High-end fashion apparel and beauty marketplace Orchard Mile CEO Jak Benardete says live shopping is not very popular in the U.S. — yet.
“It’s coming here to the U.S. But first, we have to start changing shoppers’ mindsets,” he says.
To differentiate itself from other retailers, Benardete says it made sense for the online marketplace to build its own livestreaming capabilities and host it on its website.
Orchard Mile sells over 55,000 SKUs from more than 250 brands, Benardete says.
“We thought we already had the most difficult part of the equation — the product to sell,” he says. “The next step was to build a livestream player on top of that.”
That involved building a social media influencer community that could pick out products they love that Orchard Mile sells, he says.
“They sell what they love to shoppers while being authentic to themselves,” Benardete says.
Livestreaming catches on in the US
Currently, China leads the way with livestreaming shopping events, according to consultant group McKinsey & Company. 57% of live-commerce users in the country have used the shopping format for more than three years, according McKinsey’s Global Live Commerce Study from August 2022 to September 2022. Only 5%-7% of Europe, Latin America and U.S. consumers have used the shopping format for more than three years.
But popularity is shifting as 78% of live-commerce users surveyed in the U.S. used the shopping format for the first time within the last year, according to the survey.
Orchard Mile’s use of influencers taps into consumer desire for an authentic experience, Benardete says. Livestream viewers want transparency from their hosts, according to a survey by Coresight Research conducted on April 11, 2023, of 500 respondents, December 20, 2022 (954 respondents) and September 20, 2022 (1,187 respondents). Over half (53%) of all livestream viewers surveyed in Q2 2023 expect to see “expert” reviews.
Influencers guide shoppers during livestream shopping events
Orchard Mile built its livestream player with livestreaming product vendor Agora in Spring 2022. Agora charges Orchard Mile per minute, which Benardete says is feasible because the cost per minute decreases the more minutes you buy to stream. Agora gave Orchard Mile 10,000 minutes a month to start, he says.
Prices change depending on the quality of the livestreaming as well. It costs more for high-definition 4K resolution, for example.
Since launching its livestreaming capabilities, Orchard Mile has accumulated over 60 videos.
“Live streaming is a different type of hustle [for influencers],” Benardete says. “It’s not they take pictures, or make a video and get paid a flat fee of $1,000. Instead, it’s launch a [livestream video] and then there can be residual sales [from video replays] for months to come.”
Benardete says some influencers had to “wrap their heads around” the different pay scale, but once they did, “it’s beginning to scale really fast,” he says.
“We’re adding new brands every day, and we ask our influencers which brands they love and we reach out to those brands,” Benardete says. “I’m building partnerships. We want to become a golden place for influencers to find products they love to sell.”
Testing what sells
In general, less expensive items tend to sell during the livestreaming events, with the average order value during a live shopping event at $200, Benardete says. Orchard Mile’s typical AOV is about $350-$400, he says.
Benardete says live shopping event shoppers tend to be younger than the overall customer base. As such, the marketplace gears merchandise to appeal to a younger crowd. Live shopping event shopping carts consist of lower-cost items, like $20 hair ties.
“We knew it would be easier to sell impulse products like this,” he says. “It’s easier to see someone wearing it, it’s not too expensive, and they can check out with their Apple Pay on their phone. It’s very easy.”
And consumers want a good deal, according to Coresight’s survey. 45% of shoppers surveyed in April watched livestreaming shopping events, compared with 38% in Q1 2023 and 48% in Q4 2022.
The conversion rate for livestreaming events is slightly higher than the website, he adds, without revealing more. But conversions range between 1%-3% depending on the type of item. Lower-priced items have a higher conversion rate, he says. Digital Commerce 360 estimates OrchardMile.com’s conversion rate at 1.5%, according to Top500Guide.com.
In addition, longer videos drive more sales, Benardete says. Besides Jacqueline Miranne, Orchard Mile plans to have four other influencers host longer-form videos. Eventually, Benardete says he wants to feature a daily influencer live selling video.
The process is still new, but brands Orchard Mile sells on its marketplace have contacted Benardete to be featured in future live shopping videos, he says.
“Brands say they have new products and ask if we can have one of our influencers consider featuring it,” he says.
Retailers can strategize how to sell during livestreaming events
Livestreams are typically three to five minutes long. During the video, the influencer shows one product they love, he says.
“It’s almost like a product review, but you can buy it right inside the video,” Benardete says. He said sales are starting to come in for those videos but did not specify how many.
The approach to live shopping depends on what’s for sale. Promoting products during a live shopping event is very different if you’re selling a luxury handbag versus cleaning products, says Joe Kwong, head of business development, Agora.
When streaming from their own website, retailers can control the experience by adjusting discounts or cross selling other products during the event, Kwong says. Retailers can see in real time which products are selling and can adjust what is featured during the event to ensure that if a product runs out, they can switch to alternate options.
“In luxury categories, you might not want to publish transactions happening in real time,” Kwong says. “Compare that to a blowout sale of a hair dryers — [retailers] want to show that you have 1,000 left. If the product is [perceived] as acceptable and people are actually buying it, it triggers more buys.”
The type of production is also evolving. User-generated content, versus very polished, highly produced videos, are appealing to consumers that want authenticity, Kwong says.
Orchard Mile is No. 100 in the Digital Commerce 360 ranking of Global Online Marketplaces.
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