Now that the coronavirus pandemic has accelerated the growth in online commerce, the livestream shopping movement popular in China and other parts of Asia might finally catch on fire in the U.S. and elsewhere. Coresight Research projects that livestreaming could become a $25 billion market in the U.S. by 2023.
Livestreaming allows shoppers to buy what’s being pitched live on air, often with special deals promoted during the stream. It’s become big in Asia because shoppers get to interact with their favorite influencer hosts during the livestream, who answer questions about the product they are selling. For fashion merchandise, those questions can run the gamut from sizing and cut to fabrication, texture or whatever else a shopper wants to know, allowing consumers to receive real-time input before deciding whether to buy. Some initially thought that online growth wasn’t as high in places such as the U.S. due to easy access to stores. But that all changed when the coronavirus pandemic curtailed access to physical stores. And younger, more technically savvy millennial and Gen Z consumers, while they like to shop inside a store, are at the point in their lives where they have the money to drive the livestreaming boom.
According to the Influencer Marketing Hub, citing CNN data, livestream shopping in China grew from $66 million in 2019 to a projected $170 million in 2020.
Chinese luxury retailers leaned on livestreaming for their big 11.11 Singles’ Day in November. Social media platforms and online marketplaces such as Instagram, Facebook and Amazon are testing the model. Women’s fashion brand Anne Klein hosted its first livestream event on Facebook in November. Two months earlier, British luxury brand Burberry kicked off London Fashion Week by livestreaming its Spring/Summer 2021 fashion show on the popular gaming platform Twitch.
Even Walmart has gotten into the act. On Dec. 18, the mega retailer piloted a one-hour livestream event on TikTok, introducing consumers to a selection of its fashion options on a branded profile page. Consumers watching the event saw 10 TikTok influencers interacting with the products, which they could add items to their virtual carts in real time, or wait until the broadcast ended to view everything shown during the stream.
“This year, we’ve been driving innovation in several ways to create engaging experiences for our customers. And with millions of our customers on TikTok, we’ve continued to grow our presence, creating big moments with our hashtag challenges. Naturally, when TikTok began exploring a new shoppable product, we jumped in to pilot the solution. I’m thrilled to close out 2020 innovating on behalf of customers in our fastest growing social community,” William White, chief marketing officer for Walmart U.S., wrote in a Dec. 17 blog post.
“We’re excited that we have the opportunity to be at the forefront of this innovation in a shoppable livestream—a first on TikTok in the U.S.,” added White, noting that Champion, Jordache, Kendall + Kylie and Walmart’s own private brands, such as Free Assembly, Scoop and Sofia Jeans were promoted during the livestream. “It gives us a new way to engage with users and reach potential new customers, while bringing our own brand of fun–with the help of fashion-loving TikTok creators—to the platform.”
Daniel Hodges, CEO of Retail Store Tours, believes livestream shopping will not only overtake digital commerce, but also accelerate it beyond anything the industry has seen. “When seeds are planted, they don’t necessarily pop up right away. The shoots will grow at a pace we’ve never seen before,” he said.
In September, as part of the World Retail Forum’s On the Frontline series, Hodges addressed the streaming video share of time spent by age. In the second quarter of 2019, the average weekly streaming minutes in billions totaled 81.7, but for the same period in 2020 had risen to 142.5. The top three tiers for the period in 2019 were represented by 19 percent for those between ages 25 to 34, 30 percent between ages 35 and 54 and 19 percent for those ages 55 and up. In comparison, the same period by 2020 for the same tiers represented 18 percent between ages 25 to 34, 27 percent between ages 35 to 54 and 26 percent for those ages 55 and up.
“The market for streaming everything, including shopping, is here and it has happened in the last 12 months. And that is unprecedented,” Hodges said, noting that the kind of growth seen usually takes about a decade.
Twenty-five percent of all TV viewing right now occurs through streaming, primarily through Disney and Amazon, he said, noting that channels such as iShopShops, Inc. will soon start to take market share. Founded in 2016 by Liyia Wu, ShopShops partners with hosts who take viewers to different stores, sample sales and flea markets around the world.
A survey by Influence Central, which creates social media and digital campaigns, found that once shoppers tune into a livestream shopping broadcast, “more than half of consumers convert to purchase. Of those that have participated in a live-streamed shopping event since the start of the pandemic, 57 percent ended up purchasing a product as a direct result of the event.
“Eighty-two percent of consumers who participate in live-streamed shopping events and made a purchase during the event did so on Facebook.”
According to the data the company collected, Instagram was second at 30 percent, followed by Amazon Live at 22 percent and YouTube at 12 percent. In addition, 70 percent tuned joined a livestream shopping event to see a real-time demo or product walkthrough, while 60 percent acknowledged the special deals only available during the broadcast. Another 47 percent watched to get insider product information, while 28 percent participated to ask questions of the hosting influencer.
“Basically, livestreaming brings to social media some of the immediacies associated with home shopping [channels, such as QVC], using social media platforms in real time…. The trend for 2020 has been a huge move to e-commerce in the U.S., with 2021 going to be the year of livestreaming,” Stacy DeBroff, founder and CEO of Influence Central, said.
“The reason it has taken China by storm it that it has reached in excess of a $135 billion market by the end of this year, with 524 million online livestream users. In China, the retailers built up a content community,” DeBroff said. She believes the shopping service hasn’t taken off in the U.S. yet because retailers don’t really understand it since they the physical store model is a different animal altogether.
With Walmart testing the waters, jointed by online home decor platform Wayfair Inc., the L’Oreal Group for cosmetics and Etsy for small business owners, DeBroff said the shopping medium is on the “precipice for explosion” now that consumers are much more comfortable with shopping online. She also believes that brands will begin to create their own channels, noting that direct-to-consumer bedding brand Casper and Dollar Shave Club are at the forefront of that evolution.
While livestreaming is also trending in other parts of Asia, Europe has been slower to adapt, much like the U.S. “The biggest acceptance across the consumer audience has been in China. The European brands have been experimenting, with everyone trying to figure out the model,” she said.
Not every retailer will need to rely on influencers to make the model work. Some might have employees whose specialized knowledge in certain categories lends itself well to hosting livestream events.
“I predict that by the second quarter of 2021, the number of users will more than double…. This would not have come to the U.S. as quickly but for the surge of comfort level of consumers using e-commerce. The pandemic accelerated the growth of online users. While most people might have been [shopping online], now the vast majority of consumers have all engaged in e-commerce across multiple categories,” DeBroff said.
Most segments run between 10 to 30 minutes, and many influencers are working with brands to create their own product lines. Brands, in turn, get a share of the revenue, she said.
Despite the rise and potential growth of livestreamed events, brick-and-mortar won’t go away anytime soon. “This can be a new way that brick-and-mortar department store retailers can showcase their product,” she said, adding that stores can create showrooms on the sales floor and have hosts walk through the different displays during a livestream event to show what’s new. And while there will be some investment needed in the new medium, it can also help brands develop an expertise where they can work with social media platforms for additional selling.