Something incredible happened in 2020 when the retail stores shut their doors amidst growing pandemic anxiety. As shopping permanently shifted online, Austin Li in China sold 15000 lipsticks in under 5 minutes. When this news spread, the world was left wondering about the secret behind his outstanding sales. Well, it was simply live shopping!
So, what is live shopping? It's exactly as the name suggests. It's a system that promotes buying and selling products over a ‘live’ aka real-time video broadcasting channel or app. This article reveals the mystery behind live shopping to curious eCommerce brand owners or solopreneurs wanting to set up their own live shopping stream!
The Gracious Origin of Live Shopping: From QVC to TikTok
The success behind live shopping is a time-tested method that TV channels like QVC and Home Shopping Channel implemented. Recall that 1970s or 80’s period?
These channels prolifically displayed all sorts of products, from home furnishings to kitchen appliances and fashion to beauty items. Backed by celebrity figures promoting them and viewers placing orders on a telephone number, QVC was an ancestor to live shopping.
While the advent of mobile phones, eCommerce stores, and social commerce declared these TV programs closed, the formula remained pristine. This is where you see the origin of live shopping. Beginning in China in 2016, the live shopping stream has gripped the retail world with its enticing live broadcasting method.
Predicted to reach $68 billion in the U.S. by 2026, the profits of live shopping have edged their way into the Western market with Amazon, Facebook, TikTok, and Instagram. Here brands start a stream with a host showcasing various products, and the viewers get the chance to buy them when the link appears on the screen. They can directly purchase the product during the stream without visiting the store page.
The Logistics Behind Live Shopping: Where and How to Start
The efficacy of live shopping depends on several factors. Brands can choose to showcase their products from affiliated marketplaces and platforms like Amazon and Shopify Plus. Alternatively, they can locate the stream on social commerce sites brimming with targeted audience categories like TikTok and Instagram Live Shopping.
The logistics playing behind the scene of a live shopping stream isn’t limited to the broadcasting medium. It also depends on the product catalog that entices customers, a capable host, streaming devices, studio setup, background lights, and much more. To ease your understanding of how the mechanism behind live shopping works, here is a detailed account:
1) Find a Live Streaming Service
Livestream can become a win-win situation if you can select the right service. The good news is that you have a wide category of choices here, thanks to a number of SaaS products and social media platforms that have readied themselves for a video interactive shopping experience.
- Live Shopping Apps for One-to-One Interaction
Live shopping apps are the perfect avenues for one-to-one or one-to-many audiences. Here, the apps are the technology backend that hosts the live stream (of course, you need a presenter) to a set of users who have downloaded the app.
- Social Media Platforms with in-built shopping options
Social media, indisputably, remains the most popular mode for live shopping, given that a large number of consumers opt for such platforms. With YouTube leading the way for live streaming options, you have the option to choose Instagram Live, Facebook, and TikTok.
Host an Event on Amazon or other Live Shopping platforms
Alongside Amazon, there are a couple of other channels with some form of live shopping built-in capacity. Examples include the shoppable stories of Google Shopping, PopShop Live for highly valued merchandise, and ShopShops, a current favorite in China.
Host an Event on your Website
Many established brands like Charlotte Tilbury and Nordstrom have live shopping streams on their own website. These live streams are made for a more personalized shopping experience with one-to-one interaction between shoppers and the salesperson, or in this case, the host.
News of the live stream schedules is announced beforehand so that customers can simply RSVP from their signed-in emails and join the session.
2) Catalog your products
Much like any promotional event, it requires a lot of prior planning to have a successful live stream. The top priority factor, however, remains the products you sell. To attract customers, you will have to understand their demands and create a catalog that not only appeals but instills an urgency to buy them.
It can be limited edition merchandise for flash sales for makeup launched for a new season. Or it can be apparel that can be bought only on live shopping.
3) Select the live shopping format
There are hardly any live shopping broadcasts that are not formatted. First of all, it creates a structure. Secondly, with a script ready, the host has control over the conversational flow, especially since there are no second chances with retakes and edits.
While brands can choose to go spontaneous with their formats, there are a couple of already established ones. There are Q&A sessions where the host introduces a product, and the viewers then pose their questions about it. It can also be product tutorials for DIY items. This format is popularly used by Home Depot.
There are product demonstrations for a limited time alongside giving coupons in a certain time interval. There are new product launches with rewards for watching the stream attached. Another format is to show how a product is created; this works best for brands that sell makeup products or consumables like candy, donuts, etc.
4) Select a suitable host and collaboration partners
In most cases, the host you choose can make or break your live shopping session. Many companies choose to work with social media influencers or professional models (in the case of apparel), given their well-established appeal and popularity.
For example, in its first live shopping stream, Tommy Hilfiger brought Swiss model Manuela to garner attention from viewers. However, this is not always a requirement. Brands like Quivr, which sells cold brew coffee, has its co-founder Ash Crawford host the session.
The motive behind finding the right host is to find the right spokesperson for the brand, one who has the ability to draw viewers into the stream. This is why Brown Thomas, an Irish department store, has sales personnel operate live video calls showing the shops to a customer for a highly personalized shopping experience.
Tips and Tricks to Have a Successful Live Shopping Stream
Shopping in itself is a psychological affair, and when you bring in live shopping, it becomes all the more important to strategize. Here are a couple of tips and suggestions that you can implement for a highly successful live shopping experience:
1) Understand the A to Z of your Audience
Be it in-store, online, or live shopping, understanding your customers is a priority you can’t forgo. When you invest resources, time, and personnel in setting live steam, you must identify your target audience and what products they might need. The right way to achieve this is to go through market and consumer research.
You can demarcate your consumers based on geography so that you know you can ship the products without incurring lead times and deliver them within the expected time.
You can consider factors like their age, gender, occupation, the devices they use, and the type of content they engage in. Understanding their biography will help you select the right format, find the right host and create a catalog that will please the audience.
2) Make interactive and exciting content
One common mistake brands make with video shopping is considering them as advertisements, which isn’t the case. Unlike ads, live shopping has to be interactive and no less entertaining. The main selling point of live shopping is customer inclusion with real-time conversations.
Therefore, it is important to structure the live stream that caters to customer engagement. You can adopt tricks like the ‘ask me anything’ segment or launch a live vote for a proactive session.
3) Be mindful of personalized connection and authenticity
Live streams are not a ‘once in a blue moon affair.’ In fact, many brands do at least a bi-weekly or fortnightly livestream. Many solo entrepreneurs even do it every day, like Austin Li.
A live shopping stream naturally has the potential to create a community around the brand. This is why retailers must be mindful of cultivating personalized connections and remain authentic in their product offerings and shipping services.
4) Make the most of the Call to Action
As we know, a call to action is an important marketing tool that carries the promise of transforming passive viewers into customers who buy. Carefully crafted CTA like ‘coupon expiring in 1 min’ or ‘closing sales now’ can nudge customer psychology to confirm a sale.
CTAs can capitalize on the ‘fear of missing out’ that customers have or instill a sense of competition with fellow viewers in purchasing a product. The benefit of CTA is that it can be used anywhere in the stream, at the beginning or during breaks, or when a certain milestone is reached or at the end.
5) Market the Live Shopping Sessions
It is true that live shopping takes time to build a regular audience. At the beginning of your journey, there will be times when the viewership remains in the single digit. Therefore to build a dedicated audience, it is important to promote the live stream or, in other words, spread the word.
Social media can be extremely useful in these cases. You can announce the date and time as well as link the live stream URL in an Instagram or Facebook post. By attaching an RSVP option, you can gauge the number of participants. Sharing such information on social media will create budding anticipation amongst the audience.
Alternatively, you can run social media ads on YouTube or Instagram to expose the event and inform the benefits the live shopping will bring.
6) Optimize the Stream for Mobile Users
Optimizing live shopping for mobile is a must-do task when you consider that 73% of all online shopping is done on mobile devices. This is especially true for consumers in the U.S., India, and the U.K.
While choosing the live shopping platform, you must also consider its availability to mobile phone users. Doing so will not only help you target millennials and GenZ, who are avid mobile users but also have more sales.
Decoding Appeal of Live Shopping for eCommerce Business
There are tangible benefits to incorporating live shopping as a sales medium for any eCommerce business.
1) Replicating the in-store shopping experience
In an era where online shopping has become the norm, live shopping is the one that comes closest to in-person shopping. With the avenue for holding real-time conversations around the product and interacting with the host or other members of the stream, it has become nearly a substitute for the in-store experience.
There are multiple points of offering personalized product recommendations and engaging with customers through live shopping. Such factors, in turn, translate into good sales opportunities.
2) High Customer Engagement and Conversion Rates
If there is any example to go by, it’s China, which offers the best use case of live shopping as a great tool for customer engagement and conversion. There almost 4 out of ten customers convert, given the highly interactive nature of shopping.
Even when live shopping may not have a massive sale count during the stream, it always benefits the brand. How? Take the example of Aldo, a Canadian footwear brand that witnessed a 308% increase in customer engagement after live shopping. The first five days after their stream amassed 17000 page views from potential consumers.
3) Great Revenue Stream for Solo Entrepreneurs
Solo entrepreneurs and influencers who adopt the live shopping stream as their primary sales channel can convert that into a revenue-generating source. Take the case of the Chinese live shopping stream queen, Viya. In fact, Chinese consumers have welcomed live shopping streams as a new class of celebrity.
Live shopping has also edged its way into the U.S. market and especially for Amazon retailers, where many brand owners are using live shopping as a viable revenue source. Similarly, TikTok has become one of the most preferred mediums for solo entrepreneurs and home-based businesses for selling products.
4) Build Communities and Enlarge the Customer Base
According to some market experts like Connie Chan and Kat Akbari, live shopping develops and entrenches customer relationships. Live shopping fits perfectly with the demand for authenticity and meaningful transactions.
Live shopping helps brands open the door to customer scrutiny by showing how products are made, showcasing tutorials, and interviewing past customers. Along with a host that pulls customer attention, live shopping allows the brand to build community and regular viewership and, over time, enlarge its customer base.
5) Greater Product Selection and Display
From fashion to beauty products, electronic devices to cakes, live shopping compliments every product in the industry. Though fashion and beauty brands are the greatest benefactors of live shopping, recently, other categories have deepened customer relationships with live shopping. This includes home furnishing, home products, and electronics like watches.
Recognizing Hurdles in the System
Even with all the positives in the live shopping system, it is not beyond its own set of hurdles. In this section, we highlight some of the most important cons of live shopping:
1) Technical Glitches and Digital Customer Behaviour
Given that the stream happens in real-time, it leaves very little space for any error, including technical glitches. Since live streaming is still in its nascent stage in the West, the technology powering live shopping has yet to mature. One recurring issue plaguing live shopping is live broadcast latency.
Similarly, it is important that retailers offer a smooth checkout process for customers, including streamlined payments, shipping alerts, and notifications. They also have to take into account return and exchange possibilities and duly set up a procedure to facilitate them.
2) The tricky way with Influencer marketing
Influencers can be a great asset during live shopping or make a liability. While influencers certainly provide social trust and their recommendations are deemed valid, they also often always bring a sense of urgency. For example, customers may remain with the stream as long as their favorite influencers are there. This can make the brand dependent on influencers.
Moreover, influencers may not necessarily have the natural flair of brand spokespersons and sales personas. They can be really good with promotions but may not be the best when it comes to passionately communicating about the products.
3) Big Platforms are Rolling Back Live Shopping
Although live shopping is massively popular in East Asian countries, the same cannot be said for the West yet. This is especially true now that Facebook has already rolled back its live shopping tool, and Instagram is said to follow with the same in March 2023.
When big platforms like Facebook and Instagram are removing themselves from live shopping, it goes without saying marketers and retailers have lost out on the consumers of these platforms.
4) Return Rates are a Cause of Concern
Like any other shopping experience, returns are a major concern for live shopping retailers. Returns almost always negatively impact brand image, however, with live shopping, it aggravates the issue further. Customers may remove themselves from the stream altogether in the future,
5) The Mismatch Between Shopping and Entertainment
Though live shopping requires a hefty dose of entertainment, it still has to reserve focus on shopping. Therefore balancing the ratio between interaction with customers alongside entertaining views is tricky.
Conclusion: What’s the Way Forward
Live shopping is certainly the trend nowadays. With 17% of consumers in the U.S. and 40% in East Asian countries like China, live shopping is on the rise. By melding human interaction with seamless shopping, live broadcast has become a substantial part of people’s shopping experience post-COVID.
The trend is predicted to remain so and even expand in the near future.
1) Is YouTube a live shopping channel?
Technically, no. Though YouTube issues live broadcasting to its users and allow anybody to join a YouTube broadcast, it does not offer shopping cart plugins to be attached. This means broadcasters can show a live stream of products and can link the product details and information on the description page of the video. However, they cannot offer a real-time shopping experience with a live checkout option to viewers.
2) What are the best platforms for live shopping?
There are a number of digital applications and eCommerce platforms that offer live shopping. Some popular ones include Amazon Live, Shopify Plus, ShopShops, NTWRK, PopShopLive, and Google Shopping. To determine the best live shopping platform, you can consider these factors: number of users, shopping cart support, broadcasting latency score, chatbot support, etc.