EP060 Live Streaming Unboxed: Navigating Stickiness and Sales in Digital Commerce === [00:00:06] Darin Newbold: Well, good day and welcome to Commerce Today. This is Darin Newbold, and I'm here with Josh as always. And wow, Josh, as we did a little bit of a pregame warmup on this one, this is a Well, let's just say it's an interesting topic. I cannot wait. So, our topic and title today is Live Streaming Unboxed, Navigating Stickiness and Sales Digital Commerce. And there's a whole, we'll have a link to this, uh, the whole article in the, well, it's not really an article, it's more of a scientific journal, uh, posting. But with that, I'm gonna, Josh. Run with this [00:00:40] Joshua Warren: Oh, I'm [00:00:41] Darin Newbold: This is, yeah, [00:00:42] Joshua Warren: one. This is a tongue twister. Well, not to mention for those, those watching at home, um, we discovered in some of this that there's a, you know, I joke about our age gap. There's not that big of an age gap between us, but in some of this, it basically put out an age. That I'm on one side of Darren's on the other side of, and we have realized we are on [00:01:02] Darin Newbold: We are, we are these, yes, [00:01:04] Joshua Warren: but, um, so yeah, in the frontiers and communication journal, there was a, scientific article, published about 2021 pages long, very dense, but very interesting. It's all about e commerce and it's not often that there are scientific publications about e commerce. I mentioned before the show that, um, typically people that are doing a lot of work in e commerce are agency owners, consultants, people that are directly involved in the commercial trade of it, not professors that are teaching it and taking time to write papers. So I was excited when I saw this BS. It's a mouthful. It is the socio technical systems and trust transfer in the live streaming e commerce. Subtitle analyzing stickiness and purchase intentions with SEM FS QC a and if you're not a social scientist, I guess if you are a social scientist, why are you watching this? [00:01:53] Darin Newbold: Exactly. [00:01:54] Joshua Warren: not a social scientist, um, SEM is structural equation modeling. It's basically a scientific way of modeling different variables in research. And then FSQCA is Fuzzy Set Qualitative Comparative Analysis. It's basically a way in the social sciences, to take what is basically qualitative data and try to make it a little bit more quantitative. Um, so these professors did a, uh, deep dive. Um, 700 consumers and basically tracked how did live streaming purchases they were making through e commerce. [00:02:31] Darin Newbold: Well, and, and for those of you that might be at least closer to, uh, my age range, this is basically the scientific way of saying it was a swag and they, uh, they put it together. It's just a little bit more, uh, exacting swag. But with this, in all reality. This is some really, really cool stuff because at the end of the day, it's how can or how are people and brands affected by the live streaming of that brand, product, whatever, and how does that really come together? And so, you know, I know you talk about. Both real time video as well as online shopping and how that all works. I guess, what does that kind of as the broader view as I kind of laid out here? How does that look, Josh? [00:03:19] Joshua Warren: Yeah. So typically, um. We're talking specifically about live streaming e commerce, which is separate from live streaming advertising that impacts e commerce. So this is an actual live stream. Think home shopping network, but on your computer. Think as you complained about earlier. All those things cluttering up Amazon now. Um, this is basically, they, they seamlessly blend. You have someone, usually an influencer, talking to you about a product. On the product page as you can buy it or even as different products come by on the web page This is expected to reach over 500 million by 2030 Um, so this is a big shift, um, I know that for years, um, I've heard people kind of parents complaining on podcasts about, my kids aren't playing games, they're watching live streams of other people play games. Well, those kids are now consumers and they're buying things and live streaming is really affecting that that [00:04:17] Darin Newbold: Well, and, and let me ask you just for, again, kind of the old folks here in the, in the audience and myself, is this only livestream that is really the, the most impactful, or is it just having even influencers that have done a video that it, it's recorded, it may not be live. But I can go to that product and suddenly it pops up and I can see it. [00:04:37] Joshua Warren: So what they found on the research is that live, live streaming has the highest impact. Um, and we'll unpack a little bit as to why. [00:04:45] Darin Newbold: Well, all right. So then, so the next piece that we kind of get into is What's the science behind the stickiness? Why, why is it so effective and why does it really? drive, uh, consumer engagement. [00:04:58] Joshua Warren: So live streaming has become, such a big medium. Um, it started really outside of the U. S. first. It's growing a lot in the U. S. as well. But, um, especially in different countries in Asia, where it's been very Common and popular they've defined a lot of metrics and a lot of research one of the things very early on is kind of defining How sticky either a streamer or the stream is and that means how likely are you to stay there? Because when you think about it like and again our age gap isn't that big even back in my day? You might have 20 30 channels you could flip between any given time so you don't like what's on this channel You'll flip to that channel You're on Twitch watching a live stream. You have, I don't know, thousands, tens of thousands, hundreds of thousands of people that you can flip to at any given second. So you really want to find, um, livestreamers that are very sticky, that basically they know how to get you engaged and keep you on that livestream And a big part of that's the interactivity, and some of the things that we even joke about, I feel like, on the podcast sometimes, as far as, um, you know, actually addressing the audience. and actually saying, Hey, you know, bob123 that just joined. So glad to see you're there. How's your day going? Like actually watching that, interacting with that, um, those livestreamers that know how to do that really well, their streams are stickier and that actually helps with when you're doing. Ecommerce livestreams because the other thing we're going to talk about some of the takeaways here in a second, but the biggest thing from this paper is they discovered that if someone is has kind of that stickiness to a livestream streamer, they're watching a live and that livestream starts talking about a product or maybe it's an ecommerce livestream They're going into these products that Maybe the streamer has no business selling, knows nothing about, but because of that pre-existing relationship, there is a trust transfer that takes place, where all of a sudden, I trust you, Mr. Livestreamer, so when you say that this is the best coaster of all the coasters out there, well, man, I am going and I'm buying it right now. [00:06:54] Darin Newbold: Oh my. Danger Will Robinson. Alright. So, that trust transfer, that is so key. And here we go. Let's, let's, let's roll through. And I know, I know we have like 10 different takeaways. I'm not sure we would get to all of them. And if we do, that's fantastic. But, definitely, let's hit on, hit on some of those big ones. That integration of socio technical systems. So, we'll start there, [00:07:20] Joshua Warren: Yeah, so I didn't want you to have to read all 21 pages of very dense scientific language. So I went through it and basically said, what are the top 10 things e commerce executives need to know? First one is what they call the integration of socio technical systems. All this really means is balance having technical quality. Make sure you have a stable, good platform that you're live streaming on. With social interaction. So some, some of the platforms out there and some of the people I've seen try to do this, they focus so much on the technical quality that they don't do as much around making it very easy for the live streamer and the audience to interact. And that is key. Like, that is a something that drives that stickiness factor. [00:07:57] Darin Newbold: Do they have to interact with the exact live streamer or could it be a, a team where someone's helping? [00:08:04] Joshua Warren: on. I mean, usually it's layers, so most really good live streamers. They are going to have some people in the chat kind of helping, but if they don't see if the audience doesn't see live streamer on camera mentioning interacting with. Someone from the chat every once in a while, that stickiness starts to drop. So, [00:08:26] Darin Newbold: as I can see, as the next one on our list, that live streamer has to build some level of trust. [00:08:32] Joshua Warren: Yeah, and it's interesting because the research, they broke down cognitive trust. So, kind of that trust in your brain from affective trust in your heart. And the cognitive trust is really just about, um, having good information. Knowing that, you know, I joked earlier that the live streamer may not know anything about the product. But If I'm holding up a coaster as a live streamer and I say this amazing red coaster is the only red coaster you should buy and it's blue, well, there goes the trust. Um, so you have to have basic level of product knowledge to get that cognitive trust, but then that, um, effective trust that's really going to drive kind of repeat purchases, things like that. Is more about that personal connection. So again, it doesn't even have to be that the live streamer called you out by name and talk to you, but that they're interacting with the audience. There's basically a transfer that happens [00:09:20] Darin Newbold: there. And isn't it almost a little bit, maybe even storytelling and building in that story to develop that trust and develop that connection of making it relatable in that process? And maybe we get to that in one of these. I don't mean to jump ahead here, Josh, but, uh, So, we talk about that. We've got Obviously stickiness equals, equals sales, more engagement, but then, then we go into some of the different strategies for that engagement. Tell me about that. [00:09:48] Joshua Warren: Yeah. So, oh, and one, one of the 10 we, we jumped past was, um, one last thing about trust is leveraging influencers for trust transfer. And that basically means that the more trust, like if you're out there and you're like, we have this size budget and we want to try this out. The. Influencer that has the most trust with your target audience is the one that you want to engage with because that trust will very quickly pass on to your brand and your product. and related to that, related to kind of finding the right influencer, um, they did find a direct link between stickiness in the live stream and sales. So the more a live streamer is able to keep that audience around. The more they're going to buy, something that helps with that obviously is that community, um, engagement I've been talking about, the, the interactions, so again, some of the paper found was instead of saying, all right, we're going to do 50 live streams this week, say, we're going to have 200 different people that get a chance to interact with this live streamer. So really focusing on the number of quality interactions. and then they found, you know, kind of. Yeah. Um, obviously, like anything else you do in e commerce, get feedback from your customers, use that feedback to customize, iterate, and move forward from [00:11:05] Darin Newbold: And then as you follow up, I mean, from that feedback, customize that approach and make those adjustments always improving. So all right, as we, we've learned all the different pieces. Building trust and being able to have stickiness and that drives engagement. So with that, You know, I think you've made a case for it, but why is it important for the merchants that are listening here to really consider this? And take it to the next step. [00:11:34] Joshua Warren: Well, I can tell you right now, if you get fired up about this and you go talk to your executives about it and you say, Hey, I want to do this, they're going to say, uh, in that hard and doesn't it cost money and what's the ROI going to be on it? Like there's going to be some hesitation there and that's natural. I mean, especially. Outside of some of the biggest brands in the U. S. This isn't common. Like this is still catching on and kind of the mid size, the mid market. but I would say, I mean, the easiest thing to show to an executive is the market reach market penetration. How this really is the streaming market. Livestream market is only increasing, especially And I'll, I'll tell something about our ages here. Um, basically, they found that if your target customers are under 45 years old, then you probably have a solid number of them that are engaging with live streams and live streamers. So that's another good way to build the case. And maybe, maybe you don't, maybe you're targeting an older audience, in which case, yeah, maybe don't run to the executives and say, you want to try this. Um, but also, I mean, in looking at this research and looking at some of the other, um, Papers that have been written and things published about live stream and e commerce, the engagement rates and the conversion rates are so much higher, obviously, than a regular website experience. Um, and just again, thinking at the executive level, um, So many of your competitors, depending on what type of e-commerce company you are, they're making big investments in this and they're continuing to make those big investments. And typically when I'm looking at a company, especially a successful one, and I see they're continuing and increasing an investment in something figure, either they don't know how to measure the ROI or they're getting a really good ROI and you hope, especially with a successful company, it's that they're measuring it and it's a good ROI. [00:13:22] Darin Newbold: Exactly. So a question I have for you as we're, as we're looking at this, you talked about a, it's a growth market, high engagement, conversion rates, all of those things. Is this something that a merchant would do directly on their site or? I guess I'm just trying to think if there's, different tools or different ways that they might actually do this directly to their site, you know, cause you're trying to grab a influencer to do this live. So there's a lot of coordination that needs to go on. It seems like it. be a challenging, challenging thing to put together. [00:13:58] Joshua Warren: It can be, um, and there are different ways of doing this. This can happen. Live on your site. Usually, there's a lot of really good tools out there for kind of, um, cross streaming or re streaming, that's the tool we use, um, that will allow you to actually, the streamer can go live in all their usual places and on your website. So that way they're, they're reaching their usual audience but then pushing them back to your website because typically, however you have this embedded in your site, you want something that can push product information out to the user. And things like Twitch, There's not a really clean way to have a on Twitch experience with a product like there could be on your e commerce platform. [00:14:38] Darin Newbold: Interesting. Interesting. So what are some of the other technological integrations that might help make this come together? [00:14:46] Joshua Warren: Yeah. So, um, just days ago, OpenAI showcased, um, their new tool that's not available to the public yet, that from a text prompt can create a 60 second photorealistic video. I actually heard somebody say the other day that the and he's an expert and he's like the one thing I've learned about is never make it predictions about so I'm hesitant to say this but I will say some point in the future you will be able to have an AI powered host that. Is an AI live streamer and there's already some AI live streamers out there where they're not real people. They are 100 percent a computer program and AI. They're not doing e commerce yet, but it's only a matter of time before there's a service you can buy where your brand has its own unique. AI powered live streamer, live streaming 24 7, interacting with the audience, um, and if it's like the other things we've seen in AI, the price is going to come down on that quicker than you think. So keep an eye out for that. [00:15:48] Darin Newbold: Isn't that kind of like the, an advanced version of even almost like the, support services that pop up that want to help you and walk you through certain things. I mean, that's similar to that in a [00:16:00] Joshua Warren: Yeah. Um, also, I can't let a week go without talking about the Vision Pro. Whether you like the Vision Pro or not, mixed reality is here to stay. And I think we're going to see more and more integrations between livestreams and mixed reality. And that's going to get, I mean, when you start to think out where that can go as far as, you're using a headset, you're watching a livestream you're talking about a product, you can actually pull that product into your space with augmented reality. Like if it's furniture, you can see how it fits in the room and just making all of that seamless. So, I mean, the technology is catching up and kind of surpassing. I think a lot of people early on thought livestreaming ecommerce I even made the example earlier, that's just home shopping network on the computer. The technology is getting way past that to where it's much more interactive, um, it's much more personalized. You can bring it into your space through things like AR, [00:16:52] Darin Newbold: Crazy. And then, uh, Something else is, is varying up the content and, and making it different so that it's not the same thing each and every time. That's got to be really important as [00:17:06] Joshua Warren: Yeah, and you can almost, especially if you're working with multiple different influencers, you can almost look at this like affiliate marketing. The way a lot of brands will intentionally. Not give the exact same promotion to two different affiliate marketers. They won't make one specific to each affiliate marketer. [00:17:22] Darin Newbold: A little A/B testing? yeah, well, and even just that way, [00:17:27] Joshua Warren: um, [00:17:27] Darin Newbold: it allows the marketer to stand up and say, just for my audience, just for you, you get this discount on this product. [00:17:33] Joshua Warren: Um, [00:17:34] Darin Newbold: we have a client that uses that quite a bit with radio hosts of your audience only. And today only, [00:17:40] Joshua Warren: um, [00:17:40] Darin Newbold: you can do that with the live streamers, especially if you're working with multiple. [00:17:44] Joshua Warren: Um, and then just, yeah, giving, again, live streaming, there's so many things that you can watch out there and it's so easy to lose that stickiness. So keep it interesting, give them some interesting products. Maybe, um, there's a brand that I follow that one of the things they've started doing is their newest colors that you can't get anywhere else. They will announce first on their live stream. So different things like that to, to vary the content. [00:18:08] Darin Newbold: Is there any other kind of success stories or, or things that you might want to share that people get examples of? I [00:18:14] Joshua Warren: know if I have enough time, but there are some solid ones in the paper as well. I know that I told you all, you know, you don't have to read the whole paper, but we'll link to the paper in the show notes so that if somebody wants to dive in further, they definitely can. So, well, [00:18:27] Darin Newbold: excellent way as we, uh, as we kind of wrap this up, there is a huge amount of potential in this live streaming and it is, it is only going to get bigger and we can see it. It's happening. Maybe not exactly the way this is describing, but in a lot of ways, and it's growing bigger and bigger. So. You guys, as you're listening to this, as you're taking a look at it, it needs to be, depending on your product and service, they're probably a live streaming option for you. [00:18:57] Joshua Warren: And one thing I would say building on that is just because you're not a big direct to consumer brand, don't think, oh, this isn't something I need, especially the, the distributors out there. You actually have customers that are wanting this type of engagement and they want this type of service. So I think this is going to cut across a lot more types of e commerce than people are probably thinking, right? [00:19:20] Darin Newbold: And is it possible that Someone might have a, maybe this is a different part or a secondary show about how they would define that influencer or who that live streamer is and, and the influence. Because a lot of times I immediately think of a movie star or somebody that is very well known, but it might be someone that's just. very well known in that niche market that really commands the attention of people there. [00:19:46] Joshua Warren: Definitely. And I think especially when you start looking at the B2B side of things, it could even be someone at your company. If you are distributing a product and you're kind of the one source for that product, you have someone with deep product knowledge. They really are an influencer in that industry and they could be a great person to get on a livestream [00:20:01] Darin Newbold: That's exactly what I was thinking of. So perfect. Well, with that, we have, uh, we've kind of hit up against our, uh, end here. We're very happy to have you on board. Please, uh, like, and subscribe to our, to our show, both on LinkedIn, as well as YouTube and all of the other places. So we appreciate you being here. And as always, thanks a bunch for being here at Commerce Today. ​