By Kenneth Tan, Co-Founder and CEO of BeLive Technology

Think of a shopper anxiously waiting for a new dress and, when it finally arrives, it proves to be a disappointment as it does not fit, look, or feel right. 

They might thing: “But that influencer was so convincing – that dress looked spectacular on them!”  

Of course it did — the influencer had a duty to hawk the dress! Their beautifully edited and filtered video was made to make the product and its ambassador look perfect. 

This daily disappointment drives a wave of returns blighting millions of shopping experiences. More than just a hassle for consumers, these returns represent significant and costly logistics challenges for retailers.

Around 30 percent of what is bought online in the US is sent back in the mail, compared to 8.89 percent for in-store purchases. This sky-high return rate bites a massive hole in the retailer’s margins. In 2022 alone, consumers returned $212 billion of goods out of $1.29 trillion in online sales, leading to a 16.4 percent return rate. Each return costs retailers an average of $25, factoring in shipping, restocking, and labor.

The unlikely silver bullet? Live shopping: a contrarian medium that’s changing the online shopping landscape. 

Shoppers look for authenticity in this increasingly filtered and edited short video reels-dominated content world. There is something quite charmingly human about that: unfiltered, sometimes clumsy, often very endearing — just plain folks, like you and me, with a ring light and a phone camera, answering questions directly, giving unbiased or even off-brand answers—to their incredibly loyal fans.

Like Buying from a Friend

When customers purchase through a live stream, they interact with a real person in real time, which makes them feel as if they are buying from a friend. 

This personal connection fosters a sense of responsibility in the live streamer, who appears accountable for the customer’s satisfaction. This direct interaction leads to more informed purchases, as customers feel more confident asking questions and seeking clarification on products before buying, ultimately reducing the likelihood of returns.

Getting Closer to the Products

Shoppers can also view products in real-time and ask questions, all answered immediately. This is much like shopping in stores, as the ability to truly inspect products helps customers and will, likewise, assist them in making an informed decision when it comes time to buy. A survey by Shopify also stated that 41 percent of consumers agree that live shopping decreases doubt about the product, so the number of returns will decrease.

A rather outlandish but surprisingly effective example, Build.com implemented the use of augmented reality within their live shopping feature, which allowed for realistic, 3D viewing of products. The result was a 22 percent decrease in return rates because shoppers could make more informed decisions.

Creating a Secure Shopping Environment

Moderation and filter tools are critical elements to properly personalizing the live shopping environment. The control of live chats, handling of inappropriate comments, and ensuring helpful interaction are crucial elements that a livestream moderator takes up. 

Filters accentuate some of the features of the product, allowing the customer to quickly find what they are looking for.

Community management is also used to create a community where the customers share their experiences to build trust and loyalty toward the service. 

For example, Macy’s used in-store VR to animate products; the result was a return rate of under 2 percent, far below the industry average of 5 to 7 percent.

Exceeding Customer’s Expectations

Today’s shoppers expect fast, seamless experiences. McKinsey reports that 60 percent of online shoppers prefer platforms with live demonstrations as they speed up the decision-making process and cut returns.

Live shopping also allows brands to make their presentations highly individual and personalized so that they can put on the screen exactly what would resonate with this audience. 

This, in turn, results in a better shopping experience and a decrease in returns because customers are more likely to be satisfied with the products that have been able to satisfy their needs.

Winning with Fewer Returns

Many brands have successfully used live shopping to reduce returns and increase customer satisfaction. 

For example, Gunner Kennels saw a 5 percent reduction in returns and a 3 percent increase in add-to-cart with the inclusion of live shopping and AR features.

PowerReviews found through its solutions that high-quality images and user-generated content can lead to decreased return rates. Consumers who viewed realistic photos and videos created by others improved product understanding. The knock-on effect is informed buying with fewer returns.

An internal statistic from video commerce company BeLive Technology states that live shopping can increase conversion rates by up to 30 percent as customers are more confident about what they buy. 

A World with Reduced Returns

By showing a consumer what is actually being sold, and having a real-life human being that appears to be accountable for the purchase that a customer makes, live selling changes the nature of the shopping experience online – massively reducing return rates. 

This is not just a trend, I believe that it changes the way we shop, and approach returns forever. Retailers who embrace this content medium are more likely to be forward-thinking, dynamic industry leaders who are equipped to tackle the ever-changing e-commerce landscape.

About the author

Kenneth Tan is Co-Founder and CEO of BeLive Technology. He grew up in Singapore and studied at Nanyang Polytechnic, earning a diploma in digital media design. Prior to creating BeLive Technology, Kenneth landed the opportunity to work for a startup video game publisher Nubee. Following this experience, he joined Tokyo Listed DeNA Co. Ltd. (TYO: 2432) as Director of Product, and in his two years there released multiple AppStore-featured products. While with DeNA, Kenneth was first exposed to live streaming video as one of the startups DeNA invested in, Showroom, was gaining massive success in Japan. Shortly after, Kenneth decided to return to Singapore permanently to explore the possibility of scaling a live streaming business in Southeast Asia.