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What is livestream shopping, and how does it impact retail?

Anastasiia Bernatska
Anastasiia Bernatska is an innovation analyst at ITRex. She is passionate about emerging tech, innovations, and life-changing technologies.
Originally published at itrexgroup.com ・8 min read

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With the introduction of lockdown measures and brick-and-mortar stores closing their doors, retailers’ reliance on ecommerce solutions has intensified. The push to online and the need to attract and retain customers has made retail brands invest more in digital advertising and bring livestream shopping to their marketing mixes. A hot trend, livestream shopping allows making otherwise feelingless online shopping more engaging and experiential while taking conversions way up. In this article, we’ll examine the phenomenon of livestream shopping, evaluate its impact on the retail sector, and zoom in on out-of-the-box and custom live video shopping tools.

The introduction to livestream shopping

What is livestream shopping?

The concept of live shopping goes back to the 80s and builds on the idea of video shopping. You are likely to remember QVC’s Lisa Robertson casually chatting with the viewers while demonstrating jewelry or HSN's Bobby Ray Carter showcasing fashion pieces with the viewers tuning in, seeing what’s for sale, and calling in to make a purchase. Livestream shopping — using video streaming tools to demonstrate products, communicate with an audience, and sell, all online — is a natural offshoot of this original TV-oriented model.

Combining the best of ecommerce, video streaming, and social media, live commerce lets people shop anytime and from anywhere, encourages real-time communication, and sparks interactivity, appealing to today’s tech-savvy, sit-at-home customers

Livestream shopping can take different forms, from live events and auctions to online marketplaces and influencer streams. Irrespective of the format, viewers can tune into a live shopping session, leave comments, ask questions, and communicate with a host or with one another. And once they are ready to purchase, they can click a link embedded in a shoppable video and proceed to checkout. Live shopping provides for personalization, too. Although one-to-many live streams, when products are marketed to mass online audiences, are more popular, brands can pay special treatment to their repeat buyers through one-to-one livestream sessions. With private dialogues between a host and a customer, brands can produce higher conversion rates and average order values and increase the customers’ chance of returning.

video shopping

How does livestream shopping work?

Suppose you want to tap into livestream shopping. In that case, you have three options:

  • Leverage social media’s streaming functionality conditions and predicting patient outcomes
  • Market your products on an existing video commerce platform or a marketplace with streaming features
  • Opt for a custom livestream shopping solution

1. Social media

The most popular and perhaps most straightforward way to start with livestream shopping is going live on popular social media apps. Luckily, most social media platforms have introduced livestream and ecommerce functionality in response to the video shopping trend. Instagram, for instance, has added built-in checkout capabilities throughout its apps, including Instagram Live, which, by the way, has seen a 70% increase in the number of viewers in 2020. Facebook, too, is developing native livestream shopping tools. In turn, TikTok is partnering with ecommerce giant Walmart for the latter to market their products online. The critical advantage of turning to social media is the possibility to team up with influencers, who play a crucial role in the success of livestream shopping, right where their audiences are. A study from Adweek reports that 49% of respondents actively follow social media influencers and have made a purchase based upon an influencer’s recommendation. So, having influencers as hosts may help in developing trust and loyalty among customers. However, as social media platforms generate income via media buy, they focus on being social. So, ecommerce functionality is still limited to select brands. As a result, shoppers have to be routed to other platforms or websites to finalize purchases, which disrupts the whole retailtainment experience.

2. Out-of-the-box live shopping apps

Another way to start capitalizing on the video shopping trend involves joining an existing livestream shopping platform or an ecommerce marketplace with livestreaming features. And these span from video commerce giants like Amazon Live and Taobao, live shopping startups like Bambuser and Spin, and niche live commerce apps like NTWRK. The essential advantage is that most out-of-the-box video shopping apps feature built-in integrations with popular ecommerce platforms and payment gateways as compared to the previous option. So, users don’t have to be routed to other sites to complete a purchase and can enjoy an uninterrupted video shopping experience. The fundamental limitation is that some livestream shopping platforms, especially larger ones and those with established audiences, expect a brand to meet a range of requirements, like having a steady business history, and charge commissions. Amazon Live, for instance, charges up to 10% on each purchase. Another downside is rising competition — with millions of livestream views, it can be tricky for retailers to stand out.

3. Custom live video shopping applications

Retailers who seek to make video shopping an essential part of their marketing kit may consider developing a custom retail solution with livestream functionality. Going custom is undoubtedly more effort-intensive than the previous two options. But a custom app can let retailers take maximum advantage of the video shopping trend with tailored functionality, high-quality streaming, advanced analytics, and maybe even some extra features, like AI-powered video content personalization. If you do opt for a custom livestream shopping app, we recommend starting with an MVP. However, it is essential to plan for the future and make sure your app will handle the growing number of shoppers. For that, make time to choose a reliable content delivery network (CDN). Looking for the perfect CDN, make sure it has a robust server infrastructure close to your target locations and pay attention to the bandwidth. With the basics in place, you can think about MVP features. The essentials to include in the first app version are:

  • User registration and authorization
  • Online streaming as such
  • Live chatting
  • Checkout and payment
  • Server-side stream processing

With the subsequent iterations, you can add everything from different signup options, personal customer profiles, search options, the possibility to save streams as on-demand videos, advanced analytics, streaming content personalization, and more

live shopping

What’s the livestream shopping market size?

The current livestream shopping trend has its roots in China. China’s ecommerce giants started holding live shopping events hosted by local celebrities back in the 2010s. The US has begun to catch up with the trend, too. The US livestreaming market is expected to reach $11 billion by the end of 2021 and hit $25 billion by 2023, according to Coresight Research. The market value is still incomparable to that in China, where it comprised $150 billion in 2020 and is expected to reach $300 billion in 2021. The companies that look prominent on the US livestream shopping market today include:

  • TalkShopLive. Launched in 2018, the platform has a 2-million follower base, which is constantly growing. According to Bloomberg, since its premiere, TalkShopLive’s sales have increased sevenfold
  • ShopShops. Having started as a directory for American retailers to reach Chinese travelers, the platform has turned into a profitable livestream shopping endeavor that has recently expanded into and is gaining popularity on the American market
  • NTWRK. The mobile app uses live shows to sell limited edition products. The company has seen its sales double in 2020, with some shows reaching $1 million in sales in approximately 10 minutes
  • Amazon. The ecommerce giant has rolled out its video streaming service with lifestyle, fitness, and cooking streams
  • Google. The company has introduced Shoploop — a video shopping platform that features 90-second shoppable stories
  • Instagram. Its Live Shopping feature allows creators and brands to sell products during Instagram Live broadcasts. The functionality is available to business accounts

An explosion of digital media and video content consumption, an increasing impact celebrities and influencers have on shopping decisions, and the push to online boosted by the COVID-19 pandemic allow projecting that more US retail brands will move on the live shopping trend in the near future.

video commerce

Companies profiting from livestream shopping today

Nordstrom

Nordstrom, an American department store chain, launched its own shoppable livestream channel in 2020. Following the launch, the brand hosted over 50 virtual events, translating the store experience into the digital world, and plans on carrying out their livestream shopping endeavors through 2021. During each event, customers can shop the fashion products mentioned in the video and participate in a live chat. The company’s efforts are paying off. In 2020, 54% of the brand’s sales came from digital channels, while virtual styling accounted for 30% of all styling appointments.

CAIA Cosmetics, Lyko

CAIA Cosmetics and Lyko, Swedish cosmetic and hair care brands, have partnered with Bambuser, a video commerce startup, to power their marketing with live shopping. CAIA Cosmetics, for instance, holds make-up tutorials with the brand’s founder Bianca Ingrosso and claims to be very satisfied with the customers’ response. The average stream viewing time comprises 11 minutes, with 17% of the viewers participating in the live chat and 60% — engaging through likes. The first live stream ended up with a 5% conversion rate, which is higher than the brand’s website conversions. Lyko, in turn, chose to kick off their live broadcasts by offering tips and gifts during the holiday season. The brand had an average viewing time of 16.5 minutes, 17% chatting and 29% liking engagement, and a 22% conversion rate.

Quivr

Quivr, a coffee and tea manufacturer, has tried social media to market their products via video streams but eventually landed on Amazon Live as their video commerce platform. Quivr’s co-founder Ash Crawford says that the brand sees a guaranteed increase in sales of about 150% the next 24 hours after a live stream.

custom livestream shopping solution

Livestream shopping trends and predictions

The possibilities for further evolution and expansion of livestream shopping are numerous. Introducing AI, for example, can help retailers create highly personalized channels of live, interactive content created or curated specifically for a given customer. Leveraging AR and VR, in turn, would be of help in creating immersive video shopping experiences for sit-at-home customers, for example, transporting them to the front row of a fashion show with a host ready to answer questions. In the shorter perspective, brands will continue to extend their reach to more customers through live streams, analysts say. Considering the drastic change in shopping habits and the push to online spaces that are expected to last, livestream shopping is likely to extend in the post-pandemic world.

Livestream shopping offers an opportunity to bring the best of physical shopping to online customers. If you’re ready to seize the opportunity, contact our team!

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