The Future of Retail: Livestream Shopping and How Brands Implement it
Most of us are used to shopping online. But livestream shopping, a trend developed during the COVID-19 pandemic, is taking online shopping to a whole new level. It’s creating a unique shopping experience for consumers and also growing quite rapidly. According to Coresight Research, the U.S. livestream market was projected to reach $11bn in 2021. By 2023, the U.S. livestream shopping market is predicted to be worth $25bn. Livestream shopping is seen by many as the next trend that will reshape the retail industry.
What is livestream shopping?
Livestream shopping promotes products through live video content and lets viewers directly engage with the brands that are advertising. By connecting with viewers at their fingertips, livestream shopping offers various forms of content designed to sell products and promote the convenience of instant purchasing. This new way to shop has proven to gain popularity among Gen Z and millennials. YPulse’s shopping and retail report found a significant increase in Gen Z and millennials’ interest in livestream shopping from 2020 to 2021. Livestream shopping app installs jumped 77% during the first five months of 2022.
So, how is livestream shopping different from traditional online shopping? The livestreamed content is unedited, which allows viewers to get real-time, authentic product insights from experts. They can also communicate with them using the chat or “reaction” feature. Viewers can ask a question about the product and get an answer in real-time, which is pretty convenient compared to traditional online shopping. In addition, entertainment is one major element in livestream shopping. By using digital tools and services, promotional content can become more fun to increase engagement.
Is livestream shopping the future of retail?
If we look at China, where livestream shopping originated, it has already reshaped the country’s entire e-commerce industry. In 2016, China's e-commerce giant Alibaba launched Taobao Live, the livestream service integrated into the shopping app Taobao. Since then, it has broken records on almost every year's Singles' Day, the biggest shopping event in China. Watch this video to learn more about how Taobao Live works:
According to iiMedia Research, in 2020, there were more than 28,000 multi-channel network agencies in China, each of which typically managed multiple online influencers trained for hosting live shopping events. Research predicts that the number will exceed 40,000 in 2022. Livestream has become integral to the country’s e-commerce, generating about 11.7% of its total retail e-commerce sales. McKinsey expects the value of China’s live-commerce market to reach $423bn by 2022.
Livestream shopping has been called the "next big thing in retail." In the U.S., major tech companies like Amazon, Facebook, TikTok, and Google were among the first to explore the territory, creating livestream platforms or hosting livestream shopping events. Brands including Sephora, Clinique, Clarins, and Tommy Hilfiger have also dabbled in livestream shopping, hoping to reach consumers through more diversified channels. Watch Tommy Hilfiger’s first livestream event here:
What can livestreaming sell?
Although fashion and beauty brands seem to be leading the trend of livestream shopping, the opportunities are for everyone. For example, coffee- and tea-maker Quivr has experimented with livestream shopping on multiple platforms before eventually settling on Amazon Live. Petco hosted its first-ever livestreamed event last year, featuring a mix of a pet fashion show and dog adoption drive. LG Electronics has also ran livestreamed series featuring its new products, including refrigerators, TVs, and computer monitors.
What platforms do brands livestream on?
- Social media
Livestreaming on social media platforms with retailing capabilities is an effective way to sell products where brands’ target audiences are already live. Instagram’s “Checkout” feature allows brands and influencers to tag products in their live shopping events. Consumers can shop directly in the app through brands’ Instagram Shop. In addition, Facebook, YouTube, and Pinterest are also exploring ways to combine shopping with live events.
- E-commerce and third-party platforms
E-commerce sites are also jumping into the livestream game. For instance, Amazon Live creates a new experience for consumers who are already flocking to the site for their shopping needs. Brands and influencers can grow viewership by building followers, who get notified in the Amazon shopping app whenever they go live. Third-party livestream shopping platforms such as ShopShops, PopShop Live, and NTWRK have also emerged, offering more dedicated services to businesses.
- Owned channels
Many brands are leveraging owned channels to experiment with live shopping. Nordstrom, for example, launched its own livestream shopping channel for consumers interested in the fashion and beauty categories. Monki, an H&M-owned clothing brand, has had a long history of connecting with its consumers by livestreaming on its own site. An owned channel for livestreaming gives brands more control over what features to include and how to present the content.
Tips for implementing livestream shopping
It can be exciting but also challenging to experiment with this relatively new trend. If you're hoping to sell more products by livestreaming successfully, here are a few things you should take into consideration:
- Tell good stories
A good livestream host must be an excellent storyteller who can tie the products with interesting stories. As the competition increases, brands will need to develop more engaging content than simply teasing what’s to come. It’s also important to find the right person to tell that story. The founders of Beekman 1802, a soap and beauty brand, successfully drew viewers’ attention during their livestream event. They told a story about how they found a new lifestyle on a farm after leaving the big-city life.
- Find your audience
Gen Z and millennials don’t always have to be the target audience for livestreaming. One example is Home Depot’s livestream workshops, where older generations can shop while learning about DIY home projects. Companies can conduct research, surveys, and interviews to identify their target audience’s interests, shopping behavior, most-used social media platform, and more. These will help you decide the content and format of your live events and what platform to livestream on. Besides, collaborating with the right influencer will help you target your audience more effectively and add legitimacy to your product.
- Attract viewers with special offers and deals
Give your audience another great reason to stay and shop in your live events. Many brands offer discounts and coupons exclusively in their live events, making it much cheaper to shop directly in the show than anywhere else. This is an effective strategy, especially for companies just starting to implement livestream shopping. It motivates their audience to keep returning and eventually develop a habit of regularly watching and shopping from the livestream.
There’s a lot still to come for livestream shopping. For instance, how will the livestream format and promotional strategy vary based on brands from different industries? Will livestream sales expand into more sectors, such as finance or B2B? Will the U.S. brands develop a livestream ecosystem that differs from what we see in China? While this all remains to be determined, the emergence of livestream shopping will, nonetheless, help brands gain new potential and opportunities.
At Plug and Play’s Brand & Retail vertical, we have some of the first startups making innovations with livestream shopping. Firework offers unique partnership opportunities to help brands connect with video content creators, while The Site is reshaping the future of e-commerce by creating an immersive video shopping experience. This emerging trend should inspire retailers to reconsider how consumers shop and interact with their businesses.