How to create a live shopping strategy in 2022
With roots in China, where, according to McKinsey, the market will reach $423 billion dollars in 2022, the live shopping trend has quickly extended its presence in all regions where digital commerce has been on the upswing over the past few years, as well as on the emerging markets, where it is regarded as a method to access younger audiences.
Defined as a combination of streaming and social media, which triggers quick online purchases, live shopping uses content generated in real-time to connect with potential customers, helping them along the way to reach a purchase decision. It is a native communication method embedded in the online environment to deliver an interactive experience, the younger generations of buyers and the older ones (closer to telesales) both being familiarized with it.
VTEX is one of the commerce platforms which offer live shopping capabilities. The VTEX Live Shopping App is a native solution, fully integrated in the VTEX platform, allowing one to easily run live shopping events. Many of the VTEX customers who implemented it managed to significantly improve their conversion and retention rates, and even to increase their Average Order Value (AOV).
However, before implementing a live shopping system, you should be aware of the maturity level of the company. The strategy has to be adapted in order to match with the development degree of the business activity.
From here on out, the classification of the companies may be divided into three archetypes:
1. Low maturity companies: Throwing feelers out
This kind of strategy means that the company focus is on a range from one to five products, which also translates into rarer streams. In this case:
- You may rely on the technology of a social media channel (such as TikTok, Instagram or Facebook) or on a marketplace, or you may just simply use the VTEX Live Shopping technology;
- Make sure to provide the most comprehensive brand guidelines to a Key Opinion Leader (KOL) or to a Key Opinion Customer (KOC) who (along with their agency) is entrusted with the creation of the content;
- Monitor the performance of live streams using Key Performance Indicators (KPIs) applied for the number of views, conversion rates and products with the highest sales.
2. Medium maturity companies: Make the most of your live shopping experience and unlock new benefits from your ecommerce operations
This strategy may suit your business if you are in the experimenting phase of a regular program of live events which include different products, formats and target audiences. If so, then you should:
- Integrate live streaming into your own store in order to attract and “capture” the customer;
- Monitor the performance of the live stream using real-time predictive analyses to obtain information on the audience, content, products, formats, hosts and calendar;
- Use a dedicated internal team or the agency’s staff to plan and develop content for live streams, including stories, scripts, hosts or influencers;
- Create your own “full-time team” responsible for the management of the live shopping channel;
- Configure automated performance marketing campaigns to generate traffic towards the relevant streams (including retargeting).
3. High maturity companies: The process of growing into a data-driven innovative business
If you already host live streams on several channels, using various formats, targeting different segments of the audience and product categories, then this strategy is a perfect match. Once your business has reached this level of maturity, the next step is to:
- Use the information derived from the analysis, as well as AI learning, to develop real-time automated requests in order to optimize live streams as they are broadcasted;
- Integrate technological innovations into the live streams, such as augmented and virtual reality, to make them more captivating for the audience.
Universal live shopping strategies
However, regardless of the company’s maturity, there are a few things that you should take into account:
Charisma, passion and expertise often go beyond expensive moderators
Live shopping events with celebrity moderators may indeed drive media mentions — but this does not mean that they always have the highest sales and the best results. A well-organized script with a passionate speaker is more important than hosts who exceed the budget, shiny names or PR tactics overflowing with popular names. The host’s authentic connection with their audience is of utmost importance.
Why? Here are some answers:
- Live video content has an organic coverage six times higher than any other social media post, which means that, once promoted, it has all the social media channels’ checklists marked. This allows you to generate several purchases for a lower price, compared to traditional advertising campaigns, as platforms are making a priority out of these streams, thus increasing the user views.
- Through each speaker designated to be the “face” of the broadcast, live streams add a level of authenticity to your brand, one which cannot be replicated. Users tend to make faster purchases when the content is presented by people with a pleasant attitude, rather than buying directly from the brand, as this interaction enables the establishment of a bond between the viewer and the host.
- Live streams have an average viewing period three times longer than pre-recorded videos. The more you can maintain customer engagement, the higher the probability of selling your product(s) is.
- It is in the nature of live streams to create a multitude of social proofs through comments, shares and likes, which generate trust among new users and reduce the sales cycle. This leads to an increase in the conversion rate in the company’s ads.
- Live sales inspire a sense of urgency to the order placement process, as the offers and products presented have a limited-time availability. This urgency cannot be replicated with a post or a traditional announcement on social media. Users are able to see other people making purchases and, if you only have a few products left for sale, they know they have to get it before it runs out of stock.
- These live streams can and should be fun. Users no longer feel like they are “sold to” and the process of buying is entertaining, thanks to this new technology. Live shopping allows brands to tell stories, to improve awareness and to stimulate sales in a captivating manner.
The choice of products and of the target audience should not be underestimated
Once you have decided on the type of live shopping strategy that you want to use, you have to take into account the importance a product has reached in its lifecycle. Do you want to generate instant feedback regarding a new product, sell an older item or give additional impetus to a bestseller?
My notes suggest that live events can be extremely efficient in raising awareness and in generating processes, but less so in strengthening loyalty.
It is noteworthy that many impulsive buyers are one-time buyers; consequently, a newly-drawn audience cannot be also considered loyal — as this will require more work from your side. Similarly, experience has shown that those who purchase using this sales channel often come from a demographic group which is very different from the brand’s typical target group.
To make sure that live shopping draws the consumer segments most relevant for the brand, it is essential to know the audience composition of the brand, what matters to them and how to draw their attention. The use of sources and instruments for analysis in order to understand who viewed your content in the past can help you create “personas” of potential customers to guide your choices according to the target demographics. Generally speaking, Generation X and Generation Z buy — and spend — more in the online environment than other groups, but researching the data on a more granular level is worth it.
There are several key points to examine to make sure that you make the most from the promotion of these live streams, such as:
- Encouraging the host to always start with a captivating introduction of the video. If you have the possibility of editing it afterward, you may do that, as well. When a new user sees this live previously-recorded stream in their stream, you want them to feel welcome. Start by asking who is new here and where they are from, what they like, etc.
- Drawing the audience into the live stream. Constantly ask questions to those who follow you.
- Promoting your live stream after you go live. This is an excellent way to attract new users and to interact with the brand making a much lower investment, as algorithms love these posts. Moreover, they can enter retargeting campaigns and will receive alerts regarding future live streams.
The live shopping format also matters
Consider the following formats for your live shopping sessions:
- Tutorials, such as make-up demos hosted by models, make-up artists or influencers, are efficient not only in showing the audience how to apply or use a certain product but also in suggesting how to combine it with other products, opening cross-selling opportunities.
- Interviews with an important person or with an influencer from a relevant segment feel more personal and more authentic than product launches, and they can be good to improve awareness and to generate traffic.
- Behind-the-scenes videos which offer the inside story of a product or of a company help build brand image and loyalty for a target segment — an ethical fashion retailer, for instance, could present its sustainable supply chain to consumers with an awareness of the environmental and social factors.
Regardless of the chosen format, many successful events include interactive elements, such as games, quizzes and giveaways to keep viewers involved and alert. Obviously, high values must be maintained in the production of photos, in the choice of location, lighting and sound, and you have to make sure that the scripts are not overly focused on the product.
Are you ready to go live?
If you are seriously considering the implementation of a live shopping strategy, our local team will be more than happy to assist you.