How Shoppable Livestreaming is changing the future of retail and ecommerce
Livestream shopping (aka shoppable livestreaming, live-video commerce, live commerce, liveshopping and more) is a new way to shop (and sell) by purchasing products, or services inside a real time livestreaming video session where both sides, the seller and shopper, are present at that moment and communicating with each other interactively either via full audio or in-app messaging. Although the concept is referred to in different terms such as live shopping, live video shopping, livestream shopping and more the common differentiating experience is the interactive live stream video merged into a shopping experience including shopping cart, payment, shipping and other e-commerce features.
The key benefit of a fully shoppable livestream is that “your customers never have to leave the app” to make purchases and the personal engagement results in higher AOV (Average Order Value) and Conversion.
LIVESTREAM SHOPPING IS DIFFERENT FROM VIDEO SHOPPING
The concept of shoppable video has been around longer than livestream shopping and there are distinct differences between how they work specially in the method of engagement and the performance metrics associated with the two.
shoppable video is where clickable links are added to products in a pre-recorded video which viewers can click to go to a PDP for that item and purchase it. It is not interactive and there is no real time communication between the buyer and seller. Metrics of shoppable video are very similar to the normal ecommerce model.
LIVE EXPERIENCES ARE BECOMING A PART OF EVERY VERTICAL
Perhaps and likely because of the fact that humans are true social beings and social connection only by SMS and in-app messaging is far from a true human connection, the live experience powered by superior hardware and connectivity are finding their way in many more verticals.
The concept of “Nexgen Live” which goes beyond the transactional commerce side and into gaming, entertainment, travel, music, the metaverse (AR/VR) and more.
HISTORY OF SHOPPABLE LIVESTREAMING
Shoppable livestreams are gaining traction due in large part to the explosive growth of live video. Virtually all the major social apps are offering some form of live video, and as consumers are utilizing this feature more, the app companies are increasing investment and innovation into the space.
There is also the element of the “super app” which is already underway in china with Taobao and is an eventual, possible, outcome in the future as only a handful of very large apps will be where most of the people on the planet will be spending their time on. Shopping and commerce is a massive industry and it’s only natural for both consumers and brands / retailers to want to do business in the same experience.
Although startups were working on the live shopping concept since the 90’s real consumer traction and transaction volume began starting in the mid 2010’s in China by the Daiguo cross-border shopping concept where shopping agents in the US used apps like WeChat to shop for their clients in China.
The practice only gained ground by increased demand from high end fashion forward Chinese consumers and the additional posers of live streaming and morphed into what we today call Shoppable livestreaming. The sheer amount of sales in China has really taken off in China and the growth has only intensified since the Pandemic, practically pulling 2023 projections 3 years forward and projections for 2020 are at $123 Billion in China with compelling reasons why livestream shopping is catching on with consumers.
Livestream shopping in China has been compared to the next evolution of QVC and many US players are following the same experience as we discuss below. ‘Kim Kardashian sold 150,000 bottles of her KKW perfume in just a few minutes when it was featured on top live streamer Viya’s show last year on Tmall, the main rival to Taobao Live. An incredible 13 million viewers watched the event.
In the US there were concepts around live shopping as early as the first dot com boom with startups including LiveShops, but the effort did not take off due to multiple factors including infrastructure, lack of interest from customers and mostly a lack of a genuine “need” from the US consumers since they had ample and easy access to any product they wanted within reach of a few minutes drive to the mall. The US market is turning now and there are multiple companies, including the largest ecommerce and technology players, joining the livestream commerce space and the COVID-19 Pandemic has accelerated the growth and usage of livestream shopping by consumers.
Coresight Research predicts live-stream shopping events in the U.S. will generate $25 billion in sales by 2023. The streamed events are already a big business in China. A Tommy Hilfiger live-stream show in China in August attracted 14 million viewers and sold out of 1,300 hoodies in two minutes.
Brands are also experimenting with livestream commerce including Levis, Hilfiger, Cadillac and Pomelo among many others.
SHOPPABLE LIVESTREAM USER EXPERIENCE MODELS
Overall there seem to be three different experience models used in the shoppable livestream space:
1. The Instagram/Snapchat mobile app model with one-many shopping and on-screen faves, messages and reactions.
2. The QVC style web (mainly) experience with full page with, almost TV like CX one-many sessions and combines messaging and some voice.
3. The private one-one app experience for VIP style livestream shopping experiences.
CURATION
A large differentiator in how the companies present products to shoppers is the differentiation between curated products or open commerce. Starting with QVC and HSN and extending to the majority of other companies doing the same model curation is a common factor where the company selects and produces the sales session based on what they want to sell. In contrast the more open models allow individual sellers such as brands, influencers, retailers and even individual shopping agents select their own products and use a marketplace approach to help consumers discover and shop for what they are looking for (or happen to find).
THE PLAYERS
In this report we’ll look at the current players in the space (alphabetical list) with a heavier focus on the US and the opportunities for investors and brands to get a head start on a coming tsunami of a new way of shopping, a hybrid of catalog based ecommerce, in-store shopping and real time livestream video.
Note: this is not an exhaustive list of all the companies. Members of our Premium research receive the comprehensive report and additional analysis and insights plus other benefits.
Amazon Live
Starting in 2016 with the launch of Style Code Live Amazon has been experimenting with the Live Shopping experience and in 2019 launched Amazon Live which is in full motion for the new Prime Day sales dates 10/13,14.
Amazon Live is similar to the QVC and HSN experiences and seems to be a direct offensive move to take a bite out of the leader in the live shopping sector Quarate Retail Group born from the merger of QVC and HSN.
Amazon Live also has a specific app for creators to produce and stream their shows.
China (overview)
Although livestreaming in general is a fast growing industry, in China live-streaming comes with unique risks, chief among them unprecedented competition: YY and Momo are among the largest of the hundreds of streaming services that at one point sprang up across the country, taking advantage of low barriers to entry.
“There’s a movement in China now called xiaofei shengji, which means consumer upgrade, before, people only cared about price. Now they care about design, uniqueness and authenticity.”
A young designer brand from Connecticut called Welden recently made a striking debut in China via livestream, generating nearly $300,000 of sales in just two days. Zoe Zhang and Mark Yuan, co-founders of And Luxe Inc., a US-based retailer focused on introducing high-end fashion and accessory brands to Chinese consumers, has put together the livestream for Welden. They have partnered with Taobao global since April 2017, and frequently leverage the platform to help over 80 brands like Welden enter the Chinese market.
Brands can monetize in China (and anywhere) without having a physical store.
The most popular category of products for And Luxe livestreams have been beauty and cosmetic items.
Today, there are hundreds of streaming platforms in China, including both pure livestream players like PDD (Pin Duo Duo) which is one of the leader and Yizhibo, Meipai, Huajiao Live, Kuaishou, and Inke, as well as Alibaba’s e-commerce sites Tmall and Taobao.
China-based blogger incubator Ruhan enables live streamers to monetize on their fan base by offering help with the manufacture of goods, social media marketing, and building Taobao stores. Zhang Dayi is the poster child for this business model, with her store reportedly pulling in $46 million in 2016, slightly surpassing Kim Kardashian’s earnings ($45.5 million).
There are also brand consulting companies such as AndLux specializing on helping US brands sell to the Chinese consumers using shoppable livestreaming on Taobao.
Visional
As an example of the 1:1private livestream shopping experience Visional is a spin-out of the Startup Studio InfiniVentures Labs, Visional is a livestream shopping platform and app providing a different experience to shoppers and brands and retailers.
Visional’s shopping experience is different from the QVC-style shopping in that it is focused on private, 1:1, livestream audio and video interactive sales, a fully functional e-commerce (shopping cart, product catalogs, shipping, tax, tipping, transaction processing and more) plus a CRM and analytics.
Brands, retailers and individuals can use Visional to provide the livestream shopping experience to their own audiences, and shoppers can discover live shopping events from the marketplace-like experience in the Visional app
Heres is a more complete list of the players in the Livestream Shopping space.
WHO IS MISSING
The biggest names missing in an active experimentation of shoppable livestreaming in late 2020 are Youtube/Google and Snap, plus pretty much all retailers large such as Walmart and Macys, smaller chains and independents.
Photo-messaging app Snapchat has added shopping features, such as augmented reality (AR) lenses that point to an online checkout page but no evidence of a shoppable livestream option any time soon.
Google is planning to turn YouTube into a major shopping destination For Google the goal is to convert YouTube’s bounty of videos into a vast catalog of items that viewers can peruse, click on and buy directly, according to people familiar with the situation.
The company is also testing a new integration with Shopify Inc. for selling items through YouTube, but no news about a livestream shopping feature yet.
Walmart has been looking into the social commerce and video commerce space for a while specifically looking at how Douyin in China has been performing and most recently in a bid to purchase the US assets of TikTok which has not gone thru so far.
WHAT’S NEXT
The mix of solutions and options for shoppable livestreaming is already becoming overwhelming and difficult to manage for brands and retailers and differentiate for consumers.
Brands and retailers have to make fundamental, often long-term decisions now to start using this new way of selling and will need help on the strategic, technology, implementation and success of livestream shopping. Planning and experimentation must stop now to learn how to navigate the commerce waters in the new decade.
RetailTechPodcast is initiating a research theme on the Livestream Shopping space and we look forward to ongoing coverage of the space. If you are a retailer or brand this is one of the best performing channels you should look into over the next 2–3 years and the time to start to experiment is now.
