Livestreaming continues to slowly but surely gain steam in the U.S., with Coresight Research estimating the market will reach $25 billion by 2023. But for retailers considering the technology, they must first understand why it is gaining traction. The livestreaming trend appears to be satiating the consumer’s appetite in two different ways: by capitalizing on the popularity of influencers, and by replicating the in-store experience in the digital domain.
“At the end of the day, people really like to see someone who they recognize or respect in their industry talk about the products that are being sold, etc. There’s a component of who is selling,” Fatima Yusuf, director of partnerships of Shopify, said in a recent webinar. But Yusuf also noted that online, there is a growing need to feel “like you’re still engaged and able to have a conversation with a person when you’re looking at that product.”
This effectively means that livestreaming is hitting both the top and the bottom of the sales funnel, given the diverse range in the shopper’s intent when accessing a stream. Regardless, given the social nature of the channel, livestream shopping’s value to brands isn’t transactional, and shouldn’t be treated as such.
“The transaction just happens to come because you have an aspired state that you want to be and you want to be part of a group,” Alan Boehme, chief technology officer, H&M Group, said during the event.
The session, the first in the Retail Innovation Summit series from The Jay H. Baker Retailing Center at the Wharton School of Business and retail and CPG accelerator XRC Labs, touched on the growth of one of today’s emerging livestream shopping players: ShopShops.
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Although ShopShops started in 2016 as an idea to “bring a Yelp version of shopping to Chinese consumers, says founder and CEO Liyia Wu, the business quickly shifted to the livestream model early on, launching operations on the Taobao marketplace soon after. All it took was five minutes into the company’s first event for Wu to say, “This is the future of shopping.”
Two years later, ShopShops made its public launch and is now established in five countries, hosting approximately 800 live events per month.
“Coming in live is where people get to build a new shopping behavior and a community, and that does happen in real time,” Wu said. “However, I would say that this is a portion of real-time video and a portion of replays. We see the video value of live content that could be watched over and over again.”
Wu highlighted that replays of the livestream events can foster new conversations among shoppers and retailers, and help further expand the community being built. She also stressed that livestreaming in general differentiates itself from the traditional “live shopping experiences” provided by HSN and QVC since ShopShops and other platforms offer a less controlled environment than a studio setup.
“It’s curated by different individuals, instead of curated based on one person,” Wu said. “In our opinion, the difference is that it’s not one show you’re looking at, it’s multiple shows coming from multiple individuals to present or share information about their experience of the product…It’s more interactive where you get to respond to your audience, give results and answers in real-time to people who are looking to buy.”
Wu said that in one livestream, a host was showcasing and trying on pairs of shoes in different colors, and after trying on the same shoe model, one in black and one in white, people watching the stream started requesting that the black and white shoes be sold as a pair. Shoppers with different shoe sizes made the request, so the brand immediately moved to sell the mixed pair online.
ShopShops, a graduate of the XRC Labs Cohort program, made its debut in the U.S. via its holiday beta launch with Rebecca Minkoff and other unnamed brands. Wu expects global adoption of the platform, particularly in English-speaking markets, will start to really settle in by 2023.
Livestream starts local
While ShopShops got its head start largely due to being in a market that is so entrenched in livestream technology—Wu noted that 70 percent of Chinese consumers have experienced e-commerce via livestream shopping—the key for major global retailers in entering the space is figuring out: How do you go from small to large?
Boehme posed this question given that his company operates in more than 70 countries and over 5,500 locations, and has conducted various trials across market with technologies like livestreaming and augmented reality.
“We introduce in a local geography. Sometimes that geo may be in a store or sometimes in may be in a country, but we always have an eye for going forward because we don’t want to be in a situation where we have something that works great in one market, but then it takes us six months to figure out how to scale it,” Boehme said. “We always build scale into our consideration from the beginning.”
For live commerce to truly take off in the U.S., Boehme believes 5G wireless technology is going to be a catalyst in getting more shoppers interested as it can enhance the clarity and stability of mobile video.
But even as 5G may lag in the U.S. compared to China, the pandemic’s e-commerce acceleration means the tools are largely already in place for live commerce growth, according to Yusuf.
She highlighted the Canadian e-commerce giant’s partnerships with Facebook and TikTok as the convergence of commerce and social platforms that are required to reduce the friction associated with livestream shopping.
“If brands already have a presence on these platforms and they’re connecting their commerce capabilities into it, there’s nothing stopping them from doing it right now,” Yusuf said.