Authored by Mike Sloman, Business Development Director at Arvato CRM Solutions
15 hours. That’s how long consumers on average spend purchasing a new car1, and how long brands need to battle to keep them engaged.
Social media is playing a critical role in helping automotive firms tackle this ‘consideration challenge’. Done well, it drives user engagement and slashes the distance between the point of inspiration and the point of sale, ultimately increasing conversion rates and boosting sales.
Implementing ‘live’ elements in social feeds – displaying and selling vehicles through livestreams on social platforms – takes this to a whole new level.
It’s a strategy that’s already being used to great success by retailers, and one that automotive brands can, and should, benefit from too.
What is livestream social e-commerce?
At its heart, livestream social e-commerce involves influencers – known in Chinese markets as ‘key opinion leaders’ (KOLs) – promoting or selling a brand’s products to audiences online through live video streams, hosted either on a retailer or influencer’s social media platforms.
Through their video sessions, KOLs bring the products and brands to life.
In a retail context, they provide tutorials on how to apply a certain brand of make-up, offering their own running commentary on the item’s look, feel and ease of application. They try-on clothing in real-time, styling it with their own wardrobe. Or, they test out home appliances for durability, ease of assembly and ease of cleaning.
It’s being used globally, and to great effect. As far back as 2019, Swedish make-up brand CAIA Cosmetics started providing live make-up tutorials – the first iteration of which delivered a conversion rate double that of its website.
And, in an entertaining twist, pet supplies giant Petco saw a 12% uplift in traffic to its website after launching a livestream canine fashion show.
It’s a format pioneered on television by the likes of QVC and the Home Shopping Network – now adapted and re-born for a digital age.
Why does it work?
What retailers are unlocking through livestream social is an infinitely more engaging format than a simple video or static social post.
The key ingredient is the human touch.
Through the livestream, viewers get the chance to see a product in a real-world context that can often be difficult to emulate in simple social static or video.
They can often interact with the host – asking them to demonstrate specific features of a product in real time, and have questions answered immediately.
All the while, brands benefit from the influencer’s associated prestige and expertise, gaining trust from would-be customers through their association, as well as driving initial engagement – factors that help capture interest, and nurture this through to a final sale.
From a structural perspective, livestream social also narrows the gap between the customer’s point of inspiration and the point of purchase. Embedded ‘buy now’ buttons on the livestream pages themselves mean a customer has only to make a single click to go from ‘shelf’ to ‘checkout’. This reduces the risk of attrition through an overly lengthy sales processes, and in turn increasing conversion rate.
What does it mean for automotive?
In the automotive sector – as with retail – the days of a purely brick-and-mortar (or showroom) based sales journey are over.
Today, nearly two thirds of UK car buyers would buy a vehicle online, rising to more than three quarters (77%) of millennials and 80% of high-earners2. Social media is playing a major part in their purchasing journey – as many as eight in ten (82%) UK car buyers say it is a channel they use in those decisions3.
Engagement is one of the biggest challenges that brands need to tackle online. Another is bridging the information divide.
As the 15-hour consideration time belies, buying a car isn’t usually something done on a whim. Potential buyers will do their homework – on everything from price to efficiency and safety record. But there comes a time when they will want to see it for themselves and have their specific questions answered – a factor that will be particularly important for more unfamiliar types of vehicles, including electric cars.
Livestream commerce helps tackle both – with the added advantage of associated prestige and authority that the right influencer can impart.
Some automotive brands are already seeing the benefits. In China, in part spurred by the showroom-shutting constraints of lockdown, brands such as electric vehicle manufacturer Nio have stormed onto social platforms with livestream events.
Nio’s own livestreams have showcased, in real-time, what the brand’s assisted driver capabilities can do, and even taken viewers to one of the country’s coldest regions to showcase how the car performs, in real-world conditions, in extreme weather4.
One of Nio’s livestreams alone generated 320 vehicle orders, totalling $18m (£15.2m) in revenue and resulted in more than 5,000 requests for test drives5.
Sales in the fast lane
Many automotive brands will already be benefitting from a social media strategy – both in terms driving proactive sales, managing reactive concerns or questions and building brand loyalty. How to successfully deliver this is something that we’ve explored in depth in our ultimate guide to automotive social media customer service.
Considering adding livestream e-commerce opportunities could take their business and their customer experience to the next level, delivering the all-important engagement, product knowledge and trust that is critical to automotive sales, while also significantly condensing the customer journey.
To learn more about how our experts can help you deliver social media CX strategies that keep your brand ahead of your competitors, contact us today by emailing: CRMSE@arvato.co.uk.