The Live Shopping phenomenon essentially gives consumers the opportunity to buy ‘in real time’ while watching products being modelled or advertised by retailers as well as crucially influencers via live stream. As the trend matures, it is fast becoming an increasingly useful tool in helping consumers and merchants to increase penetration levels into the e-Commerce market as customers look for more frictionless and engaging shopping experiences.
Where it all began
Beginning in China, Live Shopping is booming both in Asia and now globally. With an increase in global adoption, the Chinese markets have provided the perfect test beds for further expansion. In China in 2020 Live Shopping gross merchandise value topped $171 billion, up from $22 billion in 2018, as two out of three consumers claimed to have shopped via livestream.
North America swiftly followed China’s lead through brands including, Google, Walmart, Amazon and Bloomingdale’s and now it is taking off on European shores with the likes of Samsung, Gucci and L’Oréal using live streams to promote and distribute their products. Indeed, the latter has seen remarkable rates of success. In one hour of Live Shopping L’Oréal saw three times higher sales than in one full day of e-Commerce activity, with an average engagement rate of 40%.
Underpinning this shift are social media platforms such as TikTok and Instagram, which have helped bring Live Shopping to the forefront of the e-Commerce market. While these platforms in general are typically seen to cater for Gen Z and millennials, who are mainstream users of Live Shopping, in reality, they span many generations.
Recently there has been a big jump in Live Shopping consumers between the ages of 45-55, looking for beauty products. Indeed, in the overall consumer demographic, nearly half of online shoppers said that they would buy products directly from live videos.
One of the great advantages with Live Shopping is driving sales and conversion. Engaging livestream videos and real-time feedback loop can help shorten the consumers’ decisioning process, turning every purchase intent of consumers into real sales. Thus, shoppable links in livestream reduce purchase frictions. Furthermore, combining sales incentives in Live Shopping such as discounts, time-limited offers or gifts means that even more customers will press the checkout button of their shopping baskets.
During the pandemic Live Shopping brought retailing and catwalks (where they have been allowed pending restrictions) into people’s homes and onto people’s smartphones and sofas as livestream events. Although it is a ‘virtual’ show, for retailers it brings a desired physical element to their customers’ shopping experience and driving sales conversion.
Based on our partners’ statistics, customers using a Live Shopping solution have an average sales conversion rate of 17% - this can be as much as 30% during Live Shopping events – in comparison to the average e-commerce transaction conversion rate of between 1-2%. Clearly this is a huge increase in sales conversion and an opportunity for retailers looking to get their products into the consumer limelight.
In this sense, Live Shopping is a highly successful method for capturing sales and measuring, as a retailer, what your most in-demand products are and what your consumers are looking to buy. It will undoubtedly help merchants drive future product roadmaps, new product launches and innovation, an exciting prospect for all involved.
What does the future hold?
This growing trend currently belongs to the apparel, fashion and beauty sectors, but there is increased interest from other sectors including consumer electronics, furnishing and home décor, fresh food. Nonetheless, the very nature of shopping means that many consumers will want to sit on a sofa before buying it and likewise test drive a new vehicle before purchasing it. We may nevertheless see the takeaway/casual dining industry going down this path.
Undoubtedly Live Shopping will become much more ubiquitous and part of retailers’ e-Commerce strategy to the point at which it becomes as influential as online shopping is today. Shops will also differ in terms of how much they adopt the trend and drive consumer behaviours, enabling seamless commerce across all channels.
About the author:
Leila is a passionate payments expert and leader with over ten years of experience in the payments industry having worked across multiple verticals and payments geographies. Working with a customer centric approach, Leila can distil complex payments requirements and drive specific customer led outcomes to simplify the payments journey and enhance the customer experience through a consultative sales approach. By delivering dedicated and structured account and relationship management, Leila is able to build strong client engagement, drive innovative solutions and leverage data-based decision making to deliver clear revenue outcomes both at an individual and team level.