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Dubai: If it’s an increasingly popular way to earn an extra income from the comfort of your home, you would be all eyes and ears in wanting to know more about it. So then it would interest you to know why it’s worth considering the risks and perks of making money through ‘live commerce’.
Live shopping is still a fairly new and trendy way of shopping online that combines the originality of live video with the ease of e-commerce. By watching live shows from your favourite brands, getting recommendations, and making purchases on the spot, popularity of the medium continues to soar.
Live shopping generated $450 billion (Dh1.7 trillion) in global sales in 2022, statistics show. Livestream shopping started on social media in China, and as per US-based retail and tech data analyser Coresight Research, has grown into a $512 billion (Dh1.9 trillion) global market.
Also referred to as ‘live stream shopping’ or ‘live selling’, live commerce is transforming the retail industry and established itself as a major sales channel in less than five years, with recent surveys revealing that two-thirds of global consumers having bought products via livestream in recent years.
The main difference now is that the medium isn’t the television anymore and is the smartphone instead; the communication is two-way and the hosts are social media influencers. The live streaming shopping events, usually 45-60 minutes in length, often take place in online store portals.
But how does live shopping work? An influencer or a company expert introduces products and buyers have the opportunity to add them directly to their shopping basket and buy them during the event. The consumers also have a chance to communicate with the influencer or expert on live chat.
Live shopping is not always rewarding
Live shopping is most used for buying apparel, fashion, beauty products and food, statistics reveal, with more than half of all internet shopping traffic or digital footfall sourced from a mobile device, so it’s proving prudent for retailers to take advantage and cater to this growing need of shoppers.
“Like all money earning mediums, it is realistic to monetise your live streams, but what is often overlooked as how much time and effort it takes to keep an audience engaged,” said Dr Khalid Essaye, an Abu Dhabi-based retail researcher specialising in consumer spending.
“A quicker way to earn money streaming is to charge people for access to your livestreams, or even join affiliate or partnership programs, but the e-community is proving time and again that selling a product or service in a live stream and making good money from doing so is still indeed possible.”
While cosmetics and fashion companies have been the first to adopt the concept in the UAE, experts evaluate how the trend is rapidly expanding to other areas, such as car retail and real estate, and into home-based businesses.
“Affiliate marketing with livestream shopping means no annoying redirecting links, and no more browsing for the desired items. Customers can see all the displayed goods laid out in front of them in a clickable format, ready to be put in the shopping cart and checked out right away,” Essaye added.
“With no need for the consumer to leave the stream, the buyer’s purchase journey is cut short and this drives up sales. Actually, according to recent reports, purchase rates at livestream events can easily go up to ten times higher than what traditional e-commerce approaches can achieve.”
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How does live commerce create value?
While ‘live commerce’ combines the perk of being able to instantly purchase a featured product with audience participation through a chat function or reaction buttons, live commerce can help brands, retailers, and marketplaces primarily in two areas.
According to a recent research note put out by global management consultant McKinsey & Company, “live commerce keeps viewers watching longer… and it also minimises customer decision journeys from awareness to purchase.
“Time-limited tactics such as one-off coupons can be used to generate a sense of urgency. Companies report conversion rates approaching 30 percent – up to ten times higher than in conventional e-commerce,” the authors of the report detailed.
“Done well, live commerce increases a brand’s distinctiveness and pulls in additional web traffic. It can attract new ones, especially those keen on trying out new shopping formats and experiences. Some companies are seeing their share of younger audiences increase by up to 20 per cent.”
“When customers purchase through your own website, you have access to their data, including their contact information, purchase history, and browsing behaviour. This data can be used to create targeted marketing campaigns, improve customer experience, and make data-driven decisions.”
Bottom line: How profitable is it to host live shopping events?
If you’re a relative newcomer to hosting online shopping events, you can start selling online by purchasing just a Dh400 to Dh800 worth of inventory, or less, home-based online sellers worldwide widely flag as a starting step towards profitability, to which Essaye agreed.
“Starting out your first year, that if you can make $10,000 (Dh36,732), you’re doing great.. But don’t quit your day job when starting out. Many such businesses were built on resale inventory bought by thrifting at flea markets, second-hand stores and the like,” said Essaye.
“You need to have an eye for finding bargains and pricing items for sale. New sellers should avoid overhead, such as having a brick-and-mortar location. Doing live shopping events from your home is a low-risk way to start.”
A word of caution, however, is that while some live streaming shopping ventures have proven to be ground-breaking, Essaye warned that there are many that have ended up fizzling out once it loses its initial charm.
“One of the tests for micro retailers or home businesses like livestream shopping businesses today is to be able to cut through the clutter and noise of every technology that is available at the tip of their fingers and employ what suits their business best,” he added.
2. Check your tech. If you’re doing video streams using your laptop and you notice aesthetic issues, you may need to start using smartphone with attached lighting to get a better look.
3. Consider flea market sales for in-person opportunities to sell merchandise, gain exposure for you and your products and get real-time feedback from potential customers.
4. Explore online vendor shows. These virtual vendor events are often connected to a regional or national conference or trade show in most countries worldwide.