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The Efficacy Of E-Commerce Live Streaming In Influencing Purchasing Behaviour

InsightzClub (a technology driven consumer insights platform) examines key trends and drivers of e-commerce live streaming across several studies

Live streaming on e-commerce platforms, known as live commerce, has seen a major boost in the Chinese market. Online stores like Taobao and Alibaba have spotlighted the role of live commerce in shaping consumer purchase decisions, in the ongoing pandemic and looking to the future of shopping behaviour. Live streamed videos regularly attract millions of viewers, for content ranging from unboxings and reviews to official product launches. The inability to shop in physical settings has also accentuated the impact of live streaming

InsightzClub (a technology driven consumer insights platform) examines key trends and drivers of e-commerce live streaming across several studies.

The core of marketing is human interaction. Customarily, shopping has revolved around this principle. Along with the advancement of online shopping comes this void in personal exchanges. The challenges seem to have been largely overcome by the rise of live commerce. 

Users of online shopping platforms have described it as a problem solver. It is therefore viable to assume that live streaming can be solution for inadequate information surrounding a product offering. Sellers can educate potential customers in a variety of ways. The individual’s need for information is there from the get-go, we want to make educated purchase decisions! By gaining access to both personal and informative videos this need is satisfied which may indeed incur a positive purchase decision. Make up sellers are prime examples of using such a strategy.

The potential degree of engagement is much higher with live streaming as compared to static videos. While watching hosts review a product, users may interact in a myriad of ways. Social connections are formed between the buyer, seller, and prospective buyers. It suggests of the removal of barriers otherwise prevalent in other forms of media.  

Loyal customers spend as much as 67% more than new ones. Furthermore, acquiring customers is a costly exercise by 5 to 25 times. 

Immersing individuals into a shopping experience may be understandably challenging in a digital setting. Reliance on our senses to inform our purchase decisions can inhibit a sense of immersion and realism. Live streaming replaces perceived realism of the experience because of hearing, seeing, even speaking to the seller. Research has shown that customers can feel more positively towards an offering while immersed, directly inducing purchase decisions.  

Informal means of communication among users make individuals feel a part of a tightknit group sharing a similar experience. A curious factor is the integration of memes as key in meaningful interactions, particularly in millennials and gen-z. Aside from this, general peer pressure from fellow stream watchers could be another prompt for purchase decisions. It is often that purchases are made in bulk during live streams, in one instance 15,000 lipsticks being sold in just 5 minutes. Live streaming thus solves another crucial consumer need – for belonging. 

Customised experiences have become the cornerstone of any modern-day marketing effort, and for good reason. Generic and impersonal efforts come off as ingenuine – they simply do not drive sales. Despite the ease of implementation through collecting large amounts of data to target consumers and its inherent success, consumers are becoming desensitized to regular personalization efforts. Adding a personal interactive layer of the already personalized efforts of e-commerce platforms could act to mediate this myopia.

Thorough analysis of the reasons for the impressive effectiveness of live commerce and its influence on purchase decisions by building a sense of immersion, engagement, and personalization; live streaming will only become an even more dynamic medium to incur positive purchase decisions. 

To find out more about live-ecommerce trends and its impact on consumer behaviour reach out to InsightzClub.

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Padmanabhan Ramaswamy

Cofounder of InsightzClub, an agile tech enabled platform for consumer insights. Padmanabhan has more 14 years of experience in consumer insights, analytics and data science and ecommerce while working in leadership roles at Rocket Internet/Lazada, Hong Leong Management Group, Nielsen and IPG Mediabrands. Follow him at InsightzClub and on Facebook.

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