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How Live Shopping Boosts 5 Core Ecommerce KPIs

Live shopping shouldn't be looked at as a nice-to-have. With real impact on key retail metrics like AOV, conversion rates, LTV, return rates, and cart abandonment, it's time to give live video shopping some serious consideration.
GhostRetail

It’s happening: Livestream shopping is heating up in North America. According to one survey, over half of U.S. shoppers have attended a livestream shopping event at least once, with nearly 1 in 5 shoppers saying they use them ‘a lot’ and 22% saying ‘sometimes’.

The real question from here is whether livestream shopping is the future of ecommerce, or just a passing trend.

Obviously as a live shopping platform, we believe in the power of bringing a human touch to the online shopping experience. But apart from the feel-good vibes that come from co-shopping with another person online, we’ll put our money where our mouth is and talk about how live shopping can help solve some of the main problems and KPIs retailers are constantly trying to improve upon.

What is video powered retail?

Live video shopping takes what is typically an ‘uncrewed’ experience, such as browsing an ecommerce website, and adds real human bodies to the mix to interact with and sell to shoppers on a one-to-many or one-to-one basis.

GhostRetail is a live video shopping platform that specializes in facilitating one-to-one video co-shopping. A live personal shopper and customer can browse a retailer’s website while seeing each other on video, giving the customer a chance to see a physical store location, or the products a brand carries.

In turn, the live shopping associate can see their customer and the space they occupy. This can be valuable if morphology, skintone, wardrobe, hair color, or some other physical characteristic is clutch for helping a customer find the right product. Same goes for spaces. Customers can’t bring their living room or their boat to a retailer. Live video shopping allows the shopper to bring the store to their space.

A one-to-many shopping experience differs in that it's more about a single host or number of hosts broadcasting a live shopping event and sales pitch to a captive audience; one who typically can't interact with the host or other viewers, other than through a chat function.

Think of one-to-many live streaming shopping as the equivalent of a modern-day QVC or Home Shopping Network experience. This kind of live shopping event is the type of experience you might have seen with social media platforms such as Instagram Live shopping, Facebook Live, YouTube TV, or Amazon Live, with shoppable livestreams attended by diverse audiences.

In contrast, a one-to-one live shopping call is like simulating an actual retail experience, with a personal shopper to guide the customer through to checkout.

Goal #1: Conversion rate optimization

The average conversion rate on an ecommerce site is a paltry 2.8%. Of course, this number fluctuates wildly based on:

  • Geo-location
  • Source / channel
  • Industry / sector
  • Seasonality
  • Device

For example, higher conversion rates might be expected for brands with both a retail and online presence in a specific geographic market, as shoppers will have had more exposure to the products in person, or at least walking by, than they would have with a strictly digital brand.

Ecommerce marketers and managers have tried to improve ecommerce conversion rates with a wide number of strategies, including, but not limited to:

  • Segmentation
  • Personalized recommendations
  • Checkout optimization
  • Promotions
  • Loyalty programs and incentives
  • Site performance optimization
  • A/B testing
  • New sales channels
  • Enhanced product detail pages (PDPs)
  • User-generated content (UGC)

To be clear, all of these are viable, if not critical parts of conversion rate optimization for any online brand. But there are many unseen conversion gaps that retailers aren’t as easily able to solve for, some of which can be aided by offering live video shopping.

Specifically, live video commerce can help convert more customers by:

  • Showing or speaking to what products are available in store
  • Answering questions that can’t be solved by existing UGC or product info
  • Providing recommendations for specific use cases, preferences, or needs
  • Suggesting alternative products when a desired item is out of stock
  • Guiding the shopping experience for customers who aren’t comfortable shopping online, or simply don’t know what they need

At GhostRetail, we’ve seen conversion rates on connected call skyrocket to as high as 40% - about 20x higher than your typical customer. While shoppers that get on a call could be considered higher intent, in many cases, that call is really the tipping point that’ll get a customer to go from consideration to conversion.

To think of it another way - if you aren’t offering live stream shopping support, how many customers are walking away when they could’ve had their questions answered and doubts resolved within a call?

Goal #2: Boost average order value (AOV)  

After driving more conversions, the other big top of mind metric for retail marketers and merchandisers comes down to increasing the basket size - ideally with more items sold per order, with more revenue collected.

These are some of the standard tactics retailers are employing to drive bigger average order values:

  • Cross-sells and upsells
  • BOGO promotional offers
  • Free shipping thresholds
  • Discounts and sales
  • Product bundles or kits
  • Post-purchase incentives
  • Luxury or premium products / collections

Again, all of these are valid ways to boost AOV and should be considered as part of a strategic merchandising approach. The main difference is these are general offers that typically apply to all shoppers, or at best, segments of shoppers for brands that have invested in a segmentation engine or DXP.

How does live video shopping boost average order values? In a one-to-one live video shopping setting, the live commerce associate acts similarly to a personal shopper would in a store. They listen to customer questions or needs, and use their product knowledge to suggest the ideal product.

Not only that, the live personal shopper has the opportunity to organically suggest items a shopper might be interested in based on their stated preferences. For example, a live personal shopper could style an entire head-to-toe look for a customer, or they could recommend a new arrival, or even just suggest an add-on accessory that’s a total must-have for peak enjoyment of whatever they’re interested in. Hello, additional online sales.

Personalization tools that offer product recommendations attempt to offer this type of service at scale through AI-generated automation. But where the typical AOV increase from these types of systems is around 5%, live personal shopping has shown to regularly boost AOV by 50% - a 10x increase.

Personalized recommendations have become a table stakes feature on modern ecommerce websites - failure to incorporate or deploy them effectively is a clear case of leaving money on the table. But with 10x AOV improvements through live video shopping, imagine how much more revenue is simply being lost by not having this service in place.  

Goal #3: Minimize returns

While ecommerce adoption skyrocketed over the course of the Covid-19 pandemic, so to did online return rates. In 2021, retailers saw over $218 billion in ecommerce returns, at a rate of 20.8% of goods sold.

No matter what ecommerce merchants do, the online return rate will likely always be higher than in-store, largely because there is simply missing information when a shopper buys something they cannot physically interact with, particularly in the apparel industry. On top of that, the intent level is higher. For example, potential customers might view ordering online as the equivalent to bringing items into a dressing room - just as it’s unlikely they’d keep every item they try on in a store, it’s equally unlikely they’d keep every item they ship to themselves to try on.

Despite that, retailers have begun looking for ways to shrink their return rates, including:

  • Optimized PDPs with improved product images, as well as videos and 3D graphics
  • UGC reviews, Q&As, and images
  • Detailed size charts, measurements and predictive sizing tools
  • Providing personalized recommendations
  • Charging customers for returns

Offering a live shopping experience is another no-brainer to add to this list. While AI-based tools can help customers hone in on the right decision, there will still always be gaps. What if a product has no or limited reviews? What if none of the reviews match a customer’s exact morphology? What if a size recommender selects a size the customer feels is wildly off-base? How will they know if a product is right for a particular physical activity? Will they be able to use a product to accomplish a specific task?

All of these questions speak to some of the main reasons why online shoppers return items:

  • Size
  • Color
  • Fit
  • Function
  • Quality
  • Unmet expectations
  • Broken or defective item
  • Wrong item sent

The good news is many of the most common reasons for returns can be mitigated in a one-to-one live video call. Shoppers can get tailored advice on what the right size is for them, as opposed to buying two of the same item and returning whichever one didn’t fit. They can talk through the function of an item to make sure it’s appropriate for their desired use. The consumer can see an item from any angle, ask questions about the care or maintenance, and even get product demos.

While return rates vary a fair bit by industry, the average return rate of products bought during a live video shopping call is typically around 4.5% - about 4x lower than the industry average return rate.    

Goal #4: Reduce cart abandonment

If retailers could capture every last abandoned cart, trillions of revenue would be ‘recaptured’. Nearly 70% of online shopping carts are abandoned, and brands everywhere would love to have at least some of that revenue return to them.

Of course, a good portion of abandoned carts may never be converted. Shoppers might balk at the shipping costs or policies, or realize an item can’t be shipped to them based on their geographic location. Many others might add items to cart only to forget about them, or to use them as a bookmark for comparison to another product they’re looking at elsewhere.

Regardless of why shoppers leave their baskets behind, these are just some of the typical strategies merchants leverage to turn those prospects into purchases:

  • Abandoned cart emails
  • Abandoned browse emails
  • Remarketing / retargeting ads
  • Exit intent pop-ups
  • Limited time conversion offers at checkout
  • Optimize the checkout experience
  • Offer multiple payment options, including virtual wallets and installment payments
  • Reduce the desire to ‘search’ for deals and coupons on other sites
  • Let shoppers check out as guests
  • Remind customers of what’s in their basket and give them the option to edit it
  • Clearly present information about shipping and return policies prior to checkout

Live shopping is a simple way to reduce cart abandonment on two counts. For one, much like live chat, shoppers can ask key questions and get answers in real time. But live video co-shopping is a wholly different experience; one that feels more interactive and personalized to an individual shopper than a mere chat (and definitely moreso than engaging with a chatbot). Simply getting the answers they’re looking for can be enough to turn many on-the-edge shoppers into buyers.

For another, live video shopping can reduce cart abandonment because the cart is built within a live shopping call. Customers can check out within a call, and associates can provide incentives to do so - ones that literally can’t be found on the website otherwise. If a shopper still wants to browse on their own, their cart will still be retained.

Finally, live video shopping can factor into any cart recovery strategy. Offering the chance to get on a live shopping call in browse or cart abandonment emails is a smart way to get shoppers re-engaged and motivated to actually hit checkout.

Goal #5: Improve customer LTV

As customer acquisition costs (CAC) continue to rise, retention is moving more into frame for retailers, especially mature brands with higher name recognition. With more online shopping platforms come more online stores, creating larger selections for shoppers. The more selection, the more opportunity for a retailer to lose their customer due to having too many options.

LTV is ultimately about sustaining a long-term relationship with customers and enticing them to come back again and again. Some commonly deployed ecommerce LTV and retention strategies include:

  • Offer a loyalty and rewards program
  • Provide special incentives on a customer’s birthday or anniversary
  • Give personalized recommendations and content
  • Email marketing
  • Upselling to a subscription
  • Membership programs
  • Cross-sells and upsells
  • Offering omnichannel shopping experiences
  • Improving customer service

Live personal shopping crosses many of these points. Customers are given access to a personal shopping service that improves their experience, can drive higher basket sizes within a single session, and builds a stronger personal connection to the brand. That connection is what keeps shoppers coming back time and again, layered on top of the other great services, programs, and promotions offered by a retailer.

Why offer video commerce?

The answer to this question should be pretty clear by now. The main reason to offer live video shopping is to drive key performance metrics for retailers, including:

  • Boosting conversion rates
  • Increasing average order value
  • Reducing return rates
  • Reducing cart abandonment
  • Improving customer LTV

There are other softer metrics and benefits of offering live video shopping as a channel however, including:

  • Building brand affinity and loyalty
  • Reducing customer acquisition costs through word-of-mouth reputation
  • Improving time-on-site metrics in either direction; shortening time for customers who need help finding what they want, and extending time for customers who may have otherwise bounced

Wondering how to get started with live video shopping? We’ve got an entire guide dedicated to it. Or, book a call with us to see a walkthrough of the GhostRetail platform and how it can help accelerate your retail business goals while providing an exceptional customer experience.

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