When I was younger and couldn’t sleep at night I’d stay up and flick through the TV channels to find something to watch. I’d always come across these shows whose hyperactive presenters would try to sell random goods by demonstrating their usage and describe them in glistening detail.
Yesterday’s shopping channel has a younger incarnation that has exploded in China and has been making waves in the US lately, too.
Livestream ecommerce is coming into the mainstream as it filters its way through social media from Instagram to TikTok. And retailers are increasingly turning to livestream to tap into new sales pathways.
It broke into the mainstream here back in December when Walmart hosted its first livestream shopping event on TikTok, which was available to its 3.2 million followers. The event was better than expected as Walmart received 7x the views it had expected, with its TikTok following rising by 25%.
Walmart knew that it was onto something. So they decided to host a second livestream shopping event in March, but that time with a particular focus on beauty products.
Meanwhile, over in China, they’re demonstrating what is possible with livestream ecommerce and how far it can go, where it’s a multibillion-dollar industry already. Last year livestream ecommerce was expected to hit $129 billion globally, while the US market is expected to grow to $25 billion by 2023.
The pandemic push?
Livestream really started to kick off in North America as the pandemic was raging across the continent. At a time when consumers were very wary of touching the door to get into the store, shoppable digital content entered the mindset of the consumer.
Now that it’s broken into the mainstream retailer’s mindset, too, it’s not only expected to stick around but grow and take its place among the common options of purchase.
Elsewhere, Nordstrom recently said that they’re going to have 50 livestream ecommerce events; Petco hosted a live pet fashion show through Facebook.
“From the consumer side of things,” said Matt Moorut, an analyst at Gartner, “the appetite for that live content increased right at the same time… It sort of makes a perfect storm where, from both sides of the equation, there’s more of a reason to get involved in livestream commerce.”
Maat added that “The way that it sort of changed more recently is that the functionality now exists in a much more robust sense on social platforms, bringing close together influencers, brands, retailers to the consumers themselves in a whole number of different platforms and channels and avenues.
“That just means that the pathway from discovery to actual purchase is much closer than it used to be.”
The foundations of livestreaming
Because livestream ecommerce is intimately linked to social media, it clearly caters more towards a younger audience. And the platforms that are most video-friendly like TikTok and Instagram, which are better suited to livestreaming, are also most popular with younger audiences and users.
This implies a closer relationship between brands and social media influencers.
Younger generations (the Gen Zers and millennials) have the highest livestreaming usage rate across the world – although their share differs from country to country. For example, in the US 21.5% of Gen Zers use livestreaming while in China that rises to 41.9%.
“Influencers, they understand their community,” said Alessandro Bogliari, CEO of The Influencer Marketing Factory, who are “more relatable and appear less commercial.” And the effects are quantifiable: half of Gen Zers have purchased a product based on the recommendation of an influencer.
The bar for influencer marketing was set by the lipstick king Austin Li, who sold 15,000 sticks in 5 minutes in China back in 2018.
“There is a big interest mostly because of the creator economy,” said Alessandro. “I’d say, more creators and influencers are finding that they can start using livestreaming, not only to entertain others but actually driving as an additional revenue stream.”
Even in recent months, social media platforms have opened up and expanded their livestream capabilities as well as ecommerce platforms like Salesforce B2C Commerce Cloud which are building integrated livestream ecommerce capabilities.
The tricky part for brands here is that influencers are geared more towards promoting a particular lifestyle rather than a particular product.
“There are also some technical integration difficulties,” said Alessandro. “I’m saying that these sort of [livestreaming] platforms are becoming more mature, but this sort of technical ecosystem isn’t to the same level as it is in China at the moment.”
So what about when the commerce landscape returns to a sense of normalcy, when all shops are open and there is little anxiety about big crowds in stores and malls?
“I think that’s going to be kind of an acid test for livestream commerce in terms of the rate of growth,” said Alessandro. “So when those [stores] reopen, do those sorts of people still stick with livestream commerce or do they move back to what they’ve always preferred?”