Authored by Parham Saebi, Customer Service Solutions Director at Arvato CRM Solutions UK
Livestream e-commerce is a channel that has exploded in popularity in China – the world’s largest e-commerce market – and could provide UK brands with a new and powerful way to engage and interact with customers online.
What does it entail, and how could it benefit brands in the UK?
Video e-commerce in China – the rise of livestreaming
Livestream e-commerce has become a central element in Chinese retailers’ strategies over recent years, and it is only expected to continue growing in prominence. According to news agency Xinhua, the number of e-commerce livestream users in China had reached 265 million by March 2020 – almost 30% of the country’s total number of internet users(1).
While its success has been spearheaded by the country’s leading e-commerce sites, such as Alibaba-owned behemoth Taobao, a number of other online platforms have since taken their own steps to implement livestream-based retail, including Douyin, a Chinese sibling of TikTok, and its competitor Kuaishou.
At its core, livestreaming involves influencers, known as ‘key opinion leaders’ (KOLs), promoting or selling a brand’s products to audiences online through live video streams, hosted either on e-commerce platforms or through third party social media sites.
KOLs can try-on clothing live to demonstrate fit, present make-up tutorials using a range of selected cosmetics products or show how household appliances can easily be assembled or disassembled for cleaning – ultimately displaying products in a ‘real-world’ context often difficult to emulate through a traditional ‘picture and description’ listing on a retail website.
Through live-chat functions, hosts can interact with their audiences in real-time, answering specific questions on products as and when consumers ask.
And, once they’re ready to buy, customers can simply click a button to purchase the item on offer.
Simplifying the buying process
Livestreaming has a number of distinct benefits for retailers – primarily enabling brands to drive customer engagement, front-end customer service, improve real time sales conversion opportunities and significantly shorten the customer journey.
The nature of the livestream format contributes to a more compelling online experience, allowing retailers more influence in the customer decision-making process by creating an interactive experience with the help of the host.
It also means brands can leverage audiences’ trust in influencers’ taste. In China, influencers can curate product selections before taking them to their fanbase, often with a significant discount. Their perceived discernment, coupled with the relative transparency livestream offers through video and chat and a competitive price point, helps drive consumers to sales.
On top of this, the architecture of the online platforms mean brands are able to bring the point of ‘inspiration’ – where customers are introduced to a product – as close as possible to the online ‘checkout’. This reduces the risk of a shopper being distracted before they have a chance to complete a purchase.
Together, factors like these are generating impressive results. Taobao has reported sale conversion rates of as much as 32% through its livestreams(2).
What could livestreaming mean for UK retailers?
While some Western e-commerce platforms, such as Amazon, have begun to roll-out livestream offerings on their sites, it is yet to achieve the same rates of engagement and scale as it has in China.
The sharp growth of online shopping in the UK however, will likely drive adoption. From a customer experience point of view, it may help create a key differentiator to stand out from the competition.
Enabling consumers to really get to know a product online and receive replies to their questions about its strengths and benefits could help drive greater brand loyalty – as well as revenue.
Meanwhile, a shortened customer journey could enable retailers to boost sales conversion by hosting the point of inspiration and sale all in one place.
And, from an operational point of view, minimising the risk of returns by using influencers to demonstrate a product live on screen and answer common questions or provide user hints and tips, could help make the ‘last mile’ of logistics in e-commerce more efficient and more environmentally friendly for retail brands.
The retail landscape is changing, and retailers will need to adapt to remain ahead of the curve. Using video e-commerce pathways could provide those in the UK market with new ways of delivering experiences to customers and open up new revenue streams.
Find out more about how the retail sector is adapting and making the most of new opportunities and technologies in our ‘What’s in store for retail?’ report