You might have heard of it before, but what is it and where did it all begin?
Live shopping or livestream shopping is a fairly new e-commerce trend that provides an alternative way of advertising products. It has its roots in the Asian market but has started gaining traction outside of Asia. Although the trend is still in its early stages, experts are expecting a great rise in revenue from live shopping-based e-commerce. For example, live shopping generated $5.6 billion in US sales during 2020, and the revenue has been estimated by the Coresight research team to reach $35 billion by the year 2024. All this is still small compared to the revenue live shopping e-commerce is generating in Asia. An analysis by McKinsey estimates that Chinese sales will be reaching $423 billion in 2022.
Live shopping started gaining popularity back in 2015, but it took a couple of years for it to reach the North American and European markets. It wasn’t long until live shopping had taken root in western e-commerce too and we started seeing many success stories around the phenomenon. Recently many of the largest social media platforms such as Facebook, Instagram, Twitter, and Tiktok have implemented live shopping into their systems.
The success and sudden rise of live shopping can also be partly attributed to the covid-19 pandemic which has had the world in its grasp for the past couple of years. Buyers want to see a face selling the product, instead of just staring at a picture of a product on an online store. Seeing and being “live” while doing the shopping gives customers the feeling that resembles in-person shopping, which they might not have felt in a while.
So what is live shopping exactly?
So now you are probably getting tired of the term Live shopping, but you still don’t know what it is. As you can most likely figure out from the term itself, live shopping is shopping done while watching a livestream of a seller, or in some cases, an influencer showing off their products.
From the seller’s viewpoint, live shopping is basically showing off your products to the potential buyers who are watching the livestream. Most live shopping apps and implementations have a function that highlights the item that the seller is currently presenting to the audience. On top of selling, Live shopping allows the seller or the presenter to connect with the audience much better compared to normal online stores or social media content. Connecting with your audience is always a good thing, and drives an increase in sales, and long-term customer loyalty.
As for customers' perspective, through interactive streaming apps or services, they get to enjoy the in-person shopping experience from the comfort of their homes. Seeing the product they are or will be interested in “real life” and possibly in use, gives customers confidence in making the buying decision. Customers also can ask questions from the seller which will further drive their want to buy the product being shown.
Live shopping shouldn’t be just used for advertising, but also for the viewer's entertainment. The longer a possible customer is watching the livestream, and the more the customer is enjoying his or her time, the more likely they are to make a purchase.
Many large companies have hired popular influencers and celebrities to show off their product, in order to drive higher viewership numbers. Even Kim Kardashian has appeared on a live shopping event in the past, in which she helped Chinese influencer Viya sell hundreds of thousands of cosmetic products in seconds.
Why should you care?
Whether you are a seller or a buyer, you will be hearing a lot more from live shopping in the coming years. Especially as a seller or as an influencer looking to launch a product line or advertise one.
Analysts say that compared to traditional e-commerce, live shopping has multiplied the conversion rate from 2-3% to upwards of 10-20% in some cases. Some naysayers think that live shops have an under 1% conversion rate. This data is still partly unreliable since the live shopping trend hasn’t hit western markets in full force. So we must look to the biggest eCommerce markets for more reliable information. Shopify says in its article, that in the Chinese market conversion rates are even higher, even up to 40% for some live shopping streams.
Although thoughts on conversion rates may differ, live shopping has a lot of potential. The biggest potential is with the younger generation, who spend more and more time on the internet, and more specifically on social media.
Shopify’s article also says that as a result of live shopping the item return rates have gone down in a major manner. According to their data customers are 40% more unlikely to return a bought item. This is the cause of customers getting to see the product so they don’t make as many purchases that they will regret doing, as opposed to a traditional online store, which leads us to the next subject.
Showcasing products is one of the strong points of live shopping. It is important for the customer to get a good look at the product, which live shopping allows much better than traditional online stores. Viewers asking questions about a product can lead to others than the one asking to make the buying decision. There are numerous ways to showcase a product. Fashion live shops show a model or models wearing the clothes and accessories on sale, furniture sellers show people trying out the furniture and giving their opinions, and so on. Only the seller's imagination is the limit.
Arguably live shopping’s strongest point is the ability to connect to the viewer base and create meaningful connections between the viewers and the presenter. A great example of this connection is the live shopping stream run by the aforementioned Chinese influencer, Viya. Viya has built herself a strong and loyal audience, even having die-hard supporters calling themselves the women of Viya.
Different ways of live shopping
When choosing the live shopping platform there are multiple choices to pick from. Social media influencers will most likely gravitate towards the platforms they are most popular on, since most of these platforms have already built integrated live shopping systems.
For those looking for more customization and freedom when setting up a live shopping livestream, eCommerce platforms like Shopify have the answer. Shopify hosts a variety of different live shopping applications that can be installed on the seller's online store. These applications usually allow for the seller to add a livestream section on their website, where customers can follow the stream and make purchases right there on the spot, without having to download and install additional software.
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