🛍️ The rise of live shopping
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🛍️ The rise of live shopping
Unpacking one of the major ecommerce trends for years to come
Good afternoon everyone 👋
Welcome to the 23rd edition of our weekly insights. Today, we’ll unpack what’s seen as a major trend in e-commerce for years to come — live shopping.
Ready? ⬇️
🛍️ The rise of live shopping
It all started with us (consumers) heading to shopping malls and browsing store after store to find our next purchase. Then, we traded shopping malls with e-commerce websites as we started shopping from the comfort of our homes using our computers. But smartphones changed our lives, and social media emerged as a new e-commerce channel.
Now, we’re seeing old souvenirs coming back at us, as companies in the e-commerce space leverage video to bring the “in-store experience” back to customers as they shop in the digital world. Tomorrow perhaps, we’ll see metaversical experiences taking over. But we’re not quite there yet.
So, what exactly is live shopping and why does it matter?
1. A 40-years-old practice 📺
Live shopping is bascially bringing QVC and the Home Shopping Channel into modern digital times — Deborah Weinswig, CEO at Coresight Research.
In the late ’70s and early to mid-80s, live shopping networks like QVC and the Home Shopping Channel began to appear on TVs, first in the United-States, then worldwide. In France we called it “télé-achat”, and our homemade stars where Pierre Bellemare and Marise (below) or Marie-Ange Nardi.
These channels were basically bringing the shopping experience to your living room through television. They focused on selling home goods, fashion, beauty products and had their own influencial TV figures pitching to customers.
Live shopping is basically the latest iteration of televised home shopping… and it isn’t much different. The key elements of social selling are still the same — live demonstrations from product sellers with a real-time feedback loop for buyers including reviews of products, opportunities to ask questions… Just swap out televisions and hotlines for smartphones and buy now buttons and you get a digital live shopping experience.
2. Why now? 🤔
As mentioned earlier, the rise of e-commerce websites presented customers with the perfect opportunity to buy from anywhere in the world, and have their product delivered to their doorstep. E-commerce platforms proved to be an incredibly efficient alternative to brick and mortar stores for consumers looking for convenience and comfort.
But the downside of e-commerce websites is that they remove the human touch from the in-store shopping experience. They are built around powerful search engines through homogenized product listings, which make sales dependent on SEO rather than products’ story and innovative nature. Not saying this is bad. It goes perfectly well for consumers who shop out of utility and necessity. But it doesn’t get along well with the “discovery” function of shopping, which drives customers joy, self-validation or even stress relief.
Back in 2019 (before the Covid-19 pandemic), a16z was predicting that short video clips would be the future of e-commerce, as it could reconcile the convenience and comfort of e-commerce, with the personalized experience of in-store commerce.
How? Let’s do a bit of history.
There has been three major era in modern video.
The TV era, of course, with standard 30 to 60 min videos, which production was controlled by a handful of very big budget professionals, with meticulously managed broadcasting agendas
The Youtube era, which took away time constraints and allowed anyone to publish anytime with basic equipment (what we call user-generated content)
The TikTok era, where videos have been condensed to one minute or less and all you need to publish is a smartphone.
As a16z outlines, what makes TikTok magical is that “real-time interactivity is baked into the viewing experience, rather than being relegated to the comments”. In other words, the Tiktok-era platforms added the necessary level of interaction that was missing from online videos to create more engaging social experiences between viewers and video-makers.
Applied this to e-commerce and product-sellers can now leverage short-form videos to create interactive in-store like experiences rather than pushing pure video ads. Instagram, Tiktok and others become proper retail platforms as they merge entertainment with the shopping experience.
Some call it “Shopatainment”.
3. China setting path 🇨🇳
Though the Covid-19 pandemic accelerated the adoption of live shopping in North America and Europe, the trend really took off about 6 years ago in China, with the arrival of Alibaba’s Taobao Live. The Chinese retail giant pioneered a powerful new approach to e-commerce by “linking up an online livestream broadcast with an e-commerce store to allow viewers to watch and shop at the same time”, Mckinsey says.
A few years later, the value of the Chinese live-commerce market topped $171B in 2020, and is expected to reach $423B in sales in 2022.
If China’s experience is any guide, live-commerce could account for as much as 10 to 20% of the global commerce market by 2026 (which is expected to total $5.55 trillion this year).
Shopify reports that, between January 1st 2021 and September 30th 2021, the number of Shopify merchants installing apps for live shopping grew by 61% globally compared to 2020. And the rate of adoption is going to increase in 2022: 49% of brands plan to increase their investment in social commerce this year, with 81% planning to either increase or maintain investment in live shopping to drive sales.
Though it is still unclear how this will develop, we’re already talking about a mutli-billion dollar opportunity.
4. How exactly does live commerce create value? 📈
If you followed me correctly, you now understand that live shopping video is not something that we passively watch, it’s something that we do.
Unlike traditional video ads, live shopping creates an environment with consumer choice at its core. Customers make their own decision to join. They are not passively watching video ads forced upon them as they navigate through a website. Live shopping is undoubtedly the closest we’ve get to replicating the in-store shopping experience.
It is a great opportunity for e-commerce sellers to (re)-build a true connection between with the buyer.
On top of that, live shopping has high rates of engagement, especially with younger generations who crave for authenticity and relatability. Some companies report younger audiences grew by 20% after adopting live shopping practices.
Though the verdict is still out as to whether live shopping events truly entice viewers to buy (some say only 1% of viewers would actually buy something), live shopping can only accelerate conversion as it shortens the customer decision journey. Events allow to raise awareness of a product, just as they are selling touchpoints with consumers.
Another well-documented benefit of live shopping is that even if a lower number of customers converts, they are considerably (40%) less likely to return items than other online shoppers.
5. “Shopatainers” and live shopping brands 💫
Behind its alleged benefits, live shopping is a numbers game. It’s about convincing a large number of consumers to buy your product in a limited timeframe, by creating a FOMO sentiment within the audience. The more buyers, the more value perceived from the crowd. It is a completely different playfield, which will undoubtedly empower a new category of sellers (Connie Chan calls them “Shopatainers”) and brands.
Shopatainers are somehow a combination of Tiktok x Instagram influencers, who master the codes of short-form vertical videos, and Youtube x Twitch creators who are “comfortable livestreaming, ad-libbing, and holding the spotlight for a sustained period of time” with more professional setups.
I am particularly excited to see this new category rise, and see how the ecosystem will structure around them. It is likely that there will be armies of supporting businesses fueling the industry, and taking their cut on successful selling sessions (we’re already seeing this in Asia).
It is also likely that live shopping will be more effective for certain brands selling specific categories of products. Live shoppers are not only buying a product. They are buying the story behind it — from supply to confection, up to unpacking.
Brands that will achieve to build unique stories behind their products will most certainly win in the area.
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I haven’t talked at all about the Metaverse and how virtual reality might create new live shopping experiences. As mentioned above, how exactly this new channel will develop remains to be seen… but I don’t think we’re quite there yet.
Hope you enjoyed the read!
If you’re inspired, why not sharing your thoughts on live shopping in the comments sections? 😀
See you next week,
Tim 👋