Technology has transformed almost every aspect of our day-to-day lives, from our work and house chores all the way through to entertainment. It has also strongly influenced our behaviour as consumers, changing our decision-making and buying habits.
One of the key technologies that are impacting consumer behaviour today is the adoption of live commerce and shoppable short videos. Businesses are beginning to recognise the importance of engaging their customers across multiple channels and driving higher consumer satisfaction through the use of live streaming and video technology.
In fact, a 2022 study showed that e-commerce platforms experienced a 115 per cent increase in orders from live streaming alone after a large influx of digital consumers from the APAC region. Furthermore, this trend isn’t going away any time soon.
According to a report by Andreessen Horowitz’s a16z, live shopping is expected to triple in revenue by 2026 and account for 20 per cent of all e-commerce transactions.
So what makes live commerce so impactful and effective? The simple answer would be that consumers are looking for “shoptainment”, or an experience that goes beyond a simple purchase and includes personalised and entertaining features to the shopping journey. As Andreessen Horowitz described, “It’s not just a transaction. Consumers seek out personalised and entertaining shopping experiences.”
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There are a handful of key reasons why live commerce is so effective, as shoptainment can be many things, and it certainly brings together several aspects and strategies to meet modern consumers’ demands, such as:
Personalised shopping
Through data analysis and machine learning, technology helps businesses to better understand their customers’ preferences and shopping behaviour. Businesses are then able to offer personalised recommendations and promotions, which can improve the overall shopping experience for consumers.
Therefore it is imperative, in my opinion, for businesses to gain access to first-party data as much as possible. This will enable them to accurately create shopper personas and push relevant content and information. With such personalisation and great sales mechanics, sales conversion would naturally follow.
Instant access to real-time information
At present, the world wide web makes it easier for consumers to research products and services before making a purchase. Consumers can read reviews, compare prices, and research the features and benefits of products online.
However, with the power of live streams, businesses are now able to replicate an almost identical in-store shopping experience virtually. Consumers can ask questions in real-time and live sellers are able to answer them immediately.
Features of the products can be demonstrated, and consumers can make purchasing decisions almost instantaneously. With information at their fingertips, consumers can then make a decision quickly, improving the conversion rates of a live stream.
The possibilities of future technology
The final reason is that technology has endless capabilities. From virtual hosts to metaverses to NFTs, consumers are now being introduced and exposed to various forms of these technologies within the live commerce space. These advancements will eventually be geared towards building a more engaged consumer market who are more loyal and would like to purchase products repeatedly.
It is this final reason that suggests to me that the live commerce space will continue to develop at a rapid pace. Looking ahead, there are plenty of interesting technological developments that would potentially change the meaning of consumer engagement in the years to come, such as augmented, virtual and extended reality (AR, VR, and XR), virtual hosts, and artificial intelligence.
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When it comes to AR, VR, and XR, these technologies allow consumers to see how a product would look on them or in their space before they make a purchase. This changes the entire live streaming experience, where consumers can now do virtual try-ons or “walk” into a store to browse the catalogue in a live stream. This creates an immersive and engaging consumer experience.
While virtual hosts are typically computer-generated characters that serve as hosts or co-hosts of the live stream, they take a variety of forms, from simple characters to more complex avatars that use machine-learning algorithms to mimic human behaviour and conversation.
They can be customised to fit the style and tone of the live stream and are able to interact with the audience through chat or other forms of online communication. In addition to this, they can operate 24/7 and can be replicated across multiple platforms and streams at the same time.
Of course, artificial intelligence has been a buzzword for many years, but it is only now, with the rise of ChatGPT, that we can truly witness the power of AI far and wide, and this, I believe, will be a game changer in the industry.
The power of AI to extract, consolidate, and process key vital information about a consumer would be important for businesses to be able to curate more meaningful and impactful content to convert them into loyal and paying customers. With the abundance of data that is prevalent in a live stream, businesses must harness the power of AI to gain an advantage over their competitors in the space.
In conclusion, while the adoption of live streaming as a powerful tool for brands looking to connect with their audience and build trust and loyalty is gaining momentum, the technology surrounding the ecosystem is developing fast and moving ahead of the innovation curve.
It is imperative for brands and businesses exploring live commerce as part of their product offerings to partner with solutions providers who are able to understand their requirements and bring in insights from having worked with hundreds of implementations globally.
This way, brands across the globe can ensure they are meeting modern consumers’ demands as well as integrating the top technological trends to stand out and keep clients coming back for more.
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This article was first published on April 10, 2023
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