The Future of Livestream Commerce with Lyve Founder Max Drut 

Max Drut is a pioneer in the ecommerce logistics and delivery space. The Tydo team sat down with Max to examine the shifting future of retail, his key learnings from running a logistics and delivery platform, and the vision behind his new company Lvye.

March 9, 2022
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Yellow background with the Tydo and Lyve logos with navy blue text that says "Live Commerce"

The Future of Livestream Commerce with Lyve Founder Max Drut 

Max Drut is a pioneer in the ecommerce logistics and delivery space. As the cofounder of Covet, Max mastered how to power free, same-day delivery for DTC brands. Then, after running supply chain solutions for a DTC jewelry brand, Max uncovered a new opportunity: livestream shopping. 

The Tydo team sat down with Max to examine the shifting future of retail, his key learnings from running a logistics and delivery platform, and the vision behind his new company Lvye

Fragmented Logistics & Experiential Retail

When Max first ventured into the ecommerce logistics ecosystem, it was a nightmare.

And to this day, logistics is still a highly fragmented industry.

There are countless tiny carriers and logistics providers spread across the ecommerce ecosystem without any real tech. Due to the rising demand for warehousing closer to metropolitan customers, Max quickly saw a gap in the market.

At the time he was launching Covet, most DTC brands were using FedEx same-day air delivery, which is an incredibly expensive cost center.

Max asked himself, “How can we get that cost down?”

His answer: Be right next to the customer without the limitation of a huge warehouse space. He found distressed, underutilized properties like basement garages with large, empty spaces.

He reached out to landlords and said, “Let us store inventory for brands, and you’ll get a revenue share on whatever we do on fulfillment.”

Most of them loved the idea and hopped on board. Then, Max and his team quickly sprung up a Shopify integration and started acquiring brands as clients.

The concept resonated heavily with DTC brands, especially since most of them struggled to get on-demand costs down to $10 or less. Now, a few years later, big-box retailers are transitioning to this type of model. Most of them are in the process of converting stores to partial fulfillment centers.

On the note of delivery and logistics, Max believes the solution to logistics fragmentation is showrooms and experiential retail. He predicts that 70 to 80% of stores in metropolitan areas will become some sort of automated warehouse for either curbside pickup or on-demand fulfillment. 

“As a direct result of logistics and delivery fragmentation, we’re going to see significant decreases in your typical brick-and-mortar experience and utilization.”

On-Demand Delivery Improvements

According to Max, the first benefit of on-demand delivery lies in timing and CX.

In big cities, there isn’t any transparency from legacy carriers.

They’re limited on ETA and unlike food delivery, the user experience is 10x worse.

The second benefit is conversion rate at checkout. Whenever a customer sees free, on-demand delivery, they jump on it.

At Covet, Max and his team saw about 25-30% conversion upgrades at checkout after customers noticed the free, on-demand shipping option. 

In tandem, there’s also a notable increase in AOV.

Max’s team ran an experiment: If a customer was within a serviceable area for on-demand delivery, they received a widget pop-up saying, “Hey, on-demand delivery is available.” As a direct result, the Covet team saw a boost in AOV for their partner brands within that geographical area. The team even ran numbers on each on-demand customer and saw an on average AOV increase of 8 to 10%.

Finally, Max points out that there's also an increase in NPS with on-demand delivery. That's because everything is white labeled. It’s as if the brand actually delivers the order, not the carrier.

On-time delivery raised net promoter scores across the board.

“Customers love live support. They can seamlessly message us and ask questions. It drastically upgrades the core brand experience."  

The Opportunity in Livestream Shopping 

Right before Lyve, Max ran supply chain operations at the DTC jewelry brand, Aurate.

Unfortunately, at the beginning of the pandemic, they had to close their stores and lay off half the retail team. 

That’s when Max started helping out his dad, an orthodontist, who was also forced to temporarily shut down his practice. He told his father to switch to virtual consultations. From there, he fell into a rabbit hole researching and understanding livestream shopping.

Although retail stores were closed, people were still craving interpersonal connection and the interaction of going into a store and talking with a sales associate.

To get started, Max first studied what was happening in China.

Typically, they’re four to five years ahead of the US as it relates to ecommerce adoption. China was ahead of the US for on-demand delivery and micro-warehousing, and the same can be said about live shopping. 

From his own research, Max noticed that existing livestream platforms are super limited in terms of customer data. So, he worked with a childhood friend to develop an MVP of a new livestreaming shopping platform. They got a few signups to validate the concept, and then they started building Lyve. 

Max notes that the ecommerce space has gotten relatively stale and bland. Nearly every website experience is the same: video, lifestyle photo, product description, and reviews.

There’s UGC and YouTube content, but purchasing experiences still haven’t changed. With Lvye, Max and his team want to add more life to brands through owned channels, not external touchpoints like Instagram, Facebook, or TikTok.

At the end of the day, with Lyve, it’s all about fostering genuine relationships with customers.

“Around 10% of ecommerce in China is completed through livestreaming. That's projected to account for 25% by 2026. It’s growing like wildfire. And, the US is quickly catching on.”

Purchasing Behavior & Conversion Upgrades

At Lyve, the initial focal point is conversions. Max sees an uptick in conversions for brands leveraging livestreaming.

As it relates to ROI, it’s not a one and done thing. In order to see tangible results, a brand needs to track ROI for at least a month or two. 

Regarding additional performance metrics, the Lyve team is closely tracking on-site attention duration, cohort retention at the 30-day mark, and net engagement via comments and likes. In tandem, they're also looking at the intangible benefits of live shopping—specifically keeping a pulse on NPS and word of mouth.

Finally, Max believes there’s a ton of potential to intentionally build VIP and brand champion referral programs via livestreaming, just like Twitch communities have already done.

His long-term vision at Lyve is to unlock new acquisition opportunities for brands and also radically improve customer experience, drive cult followings, and improve virality metrics.

“When it comes to live shopping, it’s basically the same as watching your favorite creator or streamer on TikTok or YouTube. That’s the magic.”

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