4 Ways Video Commerce is Rebuilding Retail

video revenue

Although it feels like the COVID-19 pandemic has changed everything, it really hasn’t — OK, it’s changed everything, but many of those changes are really just an acceleration of ongoing trends. One example is the “sudden” emergence of video commerce. Our shopping habits have been increasingly moving online, but the static experience of clicking through… Continue reading 4 Ways Video Commerce is Rebuilding Retail

Although it feels like the COVID-19 pandemic has changed everything, it really hasn’t — OK, it’s changed everything, but many of those changes are really just an acceleration of ongoing trends. One example is the “sudden” emergence of video commerce.

Our shopping habits have been increasingly moving online, but the static experience of clicking through the listings on your favorite online retailer can be tedious and boring. And what if a consumer is shopping for a new product they’re unfamiliar with? Leaving a customer to do their own research can give them a frustrating experience full of confusion and wasted time. This could lead to a missed opportunity for an upsell or the loss of a sale altogether.  Live stream shopping is the best way to address this issue.

Part QVC, Part infomercial, shoppable videos offer a unique experience that can imitate or even improve upon in-store shopping experiences. A typical livestream shopping experience involves product pitches by salespeople, entrepreneurs, and the occasional celebrity sponsor. These interactive broadcasts allow presenters to respond in real time to audience questions and gauge their interest through the use of live polls. In turn, this high degree of personalization drives up conversion rates. The use of an experience delivery network (XDN) makes this interactivity possible with fully scalable, multidirectional live streaming with sub-400-milliseconds latency.

1) Current Acceptance and Growing Demand for Livestream Shopping

Prior to the pandemic, video commerce was a firmly established facet of Chinese retail, generating $65 billion in 2019. The following year — 2020 — saw that amount soar to an estimated $150 billion which, according to another estimate, represented 9% of total ecommerce that year. Outside of China however, the adoption of livestream shopping has historically been much slower, registering sales of just $1 billion in the United States during 2019 and far less in most other countries.

This sluggish growth would soon be jolted awake in response to COVID-19. With the ongoing pandemic continuing to discourage in-person shopping, retail outlets and brand advertisers saw shoppable videos as a solution to their sagging profits. For example, long-established players in the U.S. are mounting cloud-based livestream shopping platforms, including Amazon Live, Facebook Shops, Google Shoploop, and Instagram Shopping Live. Concurrently, innovative startups like Very Very Shopping Network, Popshop Live, Packagd, TalkShopLive, and many more pursue a range of new approaches, often with a fun-loving, youth-oriented slant.

Though sparked by the pandemic, it looks like the drive toward online shopping will not burnout anytime soon. Consumers are showing an increased and growing appetite for shoppable video, and sellers are shifting their strategy accordingly. Online shopping was already well established, so it stands to reason that — as Maira Genovese, founder of the global marketing agency MG Empower, put it in a recent blog — “Livestream shopping is changing the relationship between consumers and brands. . . . The future of eCommerce is live.”

2) Real-Time Interactive Video Experiences Serve as a Big Point of Contrast

When it comes to truly replicating the in-store shopping experience, current methods of video commerce are not cutting it. In order to approximate a visit to a brick and mortar store more accurately shoppers need to see a synchronized real-time viewing experience. A major requirement of such an experience means the live video must support an end-to-end latency in the 200 to 400 millisecond range. This real-time latency solves the issue of synchronization as the video, audio, and data elements are all delivered so quickly that any slight differences in timing will be imperceivable. The conventional HTTP-based delivery methods for one-way streaming with CDNs result in multisecond latencies that will never be fast enough to deliver the high-quality experience offered by a WebRTC-based XDN.

The synchronization unlocked by real-time latency also supports full interactivity with multiway conversations between a group of people. Synchronization means there is minimal delay between when something is said and when the other people hear it. As such, it establishes a natural conversation flow in a series of multidirectional streams between the connection points of all the people involved in a conversation.

There are lots of innovative features created by this combination of multidirectional streaming and synchronization. For example, if a person has a question about a particular item or service, rather than dropping their question into a chat, they could be brought directly into the presenter feed to ask their question right in the video feed. This is similar to how shoppers would call into a QVC presentation, but with a couple of added benefits: being able to see the person asking the question just like an in-store experience and a more convenient option of not having to dial a phone number. Intuitively, removing more obstacles to engagement increases engagement. This is a much more engaging experience that marketers recognize as a more effective method to sell a product.

3) Real-Time Video Interactivity Is a Commercially Proven Opportunity

Such advanced capabilities are not far-off innovations that will only arrive with our long-promised flying cars. Rather, the XDN technology developed in part by Red5 Pro fully supports interactive live streaming. Red5 Pro–based XDNs are currently in operation worldwide supporting a wide variety of applications including esports, sports, social media experiences, multiplayer game playing, enterprise collaboration, surveillance, gambling, auctions, and video commerce.

A good example of one such operation is the live-streamed commerce space Whatnot. While the Whatnot app provides a platform for sellers and buyers through a digital live auction, they support more than just transactions. Describing itself as “community marketplace,” Whatnot enables its community to connect and interact in real time during live streams and auctions. With an aim to bring people together, the startup aims to connect already existing communities with shared interests and hobbies to one another and on an individual basis. This sense of community is facilitated through an easy process of verifying collectibles smoothing out the process of buying, connecting, and selling. Of course, it couldn’t be an interactive community without the real-time streaming capabilities of XDN technology.

“Making these experiences enjoyable is a key element of the value proposition,” says Whatnot cofounder and CTO Logan Head. “Fandom had always had a place online, but truly thrived at in-person events and local retailers that catered to collectors’ and enthusiasts’ interests in one-of-a-kind and holy grail items,” Head says. “We built Whatnot not just to enable transactions but to capture the fun of the in-person experience, so our communities can connect in real time and geek out with their favorite sellers.”

Real-time video connectivity is vital. “Whatnot would not be in the place it is today without Red5.” Head says, adding that his team chose the XDN platform after thorough research of all the available livestreaming tech.

4) Red5 Pro’s XDN Architecture Introduces Unlimited Opportunities for Innovation

As outlined in our white paper, Red5 Pro’s XDN platform consists of a server software stack deployed in a hierarchy and organized in three-tiered clusters across one or more private or public cloud environments (fig. 1). Each cluster consists of one or more origin nodes where encoded content is ingested and streamed to relay nodes, each of which serves an array of edge nodes that deliver live unicast streams to their assigned service areas.

Figure 1. A Red5 Pro cluster can be deployed on a cloud platform to support millions of users while guaranteeing sub-500 milliseconds end-to-end latency.‌‌

These nodes can be configured in virtualized public or private cloud hosting platforms across the globe creating a highly performant infrastructure for transmitting interactive real-time video experiences at a very large scale or very small scale as needed. This flexible XDN configuration enables all nodes in a cluster to provide real-time streaming support for content in all directions with origin nodes for broadcasting and edge nodes for subscribing. No matter how many video streams are displayed during a live event, everyone will simultaneously see the content in real time.

The automated node configuration and routing capabilities of the XDN architecture enable all nodes in a cluster to provide real-time streaming support for content in all directions. In addition, the stream manager also attempts to assign geographically close origin nodes for broadcasting and edge nodes for subscribing.

Such a high level of real-time interactive performance comes from Red5 Pro’s ability to scale live stream distribution over either WebRTC (Real-Time Communications) or RTSP (Real-Time Streaming Protocol), both of which rely on RTP (Real-time Transport Protocol), the transport mechanism supporting Internet-based telecommunications. By establishing this transportation architecture, the XDN platform is optimized for live streaming with either mobile or fixed access scenarios on a session-by-session basis.

WebRTC protocol is the best choice for users facing fixed network connectivity, because it does not require plug-ins — all the major browsers including Chrome, Firefox, and Safari, as well as Edge and Opera, have all added client-side support for WebRTC. This allows you to run WebRTC-based apps directly in the browser.

While WebRTC is used in browsers, mobile devices have the additional option of adding a native app with the Red5 Pro mobile SDK. This mobile SDK uses RTSP to stream content to and from mobile devices. The RTSP transport protocol more efficiently optimizes the client-server architecture used in mobile communications, which eliminates the need for browser support.

Red5 Pro and XDN support the ingest of content delivered via RTSP or WebRTC as well as other leading protocols used with video playout. This extended ingest compatibility includes video formats such as RTMP (Real-Time Messaging Protocol), MPEG-TS (Transport Protocol), SRT (Secure Reliable Transport). These formats are configured for streaming on the RTP foundation while preserving the original encapsulations for egress to clients that can’t be reached via WebRTC or RTSP.

Another advantage of XDN is how it mimics the benefits of adaptive bitrate (ABR) streaming while avoiding the greatly increased latency of HTTP-based CDNs. Once ABR ladder profiles are ingested into the XDN origin nodes the content is streamed in profiles matched by node intelligence to each session as determined by access bandwidth availability and client device characteristics.

Consumers across the globe have embraced the current forms of video commerce and are increasingly growing to expect it from all the virtual places they shop. XDN technology not only meets the demand for real-time interactive shopping but also serves to add custom functionality as well. Early adopters are benefiting from the high degree of differentiation that comes from supporting such interactive experiences. It is increasingly clear that this is an opportunity that retailers cannot miss out on.

Of course, the window for differentiation will close as ever more sellers take advantage of this new infrastructure. To learn more about the livestream shopping possibilities enabled by the XDN platform contact info@red5.net or schedule a call. Also, take a look at our white paper.