As the e-commerce growth story unfolds, brands have focused on engaging directly with the consumer, a trend that is accelerating. By using the direct-to-customer (D2C) approach, brands have begun to understand user behavior and deliver the right products. The higher the engagement, the more connected a consumer feels to a brand, making them less likely to buy from a competitor.
After social media and direct commerce simplified shopping experiences, you can now shop live online. Live commerce, combining the instant purchase of a featured product and audience participation via a chat function or feedback buttons, is part of this next big leap forward in retail.
In live commerce, e-commerce platforms transform into digital stores by providing a real-time shopping experience to customers through live streaming. Live commerce allows brands to make instant sales in a live streaming environment. Audiences can watch, interact with the host, and shop simultaneously.
In its report, McKinsey & Co said that given the situation in China, sales initiated by live commerce could represent 10-20% of all e-commerce by 2026 worldwide. Live commerce can help brands and marketplaces by adding to their growth stories through increased interactions, connecting with audiences, and providing potential consumers with an immersive experience. Since live streaming can be entertaining and immersive, videos featuring marketing influencers help keep customers hooked to watch longer. Live virtual chats and one-on-one consultation with brand representatives ensure that the audience gets a personalized shopping experience. Pushing unique offers and discounts to take advantage of immediately then brings a sense of urgency, culminating in a purchase. Some brands have seen sales up to 10 times higher through live commerce than through conventional e-commerce.
The benefits of e-commerce include reduced distribution costs, as overhead goes down when products are sold directly to consumers from a warehouse. It also facilitates the order of operations and the processes of receiving an order, creating a label, and expediting shipping to consumers. Interaction via live sessions or video Q&A allows the influential celebrity to act as a salesperson. Product features can best be discussed by explaining how it works, addressing customer pain points, comparing similar products, discussing pros and cons.
While live trading has taken a huge leap forward in China, in India the outlook is positive. While a research report from leading consultancies suggests that live commerce could reach $4-5 billion in gross merchandise value by 2025, mobile and data penetration could take it to 40 billion by 2025.
Regardless of location, live shopping offers high engagement rates. It’s considered one of the best ways to attract Gen Z shoppers. Given their obsession with video formats, live commerce helps create innovative shopping formats and experiences. So everything from health and beauty, fashion and retail, food and drink, found success in a live shopping format. With short-form video gradually becoming the preferred form of content for online shoppers, brands have found the right opportunity to pursue video and live commerce while exploring new avenues.
The author is CEO and co-founder, Primarc Pecan
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