3 Reasons Why Social Live-Streaming Shopping is the Future of E-commerce

The fantastic growth rate of e-commerce during 2020 is a signal that change is coming faster than expected to our beloved industries. Whether we like it or not, the retail transformation is irreversible and permanent. But while we are adapting to this new normal, what can the future of e-commerce surprise us with? In my view, the future belongs to live streaming shopping over social channels.

Exactly when the first millennials were born, at the start of the 80s decade, HSN (Home Shopping Network) started to innovate on cable TV. Founded by a former DJ who started selling can openers on live radio, HSN pioneered a televised sales pitch for consumer goods. Credit cards and QR codes payment systems sustained this bizarre industry. So much that in 2020, if you turn on your TV during day-time and check generic stations, you might be able to watch TV-shopping in its awesomeness.

HSN Live from Herkimer Diamonds on Tuesday
HSN Network

But no one talk about this in the world of marketing. In our bubble, in 2020, we speak about social commerce. Like many technologies and consumer trends, social live-streaming shopping has its origin in China, where it got democratized. I was inspired to write this article after watching the following video from Alibaba.

5 minutes into watching this, I realized I am watching the future of e-commerce. The missing link between the current primitive search/scroll/click functionality that we sometimes struggle with these days on any e-commerce platform and the VR shopping future promise that copies a live retail experience. Live streaming shopping offers the perfect mix of retail experience from the comfort of your mobile. And it’s available today, no new technology needed.

Here are the 3 elements which inspired me to see the future in this small video:

Deeply understanding your customers – the immense promise of social shopping is the perfect understanding of customers’ preferences and tastes by marrying their historical purchase data and their engagements on the platform. If in China Alibaba is uniquely positioned to challenge and win this game, in the Western world, the future is still unclear. A magic winner would sit somewhere between Facebook/Instagram and Amazon, but the choice between the two behemoths on who will win this game is challenging to decide in 2020. Amazon launched Amazon Live in 2019, with little commercial success. To me, it merely looks like HSN OTT. A year later, Instagram launches its Shop menu directly in the app, after offering post-shopping for some time now. I am not 100% convinced on who to bet.

Creating excitement and brilliantly showcasing the product – unlike retail, e-commerce, and social are great at creating excitement and teasing the right customers. Early hints, reminders to connect, teasing messages – all this is available in-app without too much fuss. When the shopping moment arrives, the value equation turns on its head. Ditching the millions of dollars spent on advertising production or retail furniture, a simple wardrobe or shoe rack can be enough to showcase the product. But a static image is not what we as consumers want; we want someone to try the shoes, hear others talk about them, discuss the size and fit, the materials, and then add in some magic dust of selling talk. Layering in AR technologies can offer a personal fitting experience on top of the showcase.

Scarcity triggers – probably the feature I admire the most in live streaming shopping is the psychological play with scarcity. We know that once something is in high demand, we want it more. The dropping culture, made famous by sneakers companies, can be extended to everything now: from designer chocolate bars to cars.

Micah Mitchell (micahmitchell) on Pinterest

My bet is that social live-streaming will further sink retail faster than e-commerce initially did. What do you think about this bold claim?

Photo by Oleksii S on Unsplash

Why People Don’t Skip Advertising

Ad skipping is a generalized behavior every marketer should be conscious of. The river flows downstream, the hot air rises from the ground, and viewers will be avoiding ads. It’s the new normal in Adlandia. Please don’t ignore the majority. But in some cases, people decide to watch, to engage, to be entertained. Why is it so?

Last week, I wrote a mini-successful piece on why people skip ads, successful relative to my young blog standards. An intriguing comment received on LinkedIn challenged me to write about the opposite and interesting behavior: why people DON’T skip ads.

Here are 3 reasons why:

  • Because you’ve entertained them – advertising always claimed to be a form of entertainment, but this positioning might be more relevant today. We want to run away from the neverending news cycle, the worries and anxiety of the times. We want a quick snack of fun. But we don’t have hours anymore. In the past, we could dedicate a full evening of uninterrupted viewing to a movie. Today we’ve replaced that undivided attention with a split between our streaming and social media platforms. How powerful is the following example of a 6 second ad. There is almost zero need to mention the cause advertising
  • Because you’ve elicited emotions, preferably positive ones – we love a good story, and examples of good stories delivered in 6 seconds or less exist (anyone thinking about Print or Out of Home here?). In Online Video, a fabulous example I have is from our brand Sheba. Does it not leave a smile on your face?
  • Because they are not in front of the screen anymore – I know, it’s an inconvenient truth. People don’t necessarily skip by clicking the skip button; they can move their eyes and attention to a different direction: to another device, to another person, to anywhere else than your wonderful creation. It is not an omnipresent behavior, but still a growing one, fueled by our craving to dedicate our energy to multiple screen devices at a time.

Photo by CardMapr on Unsplash

Why Viewers Skip Video Ads

As a marketer, you put in the extra hours to develop your cinematic ad, with product close-ups and manicured shots of the ideal consumer. You’ve added all the good stuff excessively: suspense at the beginning, emotional cues to trigger happiness, and an excellent product testimonial at the end glorifying the brand. Sadly, they are still skipping your ad. And they do that as soon as they can.

Why is that? Because:

  • They don’t have 30 seconds to learn about your brand story; they don’t spend that much time watching their best friend, Insta Story.
  • For many, advertising is just an annoyance preventing access to the desired cat viral video. Around 80% of viewers skip an ad before it finishes on YouTube.
  • They don’t like to be tricked into watching a video, so don’t be rude – show your brand early, don’t think they won’t notice this is advertising.

Skipping advertising takes many shapes and forms: from clicking the skip button after 5 seconds on YouTube, from scrolling faster in your Newsfeed or right click on the Insta Story, to opening another tab on your browser, to reloading the web page in the hope that the ad will go away or even focus attention on another device entirely.

I don’t have a solution for fighting this behavior; even more, I don’t think you should fight it; you should understand it and make elegant choices on working with it. Last year, Google enabled three agency folks to share advice on making those smart and common-sense choices. You can find the article linked here.

In the end, as the most famous agency person in the world used to say, “The customer is not a moron. She’s your wife” – David Ogilvy. No, it’s not Jon Hamm. Mad Man is not real.

David Ogilvy quote: A consumer is not a moron. She's your wife. Don't...

Photo by Rachit Tank on Unsplash

Dear Marketer, You Should Install an Ad-Blocker.

Marketers often fantasize about the hockey stick performance shape for their brand. We expect a tedious, slow-building phase and then the explosion to unmeasured heights. Sad news, it rarely happens in the world of physical goods, but it often occurs where the marginal manufacturing cost is close to zero after producing the first item. It costs you nothing to sell the 100th Kindle file of your book, the 1.000th download of your Mobile App, or the 10.000th download of your podcast. To me, one of the best examples of exponential growth, with huge implications in our advertising bubble, is the rise of ad-blockers.

According to eMarketer, 1/3 of internet users use ad-blocking software, and worse, more than 50% of the 18-30 years old do so (source). Ad-blocking is common in western markets and results from years of cluttering web pages and deploying annoying pop-up ads. China took a more extreme route, and ad-blockers are banned. The implications for brands are notable; what can we do?

  • First, every marketer should install an ad-blockerHere is how to install one as a plugin on your browser. It might be counterintuitive to do that when you just agreed to use Internet Display banners on https://www.bbc.com/ for your next campaign. But don’t you want to see the emptiness your audience is seeing precisely? You might then reconsider your decisions.
  • Talk to your media agency to understand which media partners restrict ad-blocking (like Forbes or BusinessInsider), how you can protect your media budget from ad-blocking behavior, and learn what is safe. I know our agency, Mediacom, is very open to this. Rethink your media delivery and operate in platforms where consumers accept more willingly advertising content.
  • Rethink your overall communication strategy: bold advertising doesn’t need to be annoying, attention doesn’t need to be grabbed with force. In general, don’t execute something you would yourself be tempted to ad-block. Some say it might be too late to fix online advertising, but at least we can try to stop the decline.

Join the conversation on my LinkedIn page.

Invest in Mass Media, If You Afford It

Invest in Mass Media, it’s the best way to get your brand known. Embracing controversy, I will start by sharing a big idea very much linked to my previous post that focused on building penetration as your number 1 driver of growth. As every category buyer is a potential buyer of your brand, mass reach is your #1 Media target.

Reach, reach, reach … but can I afford it?

During the Mad Men era and shortly after, TV advertising is what built the brands we all know today. These days, startup brands like Blue Buffalo, Kind, or Dollar Shave grow exponentially at first by using direct to consumer channels. Their growth plateaus and are forced to rely on mass advertising channels to scale up. That is why the constant decline in TV audiences should be a worrying trend for any advertiser that wants to build brands to scale, not just make the next sale. What’s available to offset this mass reach decline is a maze of multi-formats and solutions with varying degrees of quality and measurability. You better equip yourself with a lot of patience, media budgets, and detective skills to navigate this complex digital labyrinth. In a digital world built on the promise to understand consumers better, it might seem archaic to praise the role of mass media. Yet here I am doing exactly that, with a twist. I am simply saying that mass reach opportunities are what we all should be hunting for; the only limit is the budget we are playing our game.

But what precisely is Mass Reach? A higher share of voice compared to your market share?

The focus on Share of Voice as a primary metric for the ideal level of your media investment always puzzled me. Let’s face it. It doesn’t really work to manage your media budgets. There are less complex ways to say more investment is better than less, just compare this year’s numbers with the previous year. But why don’t I believe in SOV? As the above image beautifully describes, there is a big difference between correlation and causation. Share of Voice and Share of Market (or growth of the latter one) are at best correlated, but there is no causation between the two. A simple proof: in every category where, Private Labels are growing at the expense of brands that advertise, the relation between SOV and SOM goes opposite ways. “Good old” brands are spending media money to grow their penetration, but sometimes the benefits are also collected by private labels at the point of sale. And that’s because advertising drives category growth on top of brand growth.  

Did you think about how to increase your media reach today?