Taking Social Commerce to the Next Level With Live Shopping

Marketers have been challenged with the ultimate obstacle in the current economic downturn – increase profitability and focus less on overall growth. Oli Marlow Thomas, Chief Innovation Officer at Smartly.io, discusses how through live shopping, brands can help better their social commerce strategy – improving customer experience and growing revenue streams.

The economic downturn is proving to be a headwind for social commerce outside brand-controlled digital real estate. As marketers are increasingly pushing to focus on profitability over growth, optimizing revenue streams via e-commerce is becoming a top priority. From a consumer’s perspective, they increasingly look to the brands they engage with to become more digitally innovative. This maps to the laser-focus brands have on how they can use the digital space to build stronger connections with audiences across platforms. 

Enter live shopping. While it’s been slower to pick up popularity in the US, its star power in Asia and other regions continues to grow. Data from McKinseyOpens a new window points to live commerce sales accounting for up to 20% of all e-commerce by 2026. And there’s certainly an increasing appetite for it in the U.S. According to 2022 data from Coresight Research, sales from e-commerce live-streaming in the U.S. are expected to hit $25 billion in 2023 and rise to $57 billion in 2025. These numbers are impressive, demonstrating the explosive growth potential, given 2020 saw around $5.6 billion in sales within the U.S.

The Challenge For Social Media Platforms 

Given the growth of these numbers in such a short period, it makes sense that social media platforms desire to control the full purchase funnel and bring live shopping into the fold. Being able to capture a percentage of the actual transaction provides a huge revenue source for them, and it also provides for end-to-end attribution. 

However, in recent months, we’ve seen signs that ownership of the full purchase journey is proving to be a more difficult path for social platforms than originally anticipated. In October 2022, Meta discontinued its live shopping service. Instagram announced they would pull back several shopping features as they design a less personalized product. TikTok has battled reports around the slow down of its live shopping rolloutOpens a new window in Europe – although rumors suggest that the Gen Z favorite is still very much focused on launching live shopping in the U.S.

Getting consumers to move the transaction onto social platforms has proven to be an uphill battle. Social media is used for entertainment, as well as a source of inspiration and a way of connecting with people and brands. However, users haven’t been conditioned to buy directly through these channels. Changing consumers’ habits is notoriously hard and expensive. While social has cornered the market on helping consumers in the discovery phase, the path to purchase is still not entirely clear on social. 

This reality dictates the shift in strategy we’re seeing from these major platforms. What’s also causing this change is the economic uncertainty we continue to face and a renewed focus from social media platforms on their primary revenue source: advertising. 

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An Opportunity For Brands to Arises

The silver lining in this is that it allows brands to make a clean break between user acquisition and the on-brand shopping experience. Moving the live shopping experience from social media platforms into the branded e-commerce space gives these brands full control of the digital and physical retail experience.

For example, Amazon launched a QVC-style live-stream shopping feature in India. Walmart-owned Flipkart tested a similar offering on its app in early 2022. Over the last 14 months, we’ve seen similar branded live shopping efforts deployed not just by marketplaces, but dozens of retailers, department stores and brands – from Macy’s and Nordstrom to eBay, Bloomingdales and Anine Bing.

Building and owning the customer experience on its website and apps allow a brand to experiment in unique ways, bringing a lot of control into the branding, merchandising and experiential aspect of shopping. Perhaps most importantly, it allows brands to fully own the shopper’s data and each shopper’s transactions. Additionally, the opportunity for brands to build one-to-many, but also one-to-one, live shopping experiences will ultimately speed up their transition into the metaverse as they understand customer behavior and see revenue results from their efforts firsthand.  

In the meantime, social platforms can focus on the very lucrative intersection of capturing consumers’ attention and driving them to take action for the brands. That gap between the social platform and a brand’s website or app is increasing, and advertisers who can create the most seamless, full-funnel experiences will see the most growth. 

Brands & Social Platforms: Get The Experience Right

Consumers expect a lot from digital commerce. While live shopping’s popularity grows exponentially, it’s still working on hitting its stride and being translatable in the US and globally. Brands and social platforms alike have some work to do to create a smoother customer experience and journey when it comes to live shopping. Fulfillment, virtual try-on, visual search and branded storefronts need to be iterated and tested to provide the full experience consumers expect. 

Thus far, brands are having a lot of success in both fulfillment and virtual try-on. Widespread distribution centers where orders can be fulfilled and delivered in a matter of hours or branded apps that let you buy products from local stores have been effective. Additionally, as try-on technology advances, more brands, from Amazon to L’Oreal to Wayfair, are incorporating options that let shoppers virtually test out what they want – much like the experience they would have if they were in-person in a store. Social media is getting in on the virtual try-on phenomena as well. As an example, Sapchat’s AR try-on experiences have been seeing a lot of success since releasing in 2021. 

Social media has cornered the market in its visual search capabilities and branded storefronts, i.e., Facebook Marketplace, Instagram Shopping and even creator content on TikTok. Social platforms are great at bringing visual elements directly to consumers’ fingertips, which is a major part of discovery. Couple this with social ads morphing into branded storefronts themselves, and it makes sense why so many consumers turn to social media to find new brands, products and more.

Real success, though, comes where these components intersect as a full consumer experience. This is where social commerce will evolve in big ways. Smart brands are accelerating their partnerships with social platforms to address this entirely new phase in social commerce. Those who can ensure optimal consumer experience in the newly grown space between acquisition and transaction will win.

Besides live shopping, what other strategy can be used to improve social commerce? Please share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedIn Opens a new window . We’d love to hear from you! 

Image Source: Shutterstock

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