This article is provided by Reshift Media, a Canadian-based digital marketing and development organization specializing in retail businesses.
While flipping through your television channels (cable is still a thing, right?), you come across a shopping channel with a host showing off a product for sale in real-time. If you decide to purchase the product at that exact moment, you would be engaging in a form of live shopping (also known as live commerce).
While this example is live shopping at its most basic form, the concept has transformed and has gained popularity due to changing consumer behaviour, especially over the last several years (the pandemic has played a major role).
This article will walk you through what live shopping is, why it has become the next big trend in e-commerce, and how retailers can implement it within their business strategies to drive optimal success.
What is Live Shopping?
In our previous example, we mentioned that shopping networks on television are a form of live shopping – think The Shopping Channel (in Canada), QVC (in the US), etc. These cable giants have graced our screens for decades and continue to be a viable source for people to buy products for themselves and their homes. However, live shopping has undergone a bit of a makeover in recent years.
Live shopping combines both a livestream and e-commerce, as all of the buying and selling exists through a device and social media platforms. Thanks to the livestream aspect of it, those doing the selling can show off the products in real-time, answer questions directly sent in by prospective buyers, and demonstrate the product in a way that typical online shopping can’t live up to. Best of all, this form of shopping is remote – which is why it took off during the pandemic.
While live shopping has existed for many years, this “new and improved” version, which has become the catalyst for this new (essentially global) retail frenzy, has much to do with the shopping scene in China. Several influencers in the country have used this livestream method to show off products that viewers could then purchase, and with mobile apps designed just for live shows, profits have soared.
Live shopping has evolved so quickly in China that the live-commerce market had a compound annual growth rate between 2017-2020 of more than 280%, and reached approximately $1,237.9 billion yuan (approximately $242 billion CAD) in 2020, with estimates reporting that sales will reach $4.9 trillion yuan (approximately $961 billion CAD) by 2023.
An example that’s been widely used to demonstrate the effectiveness of live shopping is a livestream that kicked off last year’s Singles’ Day Festival in China. A social media giant who goes by “Lipstick King” sold approximately $1.7 billion worth of products in just 12 hours (the duration of the livestream event) and acquired over 250 million views!
Millennials and Gen Z are the primary audiences engaging in this type of shopping, mainly because of the heavy use of social media involved. Research has found that Gen Z is majorly influenced by social media and online content, with Millennials not far behind, which helps illustrate the importance of incorporating some social media strategies (i.e., live shopping) to help entice this audience to make purchases.
The Benefits of Live Shopping for Retailers
All of the influential factors that made television shopping channels so popular over the years (i.e., convenience, entertainment, etc.) remain prevalent. However, this new version of live shopping takes it to the next level, as livestream hosts can guide prospective buyers through the buying process in real-time and with real interaction. Live shopping has become much more of an “event” that consumers can tune in to, to engage, chat, and react to the products being sold. Consumers can hear honest reviews about the products from the livestream hosts, who may be online influencers or celebrities that they have already developed a level of trust with, and this can help increase the likelihood of them making a purchase.
Live shopping also helps bring the in-store experience, online. Throughout the pandemic, there have been major impacts to retail, causing retailers to re-think how they would maintain the shopping experience for customers in new ways. While pandemic restrictions have lessened and more consumers are back to in-store shopping, many have still maintained their interest in e-commerce and it is something that is not going away anytime soon. With live shopping, consumers are able to experience a similar experience as shopping in-store, in that they can ask questions to the livestream host, comment in real-time, and take a closer look at the product, but it can be accomplished in the comfort of their own home – convenience is key.
The first-party data and key pieces of information that can come from a livestream shopping event can also be extremely useful for retailers in the long term. Obtaining info on who joined the livestreams, what they purchased, and their engagement with the livestream can contribute to marketing efforts later on. For instance, if there were common questions that repeatedly appeared during the livestream, it may be an indicator that this detail needs to be expressed more.
Live shopping also helps build brand awareness, as a livestream event can bring in more of your audience (which then allow you to create lookalike audiences for future advertising). Depending on who your host is, their following can also bring in more consumers interested in your industry, and this is why mindfully selecting a host that has a positive influence in your given industry is key. As well, since live shopping is very engagement-based, meaning viewers can leave comments, add reactions, and interact with others on the livestream, it can help build a sense of community and heighten the shopping experience – all positive aspects that consumers are looking for.
Live Shopping Platforms
Since live shopping is a digital activity, several platforms are taking part in the action. The retail giant Amazon launched Amazon Live, which allows shop owners to hold live stream events, while social media platforms like Instagram Live Shopping, TikTok (and their TikTok Shopping platform that is in the works), Facebook Live Shopping, and YouTube Live are among popular platforms.
Once brands choose a platform, ideally one where they already have a large presence, they can then begin planning a livestream with products that can be sold. A real-world example of a brand who has used live shopping with tangible results is the Montreal-based shoe company, Aldo. In 2021, they tested out a livestream event hosted by a celebrity stylist and entertainer. Viewers could shop Aldo’s spring collection while simultaneously watching the livestream, which consisted of various style-related tips using Aldo products. According to the brand, their main website reached approximately 17k page views within five days of the livestream, with an average of just over 12 minutes of viewing time by consumers.
Retailers have also implemented their own livestream platforms, such as what the fashion retailer Nordstrom has done with their livestream events. In their press release announcing this service, they say, “During these informative and entertaining shopping events, customers can seamlessly shop the products they see and ask questions of the experts hosting the events.” Customers can view upcoming events through a specialized link, and they have scheduled events that customers can join.
The Recipe for a Successful Live Shopping Event
If a consumer decides to join a brand’s shopping livestream event, it can indicate that they want to get a closer look at their products and who they are as a company. Consumers are not looking for something overly staged or similar to an advertisement. What initially made live shopping so popular in China was the authenticity of the livestreams; influencers who have built an audience are the ones representing the brands and are able to guide consumers through the buying journey in a very personalized way.
Entertaining, personalized, conversational – these are some of the characteristics that can help make a live shopping event a success. Remember, while the goal is to increase conversions on products, the livestream also has to be enjoyable to watch, otherwise you’ll likely see a drop in viewers as the stream goes on. As we previously mentioned, selecting the ideal host(s) can make a significant difference, but the products being sold also need to be carefully considered. For example, if you are a makeup retailer, you may want to consider a livestream strictly on your new eyeshadow line, and the host can be a makeup influencer giving top tips using the product.
As the pandemic continues, and as consumer buying behaviour has likely permanently changed as a result, retailers may want to consider live shopping as a new way to sell their products and engage with their customers.
About Reshift Media
Reshift Media is a long-time partner of the Retail Council of Canada. The company is a Toronto-based digital marketing and development organization that provides leading-edge social media, search and website/mobile development services to retailers around the world. Please visit www.reshiftmedia.com to learn more.