A Study of Livestream Shopping’s Role in the Customer Journey

Abstract

Livestream shopping is a form of commerce and marketing that combines entertainment, interaction, and product introductions. Following live commerce’s boom in China in 2019, many US brands and platforms have also eagerly started experimenting with this new marketing format, however with lukewarm success at best even with the impact of COVID-19. To understand why it became so successful in China, apart from external reasons such as COVID-19, 5G infrastructure, smartphone and mobile payment penetration, an analysis of livestream shopping’s role within a customer journey using the AIDAS model was conducted with case studies. It was found that in pre-purchase stages, when used along with network targeting and multi-channel marketing, shopping livestreams can be extremely effective in spreading awareness and arousing interest. The key is to leverage learnings from big data to design and recommend content and streamers best aligned with the characteristics of the targeted audience and the platform, as well as the brand image. Then, as the audience either is already interested in the product or have trust in the KOL, it is easy to stimulate the impulse to purchase with coupon, lowest price guarantee, scarcity marketing, conformity, and FOMO. In the purchase stage, capabilities that allow customers to easily complete order placement without interrupting the livestream is key to high conversion rate, which means e-commerce platforms have a natural advantage as they already have access to customers’ payment information, eliminating an extra step of barrier. While advocacy comes naturally with livestreaming’s social and word-of-mouth nature, satisfaction is the weakest link of this form of marketing, as concerns over quality and after-sales services worry at least 50% of customers who are unwilling to adopt livestream shopping. While livestream shopping is forecasted to grow rapidly within the next few years in the US, it is also forecasted unlikely to be mainstream like it is in China due to post-pandemic mentality driving people to shop offline, less mobile payment and 5G coverage and different shopping habits, but monetary incentives, tailored content, multi-channel marketing, integration with payment, in-live shopping capabilities, and trustworthy aftersales services can drive livestream shopping growth in the US.