The Future of Livestream Commerce With Lyve Founder Max Drut
Max Drut is a pioneer in the eCom logistics and delivery space. As the co-founder 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 eCom logistics ecosystem, it was a nightmare.
Logistics is still a highly fragmented industry. For a large part of the past decade, there were countless tiny carriers and logistics providers spread across regions without any real tech. Due to the rising demand for warehousing closer to the metropolitan customer, Max quickly saw a gap in the market.
At the time, most DTC brands were using FedEx same-day air delivery, which can become an incredibly expensive cost center. Max asked, “How can we get that cost down?” His answer: be right next to the customer without the limitation of a huge warehouse space. So, he found distressed, underutilized properties like basement garages with large, empty spaces.
He reached out to landlords and just asked directly, “Let us store inventory for brands. You’ll get a revenue share on whatever we do on fulfillment.” After most of them hopped on board, Max and his team quickly sprung up a Shopify integration and started acquiring brands as clients.
The concept resonated heavily with DTC brands since they were struggling 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 a final note, Max believes the solution to logistics fragmentation is showrooms and experiential retail. He predicts that 70 to 80% of stores in metro 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 be seeing 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. With on-demand, there’s live support, on-time delivery, and delivery ETAs.
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 got a tiny 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 a significant AOV increase of 8 to 10% on average.
Finally, Max points out the increase in NPS due to on-demand delivery because everything is essentially 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, especially with regards to better reviews.
“Customers love live support. They can seamlessly message us and ask questions. In turn, the core brand experience can be drastically upgraded.”
The Opportunity in Livestream Shopping
Before Lyve, Max was running supply chain operations at a DTC jewelry brand, Aurate. At the beginning of the pandemic, they had to close their stores and unfortunately 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 suggested that his father do consulting virtually, and from there, he fell into a rabbit hole researching livestream shopping. While retail was closed, people still craved interpersonal connection and the interaction of going into a store and asking an associate questions.
To get started, Max first studied what was happening in China, pointing out that they’re four to five years ahead of the US as it relates to eCom adoption. He adds that China was ahead of the US for on-demand delivery and micro-warehousing, and the same is true for live shopping.
Max noticed existing livestream platforms were super limited in terms of customer data, so he worked with a childhood friend to develop an MVP of a livestreaming shopping platform. They got a few signups from ads to validate the concept, and then they started building Lyve.
Max drives home the point that the eCom 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 its core, Lyve isn’t just a selling tool.
At the end of the day, it’s all about fostering genuine relationships with customers, full stop.
“If you look at the stats, around 10% of eCom in China is completed through livestreaming and is 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 around conversions. Max’s team saw an uptick in conversions for brands leveraging livestreaming. As it relates to ROI, it’s not a one and done thing. He adds that 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, the intangible benefits of live shopping around 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 not only unlock new acquisition opportunities for brands, but to 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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