Streaming in style: the live luxe experience

Synonymous with sophistication and glamour, luxury brands thrived on offline experiences in flagship locations. Today, with the luxury customer base and shopping behaviour having transformed — online sales are projected to claim 30% of the luxury goods market by 2025.

The growth potential has pushed luxury brands to, just like mainstream retailers, also embrace an omnichannel approach to engage Gen-Z and millennial consumers. The digitally savvy demographic prioritises self-care and pre-purchase research. In 2022, Gen-Z and millennials fuelled the entirety of luxury market expansion and will make up a third of the market by 2030.

This article discusses how high end brands are leveraging Live Streaming Commerce as a prime avenue where customers can discover and buy their fashion and beauty products. Check this fact out as a point of reference — 66% of Gen-Z and millennials have used an emerging digital touchpoint such as virtual try-on, live streaming commerce or social commerce.

How live streaming commerce elevates luxury retail

Live streaming commerce is an interactive social commerce tool that combines video streaming and TV entertainment formats such as talk shows and chat. It began in China in 2016 and grew at a frenetic pace to become a $490 billion market in 2022. 30% of luxury retailers in China have been using live streaming for more than two years now, achieving an exceptional 70% conversion rate which surpasses standard e-commerce conversion rates by over 20 times.

Improving customer experience (CX)

Luxury brands thrive on exclusivity and often struggle with providing consistent customer experiences. For instance, luxury flagship stores take great effort when catering to celebrities but fail to provide the same experience to aspirational customers. This is where live streaming commerce comes in.

For the aspirational 95% of the luxury customer base, live streaming commerce is an opportunity for the luxury brand to:

● Expand the brand’s image to a younger target (luxury retail) audience

● Elevate purchase intent and brand appeal/image

Here is how live streaming commerce allows aspirational (or otherwise occasional) buyers to enjoy a better experience:

● Utilising customer insights, luxury brands curate personalised product collections during live streaming sessions, tailoring offerings to the preferences. An example is how AI recommendation engines can suggest outfits based on the customer's past purchases and style preferences.

● Through live streaming, luxury retailers directly interact with aspirational buyers allowing instant Q&A sessions, virtual try-ons and expert advice, fostering a dynamic, one-on-one shopping experience. An example is how virtual assistants provide instant, augmented reality-based, try-on experiences in response to customer interactions.

● Live streaming can seamlessly merge with shopping. An example is how one-click purchases within the stream enables impulse buying and provides instant gratification to the customers.

Influencing purchase decisions

Live streaming uses a trusted influencer and KOL (Key Opinion Leader) network to drive commerce through customer engagement and product guidance. Brands select ambassadors, aligned with their own image and audience, who highlight craftsmanship and emotion over product features to foster pride and confidence in product ownership.

Here are a few notable collaborations between luxury brands and influencers:

● Louis Vuitton has partnered with actress Zhong Chuxi and luxury influencer Yvonne Ching in China

● Gucci has partnered with beauty vlogger Jeffree Star, actor-singer Lu Han and live streamer Austin Li to promote products created for the Asian skin tone

● Cartier has partnered with fashion influencer Chiara Ferragni

When discussing influencers, it’s important to discuss the emergence of micro and nano influencers who both achieve 10X higher engagement than mega influencers. Micro influencers have a 10,000-100,000-follower count and are known for their niche expertise and strong connections within their communities. Nano influencers have an under 10,000-follower count and are often everyday consumers who passionately share their experiences and opinions about products and services.

In comparison to mega influencers with large follower counts, micro and nano influencers add a more personal and relatable touch to luxury retail marketing. They provide genuine, targeted and engaging content that resonates deeply with their followers. As luxury consumers seek personalised experiences and value authenticity, these influencers wield a powerful influence over purchasing decisions, outperforming mega influencers who may have a more diluted impact.

Technology elements that help deliver immersive, interactive and personalised experience to customers

Optimal viewing experience using predictive demand tools

Predictive demand tools are advanced technology solutions that empower luxury brands to deliver an unparalleled viewing experience tailored to individual preferences. These tools easily adapt in real-time and ensure the seamless delivery of high-quality content, ultimately leading to increased customer engagement and satisfaction.

Examples of predictive demand tools in action:

● Live auctions take place during a live fashion show and use predictive demand tools to monitor bidding activity and adjust stream quality for a seamless experience regardless of participants’ geographical location

● Limited release drops ensure an exclusive product launch that employs predictive tools to analyse pre-launch interest and adjust streaming parameters to handle the influx of viewers without compromising on quality

● Virtual showcases in a live virtual fashion show use predictive demand tools that identify outfits generating the most engagement and adjust the stream to focus on those looks

● Diverse content formats like fashion shows, exclusive offerings for VIP customers, behind-the-scenes clips and interviews resonate better with the luxury audience. By offering a rich and multifaceted content experience, brands can foster deeper connections and create a lasting impression on the consumer base

Here are a few examples of interesting viewing experiences:

● Gucci and Burberry’s digital fashion shows in 2022: By transitioning their runway events to digital platforms, these brands showcased adaptability and harnessed technology to engage a global audience

● Marc Jacobs and Brandon’s use of casual content: By sharing behindthe-scenes glimpses, candid moments and relatable content, these brands connected with audiences on a personal level, humanising the brand and positioning itself as more approachable to a wider customer base

● Gucci and Swarovski’s one-on-one virtual shopping: Offering private consultations and guided tours through virtual channels reflects these brands’ dedication to creating tailored experiences, even in an online setting

● Lancome’s virtual pop-up stores across five zones in Singapore, including live streaming with beauty experts: By bridging physical and digital realms, the brand set an amazing example of experiential marketing while offering educational, dynamic and interactive sessions

Enhanced tracking and data analytics

85% of luxury brands’ sales stem from registered customers. By 2025, an estimated 180 zettabytes of digital data will be generated annually. It indicates that this era thrives on analysing real-time unstructured data including social media posts, influencer content and omnichannel interactions.

Leveraging online channels for buyer journeys and enhancing clienteling sessions can help luxury brands bridge offline data gaps. Embedding analytics tools across user journeys yields loyalty and conversion insights. Insights also aid in tailoring post-purchase communication and innovative loyalty programs beyond conventional rewards.

AR/VR and interactive experiences

Augmented and virtual reality enhances live streaming by immersing viewers with real-time product info, live chat and reactions, boosting engagement through interactive participation.

Here are a few examples of how luxury brands successfully created interactive experiences for their customers:

● Prada’s collaboration with a fictional influencer, Lil Miquela for its Milan fashion show: Prada utilised AR and VR to bring a digital character into the real world so viewers could engage with the character in real time. This integration created an immersive experience blurring the lines between reality and virtuality

● Cartier and Burberry’s virtual try-ons in personalised live streams: These luxury brands helped customers virtually try on their products in real time, providing an interactive experience that simulated the physical try-on process. The interactive feature enabled viewers to actively engage with products, enhancing their understanding and connection with the brand.

Solutions to create live streaming experiences across digital channels

COTS (Commercial Off-The-Shelf) platforms

These are pre-built, ready-to-use software solutions providing multi-purpose live streaming capabilities. They come with features like video encoding, transcoding, distribution, viewer analytics and interactivity options.

COTS platforms follow subscription or pay-as-you-go pricing models besides charging for professional services such as training live event broadcasters or streamers. Costs vary based on streaming metrics and requirements. COTS products provide brands with the ability to quickly test the market.

Here is a snapshot of popular live streaming platforms:

● Professional platforms like Firework, Bambuser etc., power live stream hosting on brand channels (websites, apps)

● Video streaming services like Amazon IVS, Youtube Live, Vimeo etc., create custom streaming experiences

● International social media channels like Instagram Live and Facebook Live are popular live streaming platforms

● Well known platforms for live streaming in China include Xiaohongshu (Little Red Book), Taobao/Tmall, Douyin (TikTok), Bilibili, Weibo and WeChat

Custom tools

This category of tools offer a tailored advantage over COTS platforms for sustainable success in luxury retail live streaming. Custom solutions allow alignment with precise brand requirements in addition to:

● Scalability: As luxury brands grow and their live streaming needs evolve, custom tools can be easily scaled to accommodate increased demand, ensuring a seamless experience for both the brand and its audience

● Data security: Custom tools can be developed with a strong focus on data security and compliance. This is crucial in the luxury sector, where customer data and brand reputation must be safeguarded at all costs

● Integration: Custom tools can be designed to integrate seamlessly with existing systems and technologies that the luxury brand already uses. This avoids disruptions in workflow and enhances operational efficiency

● Long-term cost efficiency: While the initial development of custom tools might require an investment, they often prove to be more cost-effective in the long run as they cater specifically to the brand's needs, reducing the need for ongoing modifications or additional software purchases

● Competitive edge: Custom tools can provide a competitive advantage by offering features that aren't available in standard COTS solutions. This uniqueness can help luxury brands stand out and offer a differentiated experience to their customers

● Enhanced user experience: Custom tools can be designed with the enduser experience in mind, ensuring a smoother, more intuitive interface that resonates well with the luxury audience's expectations

Here’s a look at how flexible, complex and quick solutions combinations can be:

For sustained success in live streaming commerce, luxury brands must master the art of crafting an authentic and genuine experience for their customers. They must achieve a fine balance between the allure of being exclusive while also successfully catering to existing and new customers, and nurturing the future customer.

In this pursuit, bespoke tools cater to such unique needs, while experimental content formats resonate with diverse tastes. Seamlessly navigating this synergy, luxury brands can curate meaningful connections, where innovation meets authenticity, setting the stage for a new era of retail excellence.

Author: Shantala Raman, Retail Product Owner and Business Analyst at Thoughtworks and Sanjeev Athreya, Head of Retail and Consumer Practice for Thoughtworks in India (views are personal)