Live Commerce Brings Instant Gratifications to an On-Demand Generation
How live shopping solutions grew from pandemic-era explorations to an essential part of ecommerce infrastructure, and what the future holds
Live commerce — streaming video with interactive and shoppable elements — was an underutilized channel by most brands prior to the pandemic. In 2020, however, it became a star channel, subject to increased attention and investment as brands sought a way to foster and develop relationships with consumers from the comfort of their couches. Its accelerated development may be born out of necessity, but its implications will reshape the way brands connect with online shoppers from here on. The on-demand generation is getting one step closer to the holy grail of instant gratification, and live commerce will play an essential role in that evolution of consumer expectations.
From Pandemic Explorations to Part of Ecommerce Infrastructure
Last year turned out to be a significant growth year for ecommerce — Digital Commerce 360 estimates that the additional $105 billion in U.S. online revenue in 2020 accelerated the development of ecommerce by two years. Evidence of this rapid expansion is not exclusively limited to the United States. Global ecommerce sales jumped 25% year over Year between 2019 and 2020 with eMarketer forecasting total revenue to sharply increase to just north of $7 trillion by 2025.
Developing the requisite infrastructure to support this shift in shopper behavior has become table stakes for retailers keen to mitigate the effect decreased in-store traffic has on the bottom line. In a super-saturated ecommerce ecosystem filled with individual creators, startups and corporations alike, merely making a few SKUs shoppable does not do enough to differentiate your brand. Thus, in pursuit of deeper and instant connections, some innovation-minded brands turned to live video as a sales channel.
live video has surged in viewership over the past half decade. Cisco estimates that 17% of the total internet video traffic share by 2022 will be live-streamed, 15 times higher than where it stood five years prior. The sharp rise in live video viewership coupled with the continued growth of ecommerce presents an enormous opportunity for brands to explore new sales channels and tactics.
From a content perspective, long gone are the in-studio QVC segments of yesteryear where talking heads would shill for hours hoping for odd calls from primarily octogenarian viewers. Today’s live commerce experiences are characterized by dynamic influencer talent, advanced chat functionalities and, most importantly, click-to-cart and seamless checkout capability.
Of course, the developments of live ecommerce as part of the ecommerce infrastructure vary greatly in different regions of the world. In China, where mobile payments and live streaming has enjoyed a much higher adoption rate, live commerce has matured into a $100 billion a year industry. Alibaba’s Taobao Live alone accounted for approximately 350,000 hours of live video content watched daily with brands regularly going live. Kim Kardashian, Magic Johnson, and luxury brand Cartier represent just some of the personalities and brands you would find on the platform.
While the ubiquity of live commerce in the West has yet to reach the heights it has in China, new behaviors developed as a result of the pandemic have helped move the needle towards more widespread adoption. In the U.S., early movers like Bloomingdales hosted live commerce events on traditional video-communication platforms without shoppable functionality like Zoom while others like Nordstrom built owned and operated channels dedicated to the cause.
Social Platforms Making Live Video Shoppable
Since then, developments by the major social platforms have afforded brands the tools to go live on channels where a critical mass of their consumer base already spends time. For example, Instagram’s Shop tab — viewed by over 130 million users monthly according to Hootsuite -debuted its live commerce capabilities for creators in May 2020, adding a suite of broadcast tools and features that enabled in-app purchases powered by Instagram Checkout. Instagram has since built a more robust feature set for live commerce on the platform, introducing Live Rooms in March 2021, allowing multiple accounts to go live simultaneously in the same live stream.
Though not as expedient in its development as its photo-sharing corporate cousin, Facebook rolled out live commerce features as part of its Live Shopping Fridays in May of this year. While Facebook touted largely the same feature set as Instagram Shop, the launch partners selected helped reconcile the cultural appeal of live video content and the convenience of ecommerce. Cosmetics brand Sephora brought in a team of “expert beauty aficionados” to share the season’s must-haves and beauty tips. Abercrombie and Fitch gave fans an inside look at their upcoming collection and allowed viewers to ask questions about all the latest trends in fashion of the brand’s stylists and designers.
Companies outside the Zuckersphere have also begun to test the live commerce waters. TikTok partnered with Walmart during Holiday 2020 for the “Holiday Shop-Along Spectacular” featuring the platform’s most popular creators in their favorite digs from the brand. TechCrunch reported that the activation led to 7 times more views than TikTok anticipated and an increase in Walmart followers on the platform by 25%. The event proved so successful that Walmart opted to run round two with the “Spring Shop Along” featuring beauty brands like Maybelline and Bliss.
While Pinterest has tested the live commerce waters, their most interesting social commerce feature comes by way of their Product Pins. Product Pins are enriched with metadata and formatted to let people on Pinterest know that they’re shoppable. They contain pricing info, availability, product title, and description. In June, Pinterest rolled out a new feature called Shopping List, making Product Pins trackable so that consumers are privy to quantity and price fluctuations.
Amazon’s Two-Pronged Offensive to Live Commerce
Beyond social platforms, Amazon is waging a two-pronged offensive to dominate the live commerce space with Amazon Live and Twitch. Amazon Live launched in 2016, but it was only after the debut of the creator app in 2019 did the platform start gain more traction. Amazon Live’s page features multiple creators and brands on air at any time with the full-suite of functions that have become customary for live commerce environments — community chat, subscribe buttons, and a frictionless path to purchase. Prime day 2020 helped stoke Amazon Live’s flame by featuring the service prominently across the Amazon site; a spokesperson for the company said that 1200 total live stream shows were hosted that day. Sports apparel brand Puma was one of the notable advertisers, employing trainers as brand ambassadors to showcase their gear in high-performance scenarios.
While Amazon Live may be Bezos’ big bet for live commerce, Twitch presents a unique opportunity to speak to consumers native to live video environments. Though Twitch has sunset its Amazon Blacksmith integration — a tool that enabled creators to embed shoppable links in their broadcast — driving users to purchase can still be done in less than a few clicks. Twitch (like most other live video destinations) has a chat section, but unique to Twitch is its !commands feature, which prompts URLs in chat based on specific user input. These commands can be used to send viewers to any external destination — perhaps a landing page where fans can buy your products.
Beyond the smooth commerce experience, these creators are already amongst the upper echelons of clout-getters in the live video community and subsequently come with swaths of enormously passionate fans. Research from Twitch shows the statement “I would buy a product/service simply for the experience of being part of a community around it” indexes highly amongst its user bases. And while Twitch’s core audience primarily comprise of gamers, this sentiment is most certainly echoed across fervent followings of other creators.
For instance, Johnson & Johnson brand Neutrogena Hydro Boost is currently amidst a live commerce campaign, which captures how to best leverage the platform as both a sales channel and content medium. Partnering with both health experts and gaming influencers, Hydro Boost brought candid conversations about skincare and holistic wellness to Twitch’s ‘Just Chatting’ section. While the custom Hydro Boost emotes being spammed in chat and thousands of viewers tuning in are ringing endorsements of the content, the message frequency is only rivaled by that of the “!neutrogena” command. That command links out to a bespoke MikMakURL which not only enables users to purchase from a number of retailers, but tracks the clicks generated by individual creators’ communities to help monitor performance.
Specialty Players on the Rise to Support Brands Going Live
Besides MikMak, there is a budding crop of third-party solution providers that brands can partner with to either support or directly power their live commerce experiences. Together with the social and ecommerce players, they round out a burgeoning ecosystem for live commerce.
NTWRK, a mobile-first video shopping network, is perhaps best positioned of them all to capitalize on increased attention in the space. Working to provide unprecedented access to exclusive content and ‘drops’ from the world’s most renowned artists and biggest brands, NTWRK not only has its finger on the pulse of the cultural zeitgeist but has the social currency to shape it. With backing from the likes of Lebron James, Jimmy Iovine, and Drake, as well as experience collaborating with premier brands like Nike, The Hundreds, and Alexander Wang, NTWRK has the tactical know-how to help brands navigate an end-to-end live commerce campaign. With a reach of 8 million diverse and affluent consumers (a 75% non-white audience with an HHI over $100,000), NTWRK is a surefire way for your brand to generate retail buzz and the ever-important FOMO.
A few weeks back — NTWRK closed a $50 million round led by Goldman Sachs — a true endorsement of its staying power. Those funds will likely be allocated to product development and enhancement of live commerce capabilities, but NTWRK clearly has one eye on what’s next as well. Having recently unveiled an NFT section on their site and committing to hosting more hybrid in-person/online events like SneakerCon and Off Court, it’s clear they’re engaging with their audience to see what resonated with them.
Bambuser and ShopShops are two independent platforms dedicated to live commerce solutions, serving big-name brands such as Samsung, Chanel, and Louis Vuitton. Remarkably, the former touts average session times of 13 minutes, surpassing that of social titans like TikTok (10.85 minutes) and Facebook (4.82 minutes) according to Statista. High session times are indubitably indicative of a captivated audience, subsequently leading to higher engagement (24% of users messaging in chat) and add-to-cart (31%) amongst users.
As brands and consumers alike converge on live commerce platforms en masse, so too does the money — both in terms of investment and projected revenue. ShopShops secured a $15M Series B round earlier in 2021 from a capital consortium while rivals like Whatnot and Talkshoplive raised $20 million and $3 million respectively to further develop and scale their product. As VCs bet big on who will emerge in the ascendancy, forecasts for the industry are bullish and could prove fruitful for all parties. Coresight Research projectslivestreaming to be a top trend over the next few years with revenue estimated to reach $25 billion annually by 2023.
Smartzer not only enables brands to create shoppable live streams but allows for retroactive tagging of VOD so that viewers can navigate to “hot spots” in the frame to click out to purchase. This is a major point of differentiation for the company as it allows brands who may not be ready to take the step into the world of live video to make their existing content shoppable across owned and operated destinations on the web.
Is Your Brand Ready to Go Live?
Now that there is a growing number of platform-owned or third-party solutions that brands can choose from to go live, the key question remains, what do you do once you start a live video with the intention to sell?
Traditional live commerce streams mimic the old infomercial model by heavily showcasing and demoing the product, but with a little more pizzazz than flashing blue screens and a haunting voice reminding you “it’s JUST three low payments of $29.99”. Instructional, expert-led sessions are the proverbial bread and butter of live commerce content; consumers are afforded a nearly-same level of customer service as in-store, but oft with an expert or celebrity persona they’d never connect with otherwise.
Interviews and testimonials are also an important staple of the live commerce playbook. Brand ambassadors help communicate the brand ethos through their individual narratives, and via the vernacular of the audience you’re trying to speak to. Creative exhibitions in which unique pieces are created or offering viewers a behind-the-scenes look at the production process can be a powerful way to connect viewers with the products.
Though categorically, fashion and beauty have the highest percentage of brands leveraging live commerce, opportunities exist for brands in every industry vector. As activity begins to ramp up in the U.S., it’s imperative that your brand begin to test and learn now in order to optimize for when live commerce is a normalized behavior in a few years. Start small by making a few SKUs available across owned and operated social channels and track performance to gauge your consumer’s appetite to shop across those destinations. That performance should serve as a reliable barometer as to whether your brand is ready to dive into the world of live commerce.
We here at the Lab are keeping a close eye on the rapid developments of live commerce and the brand opportunities that lie within. If you wish to learn more about the various brand solutions in live commerce, or simply to chat about how your brand can better leverage the disruptive shifts in retail to your advantage, the Lab is here to help! Please reach out to our Manager of Partnerships Ryan Miller at ryan@ipglab.com to start a conversation.
