By Mallikarjunadas Coimbatore
The invention of the mobile printing press in the 15th century was revolutionary – it lowered the cost of transmitting information, fostered new modes of communication and may have been a driving force behind the rise of medieval capitalism in Europe .
In 2022, we are in the midst of another tectonic shift. Commerce is being reshaped by the democratizing forces of live streaming and short videos. The proliferation of smartphones, the drop in data costs, the impact of Covid-19 on online shopping, the resurrection of QR codes are all contributing factors. Generation Z and Generation Y have embraced this change wholeheartedly. 91% of Gen Z’s day is spent with some kind of device in their hands – and short video is their language. This is how they express themselves and find their sense of community through common interests.
Alongside these technological forces is also the zeitgeist of authenticity. We see consumers demanding this from their heroes, celebrities and sports icons. Most stars today show empathy for social causes and want to be authentic. Short videos and live streaming allow brands to fit their story by incorporating these elements.
However, while short video is consumed on social media, purchases do not occur there. Outside of China, which is a closed super-app ecosystem, only 4% of transactions take place on social media; the majority of transactions take place on proprietary websites/apps. But most websites today aren’t designed for this Gen-Z narrative of short video/live streaming.
They are usually made up of stock footage, one-sided communication, and endless pages of static product grids, devoid of warmth and emotional connection. While social media attracts massive amounts of consumer attention (sometimes via questionable extraction methods), it doesn’t translate into commerce. On websites, consumers willingly pay attention; but the majority of sites are currently not designed to exploit this.
Running live streams and short videos on brand websites requires significant infrastructure, including a content delivery network (CDN), hosting and caching, data layers, and server capabilities. ‘IA – until recently this was inaccessible to mainstream brands. Today, we have B2B companies doing the heavy lifting on all of these dimensions and enabling brands to design their websites and apps for the live streaming revolution in days.
In the past 3 months, Firework has delivered over 84 billion seconds of live streaming and short videos for over 900 brands around the world. And the datasets show an exponential rise for brands incorporating the same:
1. Website engagement increases by 400%
2. There is a 300% increase in Add to Cart ratios
3. Up to 20x increase in ROI
The use of short videos on a brand’s website spans the entire funnel, from deepening consumer connection to realizing it during purchase. Some use cases and trends observed include –
1. On the homepage, brands include video messages from their founders and CEOs. Customers want that. The true story of the company, brand, and founder can help forge a deeper connection.
2. Store associates or the company’s own sellers can host live shopping events. The technology is extremely simple, removing barriers to entry that previously existed. These events, because of their authenticity, can lead to significant conversions.
3. We live in an e-commerce world where customer reviews are an important signal in the purchase decision. However, there is a high level of noise in text reviews. For example, how would a potential customer choose between a brand with a score of 4.4 out of 4,000 reviews and another with 4.6 out of 1,900 reviews? Testimonials on a brand’s website with real consumers using short videos and live streams build trust.
4. Brands can do real product training on their websites and apps. We see this in a range of industries, including financial services and pharmaceuticals. There’s an overabundance of content on a brand’s website in these areas, but it’s all either incredibly boring or complex. Videos can help break down this complexity; transform what is usually a boilerplate into something real and understandable for the customer.
5. Physical + digital integration is gaining momentum. What powers this is a technology that is actually quite old – QR codes. Its time has come and consumers are more and more comfortable with their use. This opens up opportunities for brands to use live commerce to integrate their physical stores and online presence. Customers can scan a QR code they see on a livestream, reserve a product and pick it up later at a retailer’s point of sale.
6. Video ads have traditionally been considered relevant to upper funnel activity. They attract consumers by generating awareness – but due to a combination of poor metrics, technology, and fallacious correlations, video ads haven’t been able to get their fair share of sales credit. . Now is the time to reverse this bias. Consumer readiness and the evolution of technology that enables purchase in video advertising can help video advertising compete for performance advertising dollars. This is an opportunity for ad-supported television and video networks, as building a sales conversion story for video ads can stop their revenue leaking to social media platforms.
The author is the head of the companies of Firework, a SaaS company based in Silicon Valley. The opinions expressed are personal.