E-commerce wasn’t working until livestreaming came along
For The Drum’s latest Deep Dive, The New Retail Landscape, Seen Connects founder Sedge Beswick explores how livestreaming has rejuvenated e-commerce.
Without sounding too ‘Been there, done that’ – when it comes to live stream events – we were early adopters at Asos. During my time leading the social media team there, we ran an earlier iteration of this e-commerce revolution. Albeit a little scrappier than what we’re seeing now.
Ours included live and interactive Twitter competitions. Yes, remember Twitter?
We also coordinated live virtual games of Pass the Parcel and Take Me Out (although the latter was a total disaster!) on our social media platforms. But that was then, and in the seven years since, live events have evolved into something altogether slicker, cooler and oh-so profitable. So much so that Coresight Research predicts that by the end of this year, sales from livestream events will reach $32bn, and by 2026, will account for over 5% of total e-commerce sales.
This contrasts sharply with a retail environment that feels more than a little flat. We’re hearing of super low conversation rates of around 1-2% and basket abandon rates of 90%. People are not finding what they want online. And if they do, about 20-30% return them afterward. But then there are live shopping events. The unicorn of e-commerce. A bastion of hope for brands and influencers.
Although it might seem gimmicky – may I refer you to my team’s earlier experiments at Asos – livestream shopping actually solves a significant customer problem. Although convenient, shopping online can feel boring, impersonal and wholly functional. There’s none of the human access and interaction that stores and social platforms can offer, and in the case of beauty in particular, none of the tailored advice those hallowed beauty counters provide. It’s all just transactional.
This is why we’ve seen so many brands and creators pivot in recent years. To take everything they’ve learned from their social media presence – and combine it with products they really know and believe in. The result is a new e-commerce revenue channel that feels engaging and interactive, like social, but sells products at speed and scale. The result is livestreaming.
So, what do I mean by livestreaming? I mean video content hosted on social media platforms like TikTok Live and Instagram Live or on a brand’s website. Presented by a personality, the content will usually be themed around a trend, product launch, seasonal moment etc. (think of it like a campaign), and when the presenter mentions certain products, the platform will show the product on screen. It will be easily-shoppable for viewers. Chat functionality allows viewers to ask questions in real-time to make their shopping experience feel even more tailored and special.
The success stories are rolling in thick and fast. In one week this summer, make-up artist and brand owner Mitchell Halliday earned $2m selling his Made by Mitchell (MBM) mystery bundles live on TikTok. Flash sales are nothing new in retail. But the power of his personality, the entertainment of not knowing what bundle a customer would get, the unboxing videos that followed, and his deep understanding of his followers and products made his flash sales feel entirely new.
But social media platforms don’t have a monopoly on providing this service to brands and creators. Most of them have lagged behind D2C e-commerce sites. In the UK, beauty brands like Pai Skincare have led the way. Mostly presented by the brand’s founder, Sarah Brown – it has gone live with 65 live shows since 2020, which, like Made by Mitchell’s, now live under a ‘Watch ’tab on its website. And just like MBM, it is being presented by a charismatic personality that embodies the brand and knows everything there is to know about the products – because it created them. That makes them totally authentic and, more importantly, unflappable during a live show. No question could derail them; no accidental deleting of a script would be an issue. And that’s why it works. In fact, by 2021, 10% of Pai’s online revenue was generated by live shopping. And its conversion rate from livestreamed shows? A staggering 17%.
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The tech that enables live streaming is getting better and better, too. Third-party providers like Wonder.live or Bambuser – whose livestream shopping clients include fashion brands like Adidas, Stella McCartney, Net-A-Porter, Fendi and Farfetch – boast four times higher engagement than Instagram, three times longer session time than traditional e-commerce and ten times higher conversion.
There’s no longer the need to question whether the Western markets are ready for livestreaming; it is time to test, learn, go live and sell.