This article aims to show you that you don’t have to make one drastic change in order to improve your sales. Instead, you can make a series of small improvements that, in the long term, will have a great impact. One of these small improvements can be adding live video commerce to your sales (and marketing efforts). Although you may be inclined to think that this strategy is hard to implement, you can, in fact, start in a few minutes. You don’t need to start big, you just need to start. Because a series of small improvements will generate incredible growth. Your efforts will compound.
Let’s use the following story as our starting point!
Source: JamesClear.com
Do you know the story of Dave Brailsford and how we changed the history of Great Britain’s Cycling teams? It may seem that it has nothing to do with an eCommerce business, not to mention adopting a live commerce strategy. After almost 100 years of poor results, Dave Brailsford was appointed as the performance director for the GB’s cycling team. It was 2003. And the goal was, of course, to change the performances of the British riders.
What happened next is (almost) unbelievable.
Unlike his predecessors, Brailsford understood that dramatic changes may come for small improvements. So he didn’t focus on big changes. Instead, his focus was to gain small improvements in all areas (as small as 1%). And to keep improving day after day. Because, as sir Brainsford himself states: “when we first started, the top of the Olympic podium seemed like a very long way away. Aiming for gold was too daunting.”
The initial changes involved small things like how cyclists wash their hands. Small improvements to aerodynamics. Checking for the dust that could undermine bike maintenance. Better mattresses and pillows for athletes and carrying them wherever the team traveled. These small improvements gave the team the needed momentum. Small improvements started to be visible. The little daily improvements created opportunities for bigger ones. The momentum was created.
The result?
By 2017, British cyclists won 66 Olimpic and Paralympic gold medals. Before Brailford’s hire, they had won one.
By 2017, Le Grande Bouch (Tour de France, the world’s most important cycling race) had 5 British winners. None before his appointment.
The strategy worked. Here is how it applies to your eCommerce business
“But what has this story to do with an eCommerce business?” you may ask.
Everything, as the same principles, apply to your business. Let’s take the example of an average eCommerce fashion platform and see how this would work.
According to the data gathered by National Retail Federation, the metrics for online fashion stores are:
Average conversion rate: 1.5%
Average basket value: $98
Average return rates 15% – from total returns, let’s calculate a 20% average refund rate and assume that in 80% of the cases the products can be replaced. This leaves us with a 3% refund rate.
Average profit margin: 9%
Now, let’s do some math.
If 1000 users visit the website daily, you end up with 450 monthly customers (1000x30x1.5%).
At an average order value of $98, total sales would hit $44100 a month, and deducting the refunds leaves us with $42777.
Considering a 9% average profit margin, that’s $3849 per month.
We would like to improve our profit, of course. There are two ways we could. We could either put all our efforts into dramatically improving one of the metrics, or we could work smarter and make some rather small changes. And although small changes will bring marginal gains, let’s not forget the compound effect.
Adding live video commerce to your sales strategy
For the following months, we will integrate Live Commerce into our sales and marketing campaigns (we wrote an article on this here). We will invite people to watch our live shows, where they can watch us showcase our products live, interact and ask questions, and buy products straight from the live video experience.
We have the same reach, as we don’t want to invest money in something that we are just testing out. But people are interested to see us perform live. It’s something new and engaging, and we see a slight increase in site visits. It’s a rather small gain, of 6%, and the total number of visits is 31800 in 30 days.
We know that best-performing live commerce sessions have conversion rates up to 5 times bigger than average. Calculated at the end of the month, we see that our average conversion rate is 2% (live commerce and eCommerce). Not 5 times bigger, yet an important improvement!
By showcasing many products and answering questions about how to combine them, we managed to increase our average cart value by 5%. Not necessarily astonishing, yet an improvement.
We know that live commerce reduces the return rates as customers have a better understanding of the products. Our total returns saw a 2.5% improvement, meaning refunds decrease from 3% to 2.9%. Any improvement is a win!
The profit margin remained the same.
Now, let’s look at the actual numbers:
We had 31.800 visits and a 2% conversion rate. This means 636 new customers, that’s quite a difference!
The average cart value was $103, so total sales reached $65508. After refunds are calculated, we see 63608 in our account.
With a profit margin of 9%, monthly profit reaches $5724.
Although the improvements for each metric were rather small, the total represents a 48% increase in profit! By showcasing live the products we are passionate about.
Small improvements have the power to bring great results. And when it comes to eCommerce, Streams.live can help you create better shopping experiences that improve your business.
Final thoughts
Any small improvement is, in fact, a big step forward. Adding live video commerce as a sales channel for your eCommerce business will help you create better experiences. And gain better results. Even if you decide to start small.
