive, together with a fantastic analytics tool.

Live streaming is focused on both, but more the latter, which is why social media apps are perfect, they provide all the necessary features. In a January 2022 Shopify survey, between January 1, 2021 and September 30, 2021, the number of Shopify merchants installing live shopping apps increased by 61% globally, compared to the same time period in 2020.

So far, the current options for shopping via social media are provided by clicking on a link on an ad, which then takes you to an external website or store. TikTok is the closest of the social channels that are fast moving to offer in-stream purchases, directly from a live stream.

Determining your system requirements can involve questions about how you can even stream live, as well as whether you’re using your dedicated brand channel as a distribution of content versus a customer experience.

From a marketplace standpoint, Marcel insists, “it’s obviously R&D right now, because you have to figure out how things work and what works, and you have to learn quickly and quickly, and if you see that things aren’t working, you have to adapt . I think there’s a lot of monetization in this, first of all, it’s basically visibility that you can sell to brands, like 500 people are watching or 1,000 people are watching, do you want to advertise in this?” Building all kinds of tools can prove to be a challenge if you don’t already have them in place.The good news is that platform players can still rely on the ekom infrastructure, as well as integration with a brand’s online store (e.g. Shopify, WooCommerce ).

As intimidating as the introduction may seem, the structure of live streaming consists of components or channels already in place, and by reusing data from high-engagement live customers worldwide, driving a unified trade.

The content

There is a great need for a next-level online shopping experience, one that goes beyond the drudgery of standard scrolling and clicking from our smartphones. Generation X and Z’ers have continued to challenge the world from a retail marketing perspective where brands and retailers provide exciting, informative and extremely authentic content.

Brand and e-commerce sites have until now relied exclusively on pre-recorded videos or highly edited but still images. Live shopping continues to challenge D2C approaches in that it is not about the goods, but the customer experience.

The goal is to have a live stream video or event with product experts, or online store assistants, so they can provide quality in-store support worldwide from their home, or a designated studio with your products.

But it is more than that. Customers, viewers or shoppers long to connect and interact with live streamers. Engaging with a real person can own such an item, and enjoy the latest fashions, and provide amazing customer service, live.

Like QVC and HSN, the only interaction was a caller, live, patched in a few times. It was always uncertain whether it was a “plug” or an actual customer who called. Still, the caller wanted to speak to the host, and in the 1990s, while interaction was present, it was limited due to the technology available then. Now, using live shopping, viewers can comment, chat and be directly addressed by name from the host. Similar, but updated and by far, a more interactive engagement style of trading.

With the rapid development of livestream shopping, hosting has taken on a new form, a less manufactured approach and style that platform players should jump on. People are now filming from their homes as they authentically live and use these products, fashions and electronics. Karoline says, “getting a professional presenter to follow a script and learn the product and get on camera not only requires huge amounts of effort, time, but is also very expensive”. Having hosts, self-producing a live video, using minimal equipment and in the comfort of their home – is optimal.

It is important to note that viewers should feel like they are interacting with someone who is relatable and a reliable source for how these jeans feel in real life. For retail fashion, part of the stream will be the host showing off a pair of jeans, wearing the jeans and adding a story about their own experience; wash the jeans, own them in many colors and styles, thus connecting with every viewer.

Influencers and celebrities can be particularly effective as hosts due to their level of trust and relatability. Karoline believes: “Ideally, you want two (hosts); someone who knows the product well and someone who brings that entertainment factor to the event (influencers, celebrities, etc.).”

Live shopping is part of the new retail normal, and it’s here to stay. With trends in recent months, which explores an important marketing tactic, in that brands are now offering special product-based drops (as opposed to discounts on products in conventional stores), helping brands to sell at relatively higher prices.

More importantly, by providing a means of deeper engagement directly with customers, brands can continue to grow to soaring heights by showcasing their lines, building a community and selling to a loyal customer base. See the entire panel on live shopping
here.

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