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What is Live-Stream Shopping? Why Should Brands Get Involved?

What Is Live-Stream Shopping? Comprehensive article describing what it is, how live-stream shopping is being implemented, the different approaches, the outcomes and possibilities for brands.

Live-stream shopping is the next big thing to enter the world of e-commerce, already evolving from a billion-dollar industry in China. This includes influencer markets, live videos and entertainment, whilst promoting products to an infinite and engaged audience online – explaining its popularity.

This brings infomercials into the forefront of modern-day advertisement – but goes a step further. It makes it easier, more interactive and more personal to shop online.

What is Live-Stream Shopping?

To put it simply, livestream shopping offers the ability to demonstrate and ultimately advertise products to a live, online audience that can interact in that live experience. Promoters directly interact with the customers through an online video, chat or other features. Because it is live, it reduces possibility of manipulation of imagery and settings – allowing the audience to trust confidently in the brand.

Similarly, to physical retail, brands are able to develop inter-personal relationships with their customers. They are able to immerse themselves without the time pressure with the guidance of live-stream shopping.

Not only do brands build relationships and increase sales, but audiences are also entertained and engaged. Further proving why livestream shopping is taking the e-commerce world by storm.

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How and Where is Live-Stream Shopping Being Implemented?

Live-stream shopping originated in China, spreading across to both Europe and America. Chinese influencers and celebrities are producing live video content through social media to show products to their audience.

One article with CNN Business reinforced the financial potential behind this market, using China as an example. “Hu [Meng Hu] is part of a rising class of creators in China who are racing to get in on live-stream shopping, an emerging form of retail that has grown into an industry worth an estimated $66 billion.”

Alongside this it was quoted that in 2019, “China’s live-stream shopping market was worth 451.3 billion yuan [$66 billion], and is even promised to show even more growth: “that could more than double to almost 1.2 trillion yuan ($170 billion) this year.”

live stream shopping in china
‘We Chat’ Live-Streaming in China – Showing the Growing Demand for Online Shopping in Europe

LiveStream shopping has had endorsement from the Chinese state, where they call it the “new engine of e-commerce growth and encouraging live-streaming as a solution of unemployment, which has risen sharply in China due to the pandemic.”

The Introduction of Live-Streaming in the UK and the US?

Platforms in Europe and America, such as Facebook and Amazon have already implemented livestream shopping into their branding. Facebook Marketplace, and Instagram Shopping are growing channels. Over at Amazon, they have released “Amazon Live” where products are being livestreamed 24/7 in multiple different categories.

Forbes claims Amazon Live as the “Future of E-Commerce.”  Kiri Masters states that Amazon Live, “will play a significant role in online shopping going forward. We see it already at scale in China, and marketers and influencers alike in the US have embraced the platform, of which Amazon is currently kingmaker.” She goes on further to say that Amazon have “jumped in” to this trend of e-commerce, showing these brands as leaders of the future.

What is Live-Stream Shopping?
Amazon Live
Live-Video
Amazon Goes ‘Live’ With Their Own Personal Shopping Channel – Amazon Live

Media giants like Facebook and Amazon using live-stream shopping, are paving the way for other brands to follow in their footsteps. After being such a profitable success in China, it only makes sense that other world-leading organisations do the same.

One-To-Many

There are several versions of livestream shopping that companies can adopt. The examples are typically one-to-many livestreams. This is structured more like a pitch than a one-to-one conversation, where the products are marketed through a celebrity or influencer to a mass online audience.

The advertiser is able to adhere to the consumer’s needs, including interests, specific products, and any questions they may have. This leaves them with not only the product in their basket, but an experience that provides them with confidence.

One-To-One

On contrast, there are also ‘one-to-one’ live streams. This allows for companies to adopt a more personal approach to specific customers. This is a private dialogue between a product expert and an individual customer, where they are able to ask questions and get an immediate, detailed and reassuring response.

what is one to one live stream shopping?

These are known to produce a higher conversion rates, average order values, and increase the chances of the customer returning to the brand. By making the live-streaming so personal, you are able to address the consumers’ needs with detail, aiding them to invest their money in the right company.

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What are the Outcomes of Live-Stream Shopping for Brands?

The growth of the market, the higher conversion rates, margins and audience engagement all grow with the success of the other.

Due to the market expanding, it attracts a large variety of viewers, all collected in one place, to advertise their products online and capitalise on the ongoing growth.

Brands are able to save precious budget on advertisement, due to the lower cost of influencers and celebrities. Not only does the cost to advertise the product drop, the conversion of customers buying this product increases – so not only is it a more cost effective way, it is also a more efficient way of producing results.

China again shows compelling examples of promotion through celebrities, with the likes of Kim Kardashian: “Twelve million people watched as Kim Kardashian West opened a mah-jongg set on screen, displaying the domino-like tiles of the popular Chinese game.” Because of this, alone, “she sold 150,000 bottles of the perfume in a matter of seconds.”

live stream shopping
Kim Kardashian making an appearance on a Chinese Live Streaming Channel in 2019

The overall afficacy of live-stream shopping has proved itself in China. Brands will be able to follow in their footsteps, in order to increase their sales and conversion rates, without having to lift a finger.

What Are the Benefits of Using Influencer Marketing?

Kelsey Libert comments on Influencer Marketing in her blog, “an influencer’s true power is two things: trust and credibility.” She continues to say that “the influencer has built a foundation of truth between themselves and the specific audience. This is not something easily translatable in traditional advertising tactics. The influencer is not the sellout; they are the friend you wish you had, the one who sells you something because you believe in it.” Not only do influencers produce an ideal market to promote branded products, they bring trust to the fore-front.

If the products are advertised by an influencer or celebrity, they already have an established audience that watches them. The loyalty that the influencer experiences is transferred to the brand, increasing engagement and conversion.

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The Acceleration of Live-Stream Shopping in the Last Year

The live-stream shopping benefits are stacking up – it is all able to be done without leaving the home, and in the times of COVID-19, that is a desirable approach for both brands and customers.

There has been a surge in sales online since COVID-19 – brands and companies were forced to either move online or accelerate their online presence. It’s shown that “In the United Kingdom, weekly online retail transactions made in home and leisure categories saw a 200 percent increase since the start of the year.” Continuing, “weekly growth rate for home and leisure retail went up by 200% compared to the same period of the previous year.”

The Future of E-Commerce

There have been predictions that online retail statistics will continue to stay high, despite some people returning to in-store transactions. Rhys Dalgleish evaluates the statistics through a blog stating that “at the height of the pandemic restrictions in April 2020, retail sales fell by a quarter compared with pre-COVID levels. While overall sales have now recovered this lost ground, in store sales are still nearly 10% down, while those online are still up by nearly half on the start of the year.” Whilst evaluating the online sales he states that both food and retail, “still reported a 70% increase in online sales during August, when compared with pre-COVID levels.”

What is Live-Stream Shopping?
online shopping e-commerce
The Evidence Towards the Growth in the E-Commerce Retail Industry, January to March 2020

Although COVID has highly detrimental to the economy as a whole, it has accelerated the progression of live-stream shopping and e-commerce, to a point of no return, even after a pandemic.

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Developing the Relationship Between Brand and Consumer

live stream shopping

Livestream shopping has been predicted to continue to grow at large scales, even after the limitations of the pandemic. With platforms like Amazon and Facebook implementing live shopping into their online spaces, it shows audiences and other brands the way forward.

Aside from the financial and social benefits from live-stream shopping – it also synthesises a bond between the customers and the brand, that in unavailable elsewhere.

Why Is This Relationship Important?

Audiences are consistently engaging and interacting with the brand, allowing e-commerce to see a positive change in consumer-marketer relationships. There is more trust and overall satisfaction.

In an academic article by Anupam Sharma and Deepika Jhamb, they state that the “results are supportive that more than 50% of customers have changed their traditional shopping habits by ordering products online.” They both predict that the “online shopping adoption is likely to become permanent.”

Suzin Wold for Marketing Week, illustrates this change in consumer behaviour. She states that consumers have shifted from prioritising quality (pre-COVID) to availability, stating that “respondents said that they have experienced product shortages at stores from which they’ve tried to make a purchase.” Wold predicts that there will be a change in loyalty towards brands because of the vast online choices.

What is Online Shopping?
What is Live-Stream Shopping?
when searching for online shopping
Online Shopping Has Surged Since the Pandemic, Where it’s Success is Likely to Last

The rapid development of e-commerce and live shopping has progressively shown that in-person retail can be replicated without leaving the house. This relationship between the audience and the advertiser allows the authenticity that online shopping just didn’t provide prior to live-stream shopping.

Why, as a Brand, Do We Need to See This Shift in Relationship?

This positive evolution between brand and customer allows companies to heighten conversion rates, higher order totals overall, and higher satisfaction levels from both parties.

Brands are then able to see their interaction with customers become more personal, and show online authenticity.

The Today Show, is a clear example for other brands: “sold more than 2 million products during the holidays, the site bought in more than $12 million during Cyber Week.” Jill Martin, as the host, reinforces the idea that this relationship between the audience and the host is vital, “People want to buy something from someone they trust,” she then credits the relationship: “I have established that trust with the viewer.”

What is Live-Stream Shopping?
live-stream shopping
Jill Martin, The Today Show – Showing The Obvious Market for Live Stream Advertisement and Marketing

The Today Show is an example of companies adopting live-stream shopping, and proving it to be beneficial. As the concept grows with more brands taking part, this will become the modernisation of infomercials.

During COVID-19, this change in relationship has been necessary in order for brands to stay connected to their customers. Brands are now in danger of becoming out-dated with the addition of live-stream shopping and the growing importance of an online presence.

What is the Overall Benefit of Live-Stream Shopping to an Evolving Society in the Retail Industry?

Live-stream shopping and online retailers have benefited during the pandemic – but it has also contributed to a more progressive approach to shopping itself.

Brands have been able to develop methods that are more efficient and effective than in-person retail could ever – or have ever – been.

The pandemic has shown that online presence is a necessity for a successful brand, and new digital advances. Customers who have never been able to reach a store can now have an in-person conversation with an expert. Groups who have compromised mobility – the ability to get out of the house, or a long trip to a city to visit a store now have access to brands that wasn’t possible before. In addition, online segments that are engaged but do not purchase also have a barrier to purchase removed.

In-Person Retail VS E-Commerce

Similarly, heavy investment in property to support retail operations clearly come into question. As retail has been in decline for some time, but rents increasing all the while – the opening up of a new channel has changed the dynamics of property in the retail equation. While retail has not yet died, a refactoring of the value of prime real estate is clearly on the horizon. Live-stream shopping then creates an opportunity to increase values in less prime areas, but also contribute to the inevitable decline of often overvalued prime locations.

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