In the wake of the pandemic, “bridging the gap” between online and physical spaces has fast become a priority for the retail universe. This new directive has manifested in many ways - social commerce, omnichannel retail and new technologies, all of which we explored in our recent The new world of windows shopping report – but perhaps the most intriguing trend to watch is livestream shopping.
Livestream shopping is modern day advertising’s answer to infomercials and live shopping TV channels like QVC and the Home Shopping Network. Social media influencers (also called “host sellers” sit behind their camera and try, review and sell products from home or a shop floor. Viewers and potential customers tune in to watch and can actively participate via a live Q&A on the video app. It’s already a thriving industry in China, where TaoBao Live raked in USD $6 billion in a single day in 2020, and it’s starting to catch on in Western markets like Europe and the US.
According to Business Insider, livestream shopping is a $125 billion industry in China and consulting firm Frost & Sullivan predicts that the figure will reach $400 billion by 2022. While the phenomenon is still in its infancy in Western market, the social architecture that’s needed for it to succeed is already in place.
Outside of China, influencers and social media entrepreneurs like Kylie Jenner have paved the way for the kick off of livestream shopping on platforms like Instagram. At the same time, Tik Tok has scaled its reach in Europe and the US, with its user-base soaring through the pandemic to 2 billion users in the first quarter of 2020. The confluence of these cultural touchstones has resulted in a rising interest from European and North American brands in replicating the commercial success of livestreaming shopping in Asia. The widespread adoption of livestream shopping in Western markets, it seems, is only a matter of time.
Adding fuel to the fire, platforms like Amazon and Facebook have recently launched their own livestream shopping channels. Amazon released “Amazon Live” in 2019 and, while no official statistics are available online, a quick look at the comment section of any Amazon livestream will show you that people are more than happy to engage with it. Furthermore, ShopShops – one of China’s dedicated livestream shopping apps – recently received a $15 million investment to build out its platform in the US.
Why is livestream shopping #trending?
The numbers above indicate that livestream shopping is becoming a viable business model. But why? In China, many livestream users live in second- and third-tier cities where it is harder to keep up with the latest metropolitan trends. For these shoppers, this channel offers an education in what to buy.
Beyond that, livestream shopping bridges the gap between online and brick-and-mortar retail by creating a personal connection between brand representatives (hosts) and customers. It’s easier, more interactive and more personal. The liveness of it could also help make the experience more immersive and spontaneous, so consumers feel like they are getting a better impression and understanding of how the product looks and works.
Some have voiced concerns that livestream shopping may be less relevant outside of China, where consumers’ top concerns are less about education than trust and confidence. But either way, the root of its success remains true and crucial: the ability to create a two-way dialogue between a brand and its customers.
How to approach livestream shopping
In its most basic form, a user’s livestream shopping experience entails logging onto a livestreaming platform and watching an influencer (host) talking about different products. The host will usually have the physical product on hand in order to demonstrate its uses and effectiveness.
There are many ways that retail and eCommerce businesses could approach and leverage this channel. Some of these include:
- Q&A: Accompany every livestream shopping experience with a section where viewers can ask questions. Interactivity is key to building a deeper connection with your customers.
- Offer exclusive deals for the broadcast period: This one is particularly reminiscent of TV live shopping channels like QVC. You could follow suit by offering discounts, bundles and deals for limited times to boost engagement within your livestream – this approach has proven fruitful for many livestreaming brands like Adidas and Nike.
- Integrate to your website: JCPenney launched JCP Live towards the end of 2020 and started streaming live videos hosted on its website, YouTube and Facebook pages. On Facebook, its shows have racked up 50,000 views, proving that retailers don’t need external platforms to participate in this rising trend.
- Think beyond beauty and fashion: While some of the biggest players in livestream shopping are in the beauty and fashion industries, the channel has benefits for a host of other industries. Homeware companies could walk customers through their shop floors to show off their product range, food companies could host livestreams in which they have fun cooking with their produce and discussing recipes and technology companies could demonstrate their latest gadgets and respond to questions about their functions and capabilities. If you’re interested, brainstorm ways to get creative with your products on livestreams.
Tailor your payments mix to complete your livestreaming shopping experience
Livestream shopping is an interesting new avenue for retail. We look forward to seeing how the industry adopts it in the coming years and just how successful the channel will be. Will it meet or even surpass China’s levels of livestreaming success? We don’t know yet, but we’ll be there to help businesses if and when the time comes.
emerchantpay works with retail brands to streamline their payments offering across all channels, online and in-store, and to scale their operations domestically and cross-border. Our global payments solution is available through a simple integration, offering a wealth of features, including global acquiring, alternative payment methods, fraud and risk management and performance optimisation.
Looking to optimise your payments mix? Get in touch.