The growth of e-commerce is unstoppable. In 2020, while brick and mortar stores closed down, online businesses thrived. It was, the pandemic proved, more resilient than traditional retail against current events.
E-Commerce on the Rise
About 26.28 percent of the 7.8 billion people all over the world are considered to be online shoppers. From 1.32 billion digital shoppers in 2014, the number has sharply increased and reached 2.05 billion in just six years.
Moreover, most consumers (75 percent) who shop online do so at least once a month. About 20 percent shop online once a week.
The e-commerce landscape is only expected to grow in the coming years. By 2023, analysts predict that sales on e-commerce sites will hit $6.5 trillion.
Businesses can no longer deny the importance of e-commerce and online shopping for survival. Consumers want to shop online because it is convenient. And, because of Amazon and other online retailers offering next-day delivery, receiving a purchase is almost instantaneous.
While it has the capacity to increase profits, it is also a highly competitive market. Most big retailers have an in-house digital marketing department or hire a search engine optimization (SEO) firm to boost visibility and sales.
An Enduring Problem
E-commerce has one drawback: there is no option for consumers to inspect and try out the product. Shoppers have to rely on product descriptions and reviews from other customers to see if the product is of good quality or if it suits their needs. Otherwise, they have to place an order, wait for it to be delivered, and send it back if it is not up to their expectations.
It is a costly process. The businesses that offer free returns and exchanges spend billions to offer the service to consumers. Moreover, it creates tonnes of waste trash and carbon dioxide.
It is an inefficient system. The products that get returned do not always get sold. Many of them get destroyed and thrown into a landfill.
Livestreaming offers an alternative.
The Next Big Trend
Live commerce started in China. It is so popular in the country that, according to a survey conducted in 2020, two-thirds of Chinese consumers purchased a product during a live stream. It has, since then, been adopted by online retailers across Asia.
The strategy is still relatively new in the West, but a few early adopters have been using it to attract potential consumers. Nordstrom has already launched its own livestream channel.
Live commerce is a mix of selling, entertainment, and social media. The host, usually an influencer, shows and demonstrates a product in front of an audience. The process is similar to a home shopping network except, because it is online, it is interactive. The audience gets to send messages to the host and ask questions. Meanwhile, the host can respond during the streams.
It is an effective strategy. It can shorten the decision journey of the consumer from product awareness to purchase. Moreover, during the livestream, the brand can offer coupons to encourage viewers to make a purchase.
Companies that do live commerce report up to a 30 percent conversion rate, much higher than the conversion rate of conventional e-commerce platforms.
It can also improve the brand’s appeal, especially to younger shoppers. Millennials and Generation Z are the primary audiences of live commerce. These age groups are often more excited to try trends. Companies say that the share of younger audiences increased by as much as 20 percent. More recently, however, live commerce has also attracted the attention of middle-aged and senior consumers.
More importantly, it provides a solution to the problem of returns and exchanges. One study found that products are less likely to be sent back when purchased from a livestream. There was a 50 percent reduction in the rate of returns because of live commerce compared to conventional e-commerce.
A customer interested in buying a dress, for example, can ask the host about sizing, fit, or even styling suggestions. If they are shopping for makeup, they can ask for swatches or tutorials.
Where to Start
Streaming can be done via social media sites. Facebook, Instagram, and TikTok already have live commerce capabilities. Big brands such as Walmart are already using these platforms.
There are also dedicated platforms that mix livestreaming and shopping. TalkShopLive and Buywith are two popular options.
The number of people shopping online around the world is growing. Brands need to look for ways to capture their attention. The new trend of live commerce has been proven to be an effective way to boost sales online and gather new customers.