If the pandemic sparked a surge in digital commerce, it also presented brands with a fundamental question: how to fill the customer experience void left by the absence of physical retail.
It’s not an easy question to ask. And it’s not an easy question to answer. Approximately 17 percent of consumers shifted their purchasing habits from their primary store as early as May 2020 as a result of both health concerns and the accessibility of online retail, while at least 60 percent of respondents in a 2020 Ipsos poll indicated their willingness to continue using eCommerce even after brick and mortar reopens.
But what gets sacrificed during the transition from physical to online commerce can often be a key driver for retail: real time shopping. If the chief strengths of eCommerce are accessibility and convenience, physical connectivity and discovery still remain constants in the customer experience. Can livestream shopping present a more engaging digital experience for consumers?
What is Livestream Shopping?
The efficacy of video as a marketing tool is hardly a recent phenomenon. With video predicted to account for over 80 percent of all global web traffic by the end of 2021, it’s no longer an amenity but a vital necessity in any company’s brand reach. But if video is a well-represented resource, livestream shopping is an emerging market in the US whose potential has yet to be fully tapped. Livestreaming already represents a significant share of social media traffic, with a recent survey indicating that 82 percent of respondents prefer to view a brand’s live video over social postings. Livestream shopping allows consumers to interact directly with live video, drawing on the strengths of engagement and interactivity to create a much more realistic virtual shopping experience. And while livestreaming has typically been viewed as the province of social media, the accessibility of solutions and third party apps can allow brands to create, curate and engage with any number of digital platforms.
With a market size estimated to reach nearly $224 Billion by 2028, it might only seem natural that shoppable livestreaming would emerge as a leading solution for brands looking to merge the experience of real time shopping with their own content marketing strategies. When Facebook announced the launch of Facebook Shops in 2020, it emphasized the ability for shoppers to direct questions to a brand and access self-checkout options during a livestream; a feature which resulted in an estimated 300 million monthly visitors to the 1.2 million shops currently advertising on the platform. So why have brands in the US been relatively slow in adopting shoppable livestreams?
The Livestreaming Market in China
Of the 4.20 Billion social media users worldwide, China enjoys a lion’s share of almost 931 million individual accounts or roughly 64.6 percent of its population. And its digital-centric focus is reflected in shopping habits. Approximately $3.1 Trillion was spent via online purchases in China in 2020, with over $242 Billion spent through social media alone—$60 Billion of which was reportedly the result of livestreaming. While China may not have Facebook, they do have TikTok; currently estimated at over 689 million users and designated as the third fastest growing global brand in 2020.
Tik Tok isn’t simply growing among users. It’s growing among major retailers as well. In December 2020, Walmart partnered with the four-year old platform in a pilot test including a holiday shopping livestream which resulted in a 25 percent increase in TikTok followers. But Walmart isn’t the only major retailer to capitalize on shoppable livestreams. In 2019, Amazon launched their own livestreaming customer feature Amazon Live, which allows qualified social influencers a shoppable video platform to promote items and interact with followers.
But there’s a fundamental difference between a one hour stream and the shoppable video market in China. Chinese livestream influencers (known as key opinion leaders) aren’t just influencers. They’re fulltime celebrities, using their streams as both self promotional tools as well as sales platforms. The typical stream in China might consist of a four hour self-curated segment featuring over four dozen products—many of which can sell out in a matter of minutes. The phenomenon has become so widespread that a reported 560 million households in China viewed shoppable livestreams on a regular basis. If it sounds similar to the home shopping television craze of the 1980s, you’re not too far off the bat. Except there’s one detail you may have overlooked. The primary viewership of shoppable livestreams is largely among millennial and Gen Z followers, both of whom share a combined spending power estimated at over $3 Trillion globally in 2020.
Connectivity and Content: The Two Pillars of Livestream Shopping
Retail may have evolved into an environment unthinkable just thirty years ago. But at the heart of both brick and mortar and online retail is customer experience. And one of the key drivers behind customer experience is a quality so subtle it’s virtually undetectable: connectivity.
Connectivity is one of the chief advantages of brick and mortar. Customers can relate to a product on a much more intimate level in person than by simply filling (and often abandoning) a cart online. The psychology behind influencer marketing has always been one of authenticity and humanization of the digital landscape; and both social media and eCommerce has welcomed that psychology with open arms. The rise of livestream shopping is merely one step in the maturation of social commerce.
But connectivity needs content to express itself successfully. And livestream shopping depends on both equally. It’s as much a question of information as it is entertainment. Both can help fill the gap of accessibility left behind by the transition from brick and mortar to digital. But both are only as strong as the focus of any digital retail solution.
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