It all started 10 years ago with Chinese influencers taking their audiences along as they travelled to the US. They used live streaming to introduce and explain new products that were not available in China.
Meanwhile, China's e-commerce giants introduced live stream chats and seamless purchasing via video.
And the consumers loved it!
In China, the state media touts live streaming as a way to combat poverty in rural areas, enabling farmers to sell products online.
In 2020, live stream video was projected to generate $136 billion in revenue in China.
The current whirlwind of activity around live stream shopping reflects several megatrends
Digital media consumption is exploding, as new technologies make it easier than ever to create and share video-based experiences.
Responding to shopping restrictions imposed by the pandemic, retailers and brands worldwide are racing to add live, interactive video experiences into their marketing mix.
Celebs and influencers are having a growing impact on purchase decisions.
During the pandemic, millions of consumers are increasingly interacting with retailers and brands online, and many will likely continue to do so long after the pandemic is over.
Many brands, such as Walmart, are taking the lead from Chinese retailers. Still, the viability of the Chinese business model is under question because of its reliance on expensive celebrities and influencers.
And the jury is still out on whether that translates into brand loyalty and repeat purchasing.
A Forrester study, done during the pandemic, found that 70% of 14,460 consumers surveyed in the UK, France, Spain and Poland expressed interest in live stream shopping.
Among the things they value about live stream shopping are saving time, finding cheaper deals, and getting access to a wider product range.
Among surveyed consumers who are interested in live stream e-commerce, almost 50% increased consuming 'shoptainment' content as a result of the pandemic.
Top live stream content reflects the latest in consumer trends.
Electronics, fashion, and cosmetics are the top categories that draw consumers’ attention to live streaming.
- 40% of surveyed consumers (predominantly male consumers) are interested in purchasing electronics, and that’s more than 10% higher than through social media and social media influencer content.
- For fashion and cosmetics products, consumers (predominantly female) are equally interested in e-commerce live streaming and influencer product content on social media.
People seem to be attracted to game-like features such as individual games (40%), collecting coins (40%), fortune wheels (35%).
Younger consumers prefer more interactive and collaborative features, such as posting comments and chatting with live stream hosts and playing collaborative games with their friends.
And although consumers prefer watching live streams on their mobile devices, computers are still more popular when making online purchases.
Department stores are turning to live stream to catch up to Amazon.
They're using it to help people discover new products both in-store or online.
Nordstrom recently announced that they're launching a new page on their website dedicated to livestream shopping and they are planning to host several livestream events each week throughout 2021.
We've all seen how brand after brand is turning to DTC since the start of the pandemic.
And for major department stores live streaming can be another tool to convince brands to direct more inventory to the department store, rather than back to their own website.
What you need to pay attention to
Compared to China, shoppers in the EU and US aren't super familiar with live stream retail.
The biggest gap between the Chinese and European or American retailers is digital maturity.
More specifically, retailers need to make it easier for people to make a purchase from a live stream and integrate social features to help influencers engage and even grow their own following.
Influencers in the US and Europe also need to start embracing live stream shopping.
It always takes a while for consumer behaviour to change but this change is accelerated. Because our shopping behaviours have transformed faster than anyone could have predicted before the pandemic.
Pundits had already declared that live streaming dead in 2019 and just look at it now.
First, brands need to sort out more practical challenges: building an audience, managing the ever-increasing cost of buying online traffic etc.
The cost of paying an influencer or investing in paid media can quickly add up and eat away at any possible gains from a live stream event.
Remember that livestreaming is more than the latest technology or the influencer of the moment.
The key to success is building lasting relationships, customer by customer.
The basic human truth behind retail has always been value exchange, human connection and the joy of discovery.
And although it's virtual, people will still randomly wander into your live stream to have interesting conversations, learn the stories behind the products, and get inspired.
So, give them a reason to stick around, once they decide to hop on.