The retail landscape is more complex – and more online – than ever. Across this increasingly tuned-in space, categories are converging like never before as companies fight for users’ precious free time. Media, gaming, retail, exercise, cooking, education – all now sit side by side, jockeying for a sliver of consumer bandwidth in the attention economy.
When everyone is your competition, it’s hard to know where to focus: in-category, out-of-category? Or which consumer behaviors to rely on: creating the fewest steps, the coolest experience, or the best storytelling? Please don’t say all three.
When it comes to thriving in the digital space and beyond, the streaming giants get a lot right. From my own experience working with such companies at the global technology firm Reaktor, here’s something I now know to be true: There are plenty of things retailers could glean from the likes of HBO and Netflix.
What follows are three key lessons for ecommerce companies from the Streaming Wars.
1. Fight For Attention or Fail.
Streaming giants know that their success relies on how much of their users’ time they can siphon, especially as new, tempting distractions emerge from all sides. In 2013, Netflix was still focused on beating HBO: the company said its goal was “to become HBO faster than HBO can become us.” Yet by 2019, video games had become a much larger threat: 15-29 year olds were averaging 39 minutes a day playing games. “We compete with (and lose to) Fortnite more than HBO,” Netflix said. By 2020, the sign posts had moved yet again: Netflix congratulated TikTok on its astounding growth, “showing the fluidity of internet entertainment.” TikTok has overtaken YouTube in watch time in the US, getting over 45 minutes per day from its audience. The common thread in the changing competitive landscape was attention: Netflix still needed to beat its traditional competitors, but also needed to take on anyone else vying for its audience’s time.
While many retailers have yet to realize it, they too are engaged in this same battle for users’ attention. The success of ecommerce has evolved from the traditional focus of increasing conversion and reducing returns, to also including metrics that represent trust, dialogue, and discovery with the customer. Metrics such as account creation and post-purchase engagement are now critical to sustained success.
As IRL options flood back in, the competition for users’ time intensifies. In May, retail sales dropped 1.3% as consumers diverted money towards long awaited services and experiences. That’s why it’s crucial now to focus on winning – and keeping – consumers’ attention. It’s the surest way to remain relevant.
2. Experience Talks, Transactions Walk.
What streaming giants excel in is great content, or in other words, entertainment. Users are immersed on streaming platforms because they feel thoroughly entertained. Yet streamers have also learned the hard way that it isn’t enough to just have great content – they have to get users to discover it and watch it, too. That is why streaming services make discovery so much fun for users, while also aggressively moving them towards committing to watching a program as quickly as possible. Movies and shows autoplay as soon as the cursor hovers over the preview picture, opening titles have been scrapped in favor of instant beginnings, and ending credits are replaced by autoplaying the next great piece of content.
That same type of immediate, content-rich engagement is now true of great ecommerce sites. But many are still stuck in the one-dimensional mode of closing a quick deal. Not so long ago, shoppers did their research in-stores, surreptitiously whipping out their phone to check prices and reviews online. They slinked out of the store – or more accurately, the showroom – and settled in behind the computer to buy the same item from whoever o1ered the cheapest price. Brands learned to accept and then monetize that practice, and ecommerce took a transactional position in the retail experience. As a result, ecommerce sites were optimized to get out of customers’ way: to remove friction and make it as easy as possible to complete the transaction.
However, with the digitalization that accelerated during the pandemic, as more and more stores shuttered, ecommerce is now no longer the last, thrifty step in an immersive brick and mortar purchase process. Instead, it’s a 360-degree experience: an always-on engagement program that spans the full customer lifecycle, including post-purchase ownership. Today’s ecommerce sites are complete brand experiences, where brand, mission, product, and lifestyle are intertwined into rich storylines that can suck the consumer in like a great show, and leave shoppers wanting more (or wondering where the time went) – just like Netflix and HBO.
3. Go Live or Go Home.
Most streaming giants operate a livestream arm alongside their ready-to-stream content: Amazon Prime Video has an ever-expanding selection of live sports, and Amazon-owned Twitch dominates gaming livestreams. Netflix started testing Direct, a linear TV channel, in France last year. And both Disney and HBO have adopted the hybrid movie release model, where fans see the latest blockbuster in theaters or right away at home. Retailers are now realizing the power of bringing live content to their audiences too.
Livestream shopping isn’t new, but this is the first time that all the pieces have fallen into place to make it hot in the US. Technology, culture, and consumer behavior are all converging in this space to finally make it premium, fun, and intimate. In livestream shopping, hosts (generally influencers) tell their origin stories, demonstrate their products, introduce their friends, interact with the audience, and accept orders. The format generated $60B in sales globally in 2019 – with China far in the lead, and only $1B of those sales taking place in the US. However, the arrival of exceptional new players such as NTWRK is now changing that, and dominant platforms such as Instagram are joining in.
All ecommerce companies are now entertainment companies. The best way for retailers to thrive is to hook customers in and get them to linger with exceptional content. Livestreams are the next natural evolution from that.