What is this about? We are talking about something as hot as the Teekanne tea from our last campaign and something as fast as inflation in Poland: live commerce! Some say it’s a new generation of teleshopping, others point to an analogy between this phenomenon and the stalls at bazaars and markets. Either way, it’s a fact that sales broadcasts fill a gap in the selling experiences of traditional stores. No wonder, then, that more and more brands are starting to use this tool. We also have looked into it and would like to share with you the things you need to remember about before engaging in this form of advertising.
It all started in China… and with Karens.
We are not going to elaborate on the beginnings of live commerce in China, where it was born. Let’s just show some data that speaks for itself. In 2020, the number of Chinese users of live streaming platforms increased to 617 million, which is 62.4% of all Chinese Internet users. One of the icons of live commerce in Asia is Austin Li, who conquered the world as the “king of lipstick,” selling 15,000 lipsticks in 15 minutes. He has been live streaming at TaoBao for more than four years now, and in 2019, on the Singles Day, which is a big day for commerce, he generated sales of USD 145 million for AliExpress.
In China, during live streams, it’s not only fashion, cosmetics, electronics, or furniture that gets sold—Chinese farmers also sell their produce through this channel. Wang Lei, who is highly popular in Singapore, started with selling seafood. Already during his first stream, he got 300 orders. Today, he offers a whole range of products.
In Poland, the numbers related to sales broadcasts are optimistic, too. One in four Poles has purchased something live in social media and 10% of the population frequently buy things this way! There is no doubt that the entrepreneurial owners of small boutiques and bazaar stalls have contributed here. Following the numerous Facebook streams, you would easily notice Karens going mad with delight over the leggings that hold in place what they should—at great prices and in ultimate quality. Top sellers would see 700 pieces of clothing go during a single stream!
Where does this phenomenon come from?
In the case of sales broadcasts, the mechanism of instant gratification works like a dream: when watching a live stream and listening about the advantages of the product and its capabilities or the opportunities it offers, we are likely to make a spontaneous purchasing decision. Consumers in front of the screen talk to one another, exchange opinions, and ask questions that are answered by the seller/brand—this allows for evaluating the product, justifying the decision to purchase, and making this decision quickly.
The entertainment factor is a big element here. Live commerce is a show of sorts and a lot depends on the skills of the host. Consumers are looking for contact with another human being, often a popular influencer or an idol. This interaction generates emotions and the awareness of additional discounts increases the urge to take advantage of an “one in a lifetime opportunity.”
A number of brands in the cosmetics sector are already using this channel (including Tołpa, who are a regular client of ours) and so are fashion brands (La Mania, CCC, Tom Tailor, etc.) and companies such as IKEA, Allegro, and Amazon. Even the Mexican Hyundai has opened up to this form of sales in connection with the premiere of two new cars: they set up a small studio in one of their dealerships and achieved a ROI of 3:1.
Some practical advice
The main thing is not to think about live commerce in terms of a single gig. Instead, you should integrate it into your brand communication strategy and, for instance, organize regular events for a specific period of time. Both the brand and the consumers need to have some time to get to know the format—you should analyze the expectations of the users and, on the basis of this information, optimize future broadcasts.
A few things to take into account:
- Preparations—have a plan and a framework scenario for the stream. You need to define the style of the live stream, know which products and how many of them to present, evaluate the time you need for that, and choose what you will emphasize in your presentation. Naturally, it’s impossible to plan everything. Still, a live stream that features unexpected sounds, wrong moves, or the wrong products is unlikely to produce the effects you were hoping for. In terms of expecting the unexpected, have a look at the first live stream organized by the Allegro shopping website (fast forward to 3:25:45 and watch for a few minutes).
- A charismatic host—brand specialist or maybe an influencer? One thing is certain: the host should know the product well, so as to be able to present it in the best possible way. An influencer may dramatically increase the reach of a live stream and his or her credibility builds the credibility of the whole show. Streams are often hosted by two persons: one is responsible for presenting the products, while the other answers the questions asked by consumers in the chat.
- Place of streaming: you can live stream from any location that has a good Internet connection. It could be a corner in your company office, a separate section of your store (this is what the Douglas perfumery chain does), or a studio with a dedicated stage design.
- Technical challenges: good lighting and sound. You can consider hiring a production team that will guarantee a high quality of the stream.
- The right time of the day: specialists recommend Wednesday and Sunday evenings as the best time to stream, but you could explore various options. Perhaps your consumers are more active on Saturdays or in the mornings? CCC has been getting its clients used to regular streams on early Thursday evenings.
- Efficient chat moderation: nothing discourages engagement like unanswered questions. Keeping the chat conversation going allows for extending the average duration of watching.
- Special offers: what sounds better—the premiere of new perfume or the chance to win a Porsche during the stream? The Douglas perfumery chain knew what would draw people to the live stream. Discount codes and special offers are important elements of live commerce.
- Recording the live stream: the users that were unable to watch it live will have an opportunity to watch the recording at a time that is convenient for them, getting more knowledge of the product and its functions. The video will obviously not be interactive, but can still provide answers to the consumer’s questions, convincing him or her to make the purchase.
- Promoting the event: only the right number of viewers guarantees good conversion rates and sales boosts . This is one of the most important elements of a successful live stream.
- And, finally, number 10: test, implement, optimize! What works for one brand may not work for another—everything depends on the consumers and their needs. Ask the users about the products they would like to see, take note of their comments: this will show you the direction in which you should go.
To sum up, the potential of live commerce is huge and the brands which understand this tool that combines entertainment, a social aspect, and sales into one will get an opportunity to reach the clients and increase their sales.
So, how about streaming together?