Livestream shopping is set to grow in the U.S. next year as the next stage of interactivity between consumers and brands. As people spend more time online or limit their shopping trips during the pandemic, many are seeking digital experiences that bridge the gap with the real world.
"A lot of retailers are creating live programming, and publishers are developing content that connects consumers with corporate brands through powerful storytelling," said Bryan Moore, co-founder and CEO of live commerce platform TalkShopLive. "They're not just driving promotion for these brands, but they're also driving a sale."
One of the lingering questions about livestreamed shopping is how quickly U.S. consumers will embrace it when they have many other options for entertainment and e-commerce. Only 25% of shoppers said they had attended a virtual livestream shopping event, according to a survey by fintech company Klarna. However, 60% of those shoppers who had tried livestream shopping said it had improved their shopping experience, and 47% preferred it to visiting a store.
Brand loyalty, sales conversions
Mixing content and commerce isn't a new phenomenon, but livestreaming adds an element of immediacy and excitement to the online shopping experience for consumers. The host of a livestream can demonstrate a product, tell a more complete brand story and instantly respond to viewers who post questions in a chatbox.
"Everybody's goal is to create a dynamic experience, but more importantly, to convert sales," Moore said of his work at TalkShopLive. "In addition to the sales, it's also helping to build brand loyalty and bring back shoppers. That's why we say, 'our goal is to create shopping experiences worth talking about.'"
TalkShopLive gives brands and celebrities the ability to set up their own channels and offer a more seamless shopping experience that doesn't require shoppers to download a separate app. Oprah Winfrey, Paul McCartney, Dolly Parton and Catherine Zeta-Jones are among the famous people who have sold products through TalkShopLive.
The company has created live shopping events with publishers such as Hearst, Meredith and Condé Nast, embedding a video and an e-commerce player in their online magazines. TalkShopLive collects a 10% commission on sales made through its service, providing an incentive to convert viewers.
"Anybody can set up a TalkShopLive channel," Moore said, adding that its application program interface (API) is designed to work with other platforms, including the websites for retailers such as Best Buy and Walmart.
Last week, Walmart announced plans to implement TalkShopLive on its website, giving the retail chain a way to expand upon its livestream shopping initiatives. A year ago, Walmart ran a shoppable livestream on social video app TikTok for the holiday season. It iterated on the concept for Cyber Week this year with a similar event on Twitter, the first livestream event of its kind on the app. The retailer has also added shoppable episodes to its Walmart Cookshop, a video hub that offers cooking tips and a way to order products from its website.
"Everybody's goal is to create a dynamic experience, but more importantly, to convert sales."
Co-founder and CEO, TalkShopLive
TalkShopLive now is moving into a broader variety of products, expanding beyond the books and music that provided a way for celebrities such as country singer Garth Brooks to tout their latest works. Food is one of its fastest-growing categories, while beauty is also becoming more popular, Moore said.
Lessons from China
The growth potential for livestream shopping in the U.S. is considered promising after the surge in activity seen in China, the world's second-biggest economy. China's e-commerce companies have sought to make online shopping more entertaining with live events that draw massive audiences and an astonishing amount of sales in a single day.
A notable example of a livestreamer who drives product orders is Austin Li, who is known as the "Lipstick King" in China for demonstrating hundreds of lipsticks online. This year, he set a record in a livestreaming session on Alibaba's Taobao Live platform that lasted more than 12 hours and resulted in the equivalent of $1.8 billion in lipstick orders. By comparison, retail chain Ulta Beauty generated almost $2 billion in sales in its most recently completed quarter.
Live commerce sales in China will more than double to $423 billion next year from an estimated $171 billion in 2020, consulting firm McKinsey & Co. estimated. The only impediment to that growth may be a crackdown by the Chinese government, which has targeted technology companies, celebrities and livestreamers exacerbating wealth inequality.
"Live commerce has become table stakes for successful consumer companies in China and much of the rest of Asia and is rapidly spreading to Europe and the United States," McKinsey said in a report this year. "Some pioneers have achieved extraordinary reach and impact."