Video shopping is being hyped as the next big thing in video and shopping. But it is kind of hard to believe that livestream commerce, which has its roots in the home shopping experience we know from cable TV, will be truly transformational. Now reconsider it as a new paradigm that combines information, entertainment, and retail. And, even if you count live callers to shopping shows, livestream shopping provides a whole new level of customer connection and conversion. So maybe activity and investments are booming for good reason.
This year will be remembered as the biggest year yet for video commerce revenue. Research firm eMarketer reckons the global market for livestream shopping will rake in a massive $500 billion this year.
Break this down by region, and China accounts for the lion’s share of earnings ($480 billion). But more astounding than China’s percentage of global revenues is the speed at which livestream commerce completely has transformed the country’s retail industry. Global management consulting firm McKinsey reports it took less than five years for livestream commerce to develop into an innovative sales channel and one that regularly attracts more than one-third of Chinese Internet users.
Western companies ramp up to revenues
The U.S. market may be nascent in comparison, but the pay-off for early adopters is impressive. Data from management consulting firm Activate’s Technology Media Outlook 2022 pegs revenues at $11 billion this year, up from $6 billion in 2020.
Big names need little convincing. From online retailers Amazon and Alibaba to big tech and social giants Facebook, Pinterest and TikTok and Twitter, companies are “jumping into livestream shopping hard.”
The pandemic provided a big push. At one level, strict lockdown measures have accelerated the trend of shopping online and in-app. At the other end of the spectrum, isolating at home has increased the desire of consumers, who crave connection and diversion, to interact with a new breed of creators and influencers lining up to make shopping informative and fun.
Media companies engage audiences primed to purchase
Right now, the most popular combination to power livestream shopping is social networking platforms and retailers. However, media companies offer ideal partnerships. They alone can position offers where they matter most: the point of inspiration where customers are consuming content and open to suggestions.
“It’s really about creating an experience where content meets commerce,” Bryan Moore, co-founder and CEO of talkshoplive, a live streaming, social sales network, told me in an email interview.
He believes that the ideal intersection occurs by “connecting the retail and media landscapes.” His company has worked with Conde Nast and Hearst, retailers like Walmart, and creators from Oprah Winfrey to Dude Perfect on live commerce. Which maximizes distribution and, he says, “converts the most sales by cutting out all friction.”
This month BuzzFeed was the latest media company to announce a partnership with talkshoplive. The live stream with creators Carolina Reynoso and Vivian Nweze celebrates BFF-entine’s Day, highlighting product recommendations, gifts and much more. It follows a string of more than 50 livestreams on destinations, including Amazon Live, the retailer’s shoppable livestream offering.
Another fast-mover in livestream commerce is NBCUniversal. The media company launched its commerce capabilities on its One platform in 2020. Since then, the company reports it has created over 250 different pieces of shoppable content and counts over 200 active retailers on its platform.
From experimentation to execution
The number of media companies doubling down on livestream commerce continues to grow. But so does the competition.
New data from Sensor Tower, a company providing market intelligence and analytics for the mobile app economy, shows that one-third of the top 15 apps (measured in downloads) in the U.S. have “either already experimented with livestream shopping events or have announced plans to test livestream shopping in the near future.”
To up their game, media companies will need to be brave and broaden their approach beyond just driving affiliate conversions. The real power of livestream commerce is not about pushing products or driving sales.
The deeper goal should be to build affinity for an interactive shopping experience – not just drive a purchase. Done right, whether the consumer purchases or not, the experience continually and consistently delivers something far more valuable: memorable and meaningful engagement.
How to do live shopping right
On the face of it, livestream commerce is a perfect match with campaigns to sell beauty, fashion, decor and other items where brands and merchants pay the highest commissions. But this opportunity goes far beyond lifestyle. There are opportunities in many other verticals, including B2B software and services. Whether you opt to target consumers, or cater to business professionals, your first task is to enable the conversations and interactions that power commerce.
Cultivate creators to add authenticity
Encourage niche creators who can enhance the experience (and the reach of your retail partners) and open the aperture of how you view opportunities in the Long Tail. Reams of research show the engagement rates for nano-influencers are up to ten times those for mega influencers and major celebrities.
Expand capabilities to create customer value
Position your company to present shoppable products to your audience in a way that maximizes convenience and minimizes friction. Choose platforms and partners that will allow consumers to enjoy the programming and the purchase experience. If possible, don’t just align with a livestream partner. Build the talent and tech in-house to run your own livestream platform. It can be a significant investment, but it also positions you to go after brands and opportunities that value access to your audience and are willing to pay a premium for it.
Draw from data and consumer behavior
Livestream commerce requires deep commitment and insights. Be prepared to set up a team to manage these activities and “own” the customer. More importantly, equip them to build personas of potential customers and segments to understand the audience. This will also help you understand which interactive perks (games, giveaways, quizzes) are likely to keep these consumers engaged and entertained.
Experience, engagement, and (yes) earnings
Content is king. But it takes more than compelling and trustworthy reviews and recommendations to enhance the livestream shopping experience. While incremental – or even significant – revenue is a compelling reason to move into live shopping, it offers other meaningful rewards.
Today’s consumer enjoys an end-to-end experience that media companies are uniquely poised to offer. From the moment of interest, to inspiration and even investment, the media ecosystem can truly engage consumers in a way few others can. Live shopping experiences offer a new way to leverage content-based customer experiences to increase engagement and, yes, feed the bottom line.