There is a sales method called ” live commerce ” where you can purchase products while watching live videos and exchanging messages in real time using chat .
In particular, in response to the recent outbreak of the new coronavirus infection, it is attracting attention because “you can purchase products while avoiding contact with people and having the same customer service experience as in a real store.”
In 2020, it became a hot topic that department stores and select shops were working on live commerce one after another in response to the corona disaster, and achieved results.
One characteristic of live commerce is that it is compatible with products that show video, such as apparel, cosmetics, and home appliances. If you are a company that deals with these products, you should consider introducing it.
Therefore, in this article, we will introduce what kind of sales method is live commerce, what kind of companies it is suitable for, what kind of preparations should be made, and what kind of distribution services are available.
By reading this article, you can understand the compatibility between live commerce and your company’s products, and how to introduce them.
Live commerce is a method of selling products through live video.
Live commerce is a sales method that combines “live video” and “e-commerce”, and it is a mechanism that allows you to shop while watching a product introduction video delivered in real time.
While avoiding contact with people, it enables a customer experience similar to that of a real store, so it is attracting more attention in the With Corona era.
Although it is a sales method similar to TV shopping programs, live commerce has the feature that “you can exchange messages with viewers in real time using the chat function”.
For example, let’s say you introduce One Piece in a program. In the case of a shopping program, you can only explain the dress one-sidedly.
However, in the case of live commerce, viewers send questions in real time using the chat function, such as “How is it comfortable to wear?” By answering this question, you are communicating with your audience and motivating them to buy.
Even through the Internet, it is possible to sell products while maintaining detailed communication like face-to-face sales.
Differences between live commerce and face-to-face sales/EC sites
In live commerce, you can sell products and services while watching live videos and accepting questions using the chat function.
I compared the characteristics with face-to-face sales and sales on EC sites.
Why live commerce matters
There are three main reasons why live commerce is attracting attention.
- Due to the epidemic of the new coronavirus infection, stay-at-home consumption that avoids going out has become popular
- Due to the increase in the number of people watching the live video distribution
- Because the number of people who use it in foreign countries such as China is increasing
Reason 1 Stay-at-home consumption is trending
One of the reasons why live commerce is attracting attention is that ” nesting-home consumption ” has increased due to the epidemic of the new coronavirus infection .
Stay-at-home consumption is consumption that is completed at home, avoiding going out. Specifically, the lifestyle is shopping online, avoiding eating out and using delivery and catering, and enjoying video distribution and online games.
With live commerce, you shop while watching videos at home. You can also use the chat function to ask questions and receive advice on products.
I want to refrain from going out and avoid direct contact with people as much as possible. However, when shopping, I would like to communicate with store staff and receive advice. Live commerce is attracting attention as a sales method to meet this demand.
Reason 2 The number of people watching videos on the Internet has increased
One of the reasons why live commerce is gaining attention is because more and more people are watching videos on the Internet .
According to a survey of smartphone users conducted by Impress Co., Ltd., 27.5% of the respondents answered that they had more opportunities to watch free videos due to the increased time spent at home.
The percentage of people who cited videos on the Internet, such as “video sharing services,” “video distribution services,” and “videos on SNS,” as their favorite videos/videos, also increased from the previous year’s survey.
As watching videos on the Internet has become a daily routine, it is believed that live commerce using video has been accepted and the groundwork for its use has been further prepared.
Reason 3 It is popular in foreign countries such as China.
One of the reasons why it is attracting attention is that live commerce is already booming in China and other countries.
According to Mitsui & Co. Global Strategic Studies Institute, the scale of the live commerce market in China is expected to reach approximately 14 trillion yen by the end of 2020, accounting for approximately 10% of online shopping. Some distributors make more than hundreds of millions of yen in sales per hour, and if you are developing e-commerce in the Chinese market, you can’t ignore them.
Live commerce is also popular in Thailand and Taiwan. In Europe and the United States, three companies out of GAFA (Google, Amazon, Facebook, Apple), Google, Amazon, and Facebook, have launched live commerce-related services.
There is a good chance that these global live commerce trends will eventually spread to Japan in earnest. Therefore, it is attracting attention from people who want to work on it as soon as possible.
Advantages and disadvantages of live commerce
Live commerce has the advantage that it is easy to convey the appeal of products, it is easy to encourage purchases, and it is possible to obtain hints for product development and campaigns.
However, on the other hand, there are also disadvantages such as it takes time and man-hours, you have to collect viewers in real time, and you tend to rely on the popularity of the distributor.
3 Benefits of Live Commerce
We will explain in detail the merits of live commerce, such as “easy to convey the appeal of products”, “easy to encourage purchase”, and “get hints for product development and campaigns”.
Easy to convey the appeal of the product
The advantage of live commerce is that you can convey more information and appeal the appeal of the product.
Videos can convey information that cannot be conveyed through images or text, such as size, usage, texture, color, and sound.
For example, when introducing clothes on an EC site, you have to convey the attractiveness of the product only with the image of the product, the image of the model wearing it, and the product description.
However, with live commerce, you can see at a glance what it will look like when you wear it and move by having the streamers and models actually wear it. When it comes to comfort, it is more persuasive when the person who actually wears it talks about it.
Easy to encourage purchase
One of the advantages of live commerce is that it is easy to encourage people to purchase products.
Live commerce sells products while communicating with viewers via chat. You can encourage viewers who are hesitant to buy to purchase by introducing the comment “I bought it” sent to the chat and announcing how much it sold in real time.
Some live commerce services allow you to purchase products with just a few taps from the video viewing screen. If you prepare a screen that makes it easy to purchase, the psychological hurdles to purchasing can be lowered.
Here are some numbers to help you find out if it is really easy to encourage people to buy products. In a 2019 survey, 50% of those who watched live commerce said they had actually purchased a product. It can be seen that the live commerce viewers are highly motivated to purchase.
Get hints for product development and campaigns
By communicating with viewers through chat, you can get the advantage of being able to grasp the needs of users in addition to sales.
For example, if there are many questions about sizing, adding an explanation about sizing to the product page on the e-commerce site may increase sales via the e-commerce site. If there is a request for different colors or sizes, it will be a hint for product development. If there is a demand for set sales, we can also make plans for set sales.
Some of the questions and comments received may be negative. In that case, you can increase customer satisfaction by sincerely responding to and improving negative comments.
Live commerce can also be used as an opportunity to listen to users’ voices and create better products and services.
3 Disadvantages of Live Commerce
Next, we will explain in detail the disadvantages of live commerce, such as “it takes time and effort”, “you have to collect viewers in real time”, and “it tends to depend on the popularity of the distributor”.
Time-consuming and labor-intensive
Live commerce requires time, man-hours, and capital investment to distribute live videos.
Specifically, it is necessary to select the service to be distributed, prepare the equipment, and secure the personnel. In addition, you have to choose the products that are suitable for introducing in the video, choose the distributor, and create the script.
Nonetheless, recently there are services that allow you to distribute videos with just one smartphone using an app. There are quite a few cases where the company’s own staff are used as distributors.
If you have the budget, using a live commerce distribution support service is also an option. Depending on the ingenuity, the labor and man-hours can be reduced as much as possible.
You have to collect viewers in real time
One of the disadvantages of live commerce is that you have to gather viewers who will watch the live video in real time.
If it is an EC site, you can attract customers with a long-term perspective using SEO. But with live commerce, you have to gather viewers while you stream your video. What is required is short-term intensive customer attraction.
Therefore, use SNS and e-mail magazines to repeatedly announce the delivery from a few days before the delivery to during the delivery. Especially during distribution, it is necessary to frequently send information such as what products are being introduced and how much they have sold on SNS to attract customers.
Another method is to archive live-streamed videos. There are many examples where products can be sold via archives.
It tends to depend on the popularity of the distributor
Attracting customers and sales of live commerce tend to be influenced by the popularity and name recognition of the distributor (the main character of the live distribution).
In live commerce, celebrities and influencers often appear and introduce products. If the distributor is well-known and popular, more people and fans will watch the distribution and purchase products and services. If you have enough budget, one option would be to ask an influencer to distribute it.
However, even unknown shop staff can sell products and services. If the shop itself has enough regular customers (fans), using staff as distributors will make it easier for viewers to feel familiarity.
Among the success stories, there are examples of success using staff, so let’s increase the number of regular customers in the shop first.
Live commerce use cases
Now, let’s take a look at three cases where live commerce has actually been used to increase sales.
Examples include the select shops Bay Cruise and Ships, and the department store Isetan Mitsukoshi.
General flow when starting live commerce
When actually conducting live commerce, decide on the product to introduce, select a distribution service, prepare the equipment, script, and personnel necessary for distribution, and perform the announcement and distribution. I will introduce each stage.
1. Decide what products to sell
First, decide what you want to sell.
Due to the limited time available for video distribution, we may not be able to introduce all the products we handle. Decide which products to sell.
2. Decide which service to deliver
In parallel with product selection, decide on a live video distribution service.
There are two types of distribution services: the SaaS type that can be distributed on your own site, and the SNS type that uses SNS.
Also, some EC malls offer their own video distribution service, so if you have a store on an EC mall, you should check it out.
Some service providers provide support such as preparing the necessary equipment and arranging broadcasters. If you are new to video distribution, it is safe to choose such a company.
3. Prepare the necessary equipment
We have all the equipment you need for live video streaming.
Video shooting and distribution itself can be done with a smartphone.
However, if you want to make your products more attractive, you need to prepare various equipment such as video cameras, microphones, and lighting to create higher quality videos.
4. Decide where to stream from
Decide where you want to deliver from.
There are three specific examples of delivery locations:
- Studio (rental studio, etc.)
- Real store
- Places where products are produced, such as factories and workshops
Considering the size of the shooting equipment and the number of staff required for distribution, if you choose a place with a certain amount of space, you can shoot and distribute with plenty of time.
5. Decide on a distributor
Next, choose a distributor.
Distributors have two main patterns.
- Celebrities and influencers who have fixed fans and have a great influence on fans
- Shop staff, buyers and producers
For live commerce, the existence of distributors who can introduce products attractively is indispensable.
41% of those who used live commerce cited “I want to buy products introduced by sellers” as a reason for using live commerce. Make sure you have someone that your audience will find attractive and want to buy the product that this person introduces.
However, it is not always the case that you should appoint a celebrity. There are many successful cases of hiring people who know the product well and can convincingly explain its appeal, such as buyers.
What you should focus on when deciding on a distributor is how passionately you can talk about the products you introduce. Live broadcasts cannot be edited. In order to convey the appeal of the product and stimulate the willingness to purchase, choose someone who can convey the goodness of the product with enthusiasm.
6. Create a script
Decide the content of the distribution and make a script.
If you introduce without a script, you may run out of time for the live stream. Decide what you want to introduce and how long it will take. Don’t forget to set aside time to answer questions from your audience.
Once the script is ready, it is safe to rehearse it many times before the day of distribution to brush up on the content.
7. Decide and announce the delivery date and time
We will decide the distribution date and time and announce it using SNS and e-mail magazines.
Repeat announcements. Especially in the case of social media, announcement posts can go unnoticed among other posts. Please post multiple times on different days of the week and times. Even when notifying by e-mail, it would be good to deliver it several times, such as one week before the delivery, three days before, the day before, and the day.
If you ask a talent or influencer to stream, the fans of the streamer will also come to see the announcement from that person.
8. Go live
When the distribution date comes, we will do a live distribution.
Before going live, rehearse and be prepared. If you have an SNS account, try to attract customers by posting announcements just before and during the distribution.
As mentioned in the live commerce success story, you can also sell products from archived videos. Keep your videos archived and public if possible.
Three types of live commerce distribution services and their characteristics
There are three types of live commerce distribution services: EC mall type, SNS type, and SaaS type . I will introduce each feature.
The information compiled this time is based on information as of January 2021.
EC mall type such as “Rakuten LIVE”
The EC mall type is a live commerce distribution service provided by an EC mall. A typical example is Rakuten Ichiba’s “Rakuten LIVE”.
Rakuten LIVE can be broadcast easily with just one smartphone using the app. If you are a Rakuten Ichiba shop, you can conduct live commerce using the live shopping function.
If you are opening a store in an EC mall, first check if the EC mall you are opening has a live commerce function.
SNS type such as “Facebook” “Instagram”
This is a method of live commerce using the live distribution function of SNS.
If you have a social media account and already have a certain amount of followers, you should consider this distribution method.
Instagram has already implemented a live video distribution function called “Instagram Live (instalive)”. Many shops use Instagram Live to introduce their products and services.
Facebook also has a similar live video streaming service. If you run a corporate account on Instagram or Facebook, you should consider it.
However, as of January 2021, neither Facebook nor Instagram have yet implemented a system that supports live commerce. You can only deliver a live video of the product introduction, but you need to introduce your own EC site for the purchase itself.
However, both Facebook and Instagram announced in May 2020 that they would implement live commerce functionality in the near future. It’s a good idea to build an audience that will start using it now and become familiar with the features so that you can take advantage of live commerce right away when you implement it.
SaaS type such as “TAGsAPI”
The SaaS type is a method of delivering live commerce on your own EC site.
The SaaS type is a method for shops that have attracted a certain amount of customers to their EC site. Major companies such as Isetan Mitsukoshi Holdings, Ships, Beams, and Bic Camera also use this method.
Typical SaaS-type services include Moffly’s “TAGsAPI” and STARP’s “LiveKit”.
Some companies that provide SaaS services also provide support for content production, shooting, and distribution. It is recommended for shops that want to use live commerce videos as content on their own EC site while receiving a thorough consultation.
Summary: Check out live commerce if you want to spend your time at home
Live commerce, which is a sales method that utilizes live video, is particularly well-known among people in their teens and twenties.
In 2020, in response to the epidemic of the new coronavirus infection, it was introduced at various retail stores and achieved results in response to the growing demand for stay-at-home shopping that allows you to shop at home.
Streaming live video can seem daunting, but some live commerce streaming services can help.
In addition, there are companies that use an app to enable distribution with just one smartphone.
If you are a company that handles products that are compatible with live commerce, such as apparel and cosmetics, why not try it?
