Alanna Gregory
More posts from Alanna Gregory
What comes to mind when you think of livestreaming? In the U.S., most people would name their favorite celebrity leading a Q&A on Instagram or a gamer doing a speedrun on Twitch.
In China, it’s shopping, streamed live.
Livestream e-commerce has taken off in China in the last few years and is expected to yield more than $60 billion this year. In 2019, 37% of online shoppers in China (a cool 265 million people) made purchases on livestreams — and that was well before quarantine. In 2020, it’s estimated to have reached around 560 million people.
During Taobao’s annual Single’s Day Global Shopping Festival in 2020 (China’s Black Friday), livestreams accounted for $6 billion in sales — nearly doubled from a year earlier.
Starting to see a trend? The big U.S. companies have noticed, and they’re jumping on the bandwagon faster than you can say, “Swipe up to buy now!”
Last December, Walmart livestreamed shopping events on TikTok. Amazon released a live platform where influencers promote items and chat with customers. Instagram launched a Shop feature that encourages users to browse and buy within the app. Facebook also kicked off Live Shopping Fridays for the beauty and fashion categories.
Startups are growing fast to keep up with the heavy hitters — PopShop.Live raised $20 million to let people buy everything from books and toys to jewelry from sellers who livestream their offerings, and Whatnot raised a $50 million Series B, largely to expand its livestream commerce infrastructure. There’s also a burgeoning category of SaaS tools such as Bambuser, which is working with brands like Klarna to test native livestream shopping directly within branded apps.
At this pace, retailers will all welcome livestream commerce teams like they have influencer partnerships in recent years. It’ll just be part of the digital equation to stay competitive and relevant in the future of marketplaces and e-commerce.
From B.C. to 5G: The evolution of shopping
What is old is new again. Your grandparents spent years watching QVC because it balanced the experience of speaking with an associate with the convenience of their retirement community’s TV room. Livestream is today’s version of “shoptainment,” where hosts showcase products dynamically, interact with their audiences and build urgency with short-term offers, giveaways and limited-edition items.
Now, with livestream commerce, hosts can form deeper customer connections and answer questions in real time. It’s a new standard of communication that holds a longstanding truth from Istanbul’s Grand Bazaar to smartphones: People shop to kill time and are more likely to buy when they feel connected with a salesperson.
Armand Wilson, head of Marketing at Whatnot, has a vision for what livestream commerce can be: “It’s an entertaining way for shops to tell the story behind their products. It brings buyers closer than ever to their favorite creators and allows them to have a voice in the conversation. When you combine this type of interactivity with the passionate audiences of collectors, you begin to see the magic that is taking place.”
Kirill Avery, co-founder of Y Combinator-backed Lalabox, echoes the sentiment that engagement is the main innovation in livestream commerce. “We’re more like a fun game than a shopping app,” he says.
How livestream e-commerce will operate
It’s no secret that the rise of social media led to the birth of the creator economy. SignalFire leaders Yuanling Yun and Josh Costine write about this emergence as a result of several layers: Social media was followed by influencers, influencer marketing and SaaS tools, all of which formed the foundations of the creator economy.
It stands to reason then that there is plenty of room for companies to grow and thrive as the livestreaming space takes off.
There are four major trends that might emerge, likely in this order:
Networks: Facebook has a competitive advantage in scale of consumers, but its CPM revenue model, which monetizes ads, will likely hinder it from winning in the space. Facebook wants users to take action on content so that advertisers get the performance they want. In livestreaming, advertisements on top of shows would be onerous for the viewer, users might watch a full show but never buy; fans might focus on specific creators and influencers, and the overall behavior will trend toward long-form creator engagement over feed-based scrolling. Facebook will have to adjust its structure to win at livestreaming.
SaaS streaming tools: Tools like Bambuser help brands natively host live video shopping on their site and app, helping them engage and build communities on their own platforms. The key advantage here is engagement and data: Rather than rely on networks, as many do on Facebook and Instagram ads, these shopping shows can be hosted on an application the brand controls, designs and directly monetizes. With iOS 14’s significant privacy changes, less public data is available and brands are already looking to build more direct connections with their audiences. This makes sign-up at the top of the funnel the most important data point in livestream commerce.
Host discovery and outreach tools: Similar to influencer campaign management tools like Grin, Upfluence or CreatorIQ, there will be platforms that let companies run, manage and track campaigns at scale. Brands that have the resources to produce their own livestreams but need help finding the right host or face for their events will see new tools that let them manage these gaps in their campaigns.
Host marketplaces and agencies: Similar to influencer networks like Famebit, there will be new platforms that let companies find and connect with hosts. Brands that don’t have the infrastructure, team or budget to build platforms for their livestreams could outsource these activities to marketplaces and agencies. This will be a boon for emerging influencers still finding their monetization paths on platforms like TikTok, where they might have a niche audience without the sponsorship to support a full career.
For brands, SaaS streaming tools will be the most impactful way to take advantage of livestream commerce trends. This includes integrations with shop and social media management tools for broadcasting, as well as with CDP and email tools.
All of this will be incredibly transformative in a few ways:
- A powerful alternative to the product detail page: From a customer acquisition perspective, livestreaming offers a highly potent alternative for landing pages coming from direct ad traffic. Customers could join live events or watch video-on-demand, replacing a product page that would’ve otherwise been the focus. Frost Li, former VP of growth at Wish, is currently working on a livestreaming product and shares this sentiment: “[livestream shopping] creates much higher conversion and long-term loyalty when users get to interact with brands directly.”
- Brands can (finally) own their data: Right now, brands heavily rely on social channels like Facebook and Instagram to collect user data, manage event RSVPs, track conversions and monitor engagement metrics that drive sales. Brands don’t own this data, third-party networks do. SaaS tools that enable native ownership of livestreaming will put valuable customer insights in the hands of marketing and product teams.
- Key features: Owned video and audio content that’s host-based and replayable will allow brands to massively expand their content footprint, engagement and customer loyalty. This will in turn provide more clarity toward the channel’s performance than what was previously available, making it possible to run a brand’s video content like a performance channel, including A/B testing, evergreen content, niche-based marketing and segmentation, and more.
Companies should get ready to jump in
Livestreaming seems like it will be a new pillar that brands must consider when building their omnichannel marketing strategies, joining the current trinity of in-store experiences, traditional e-commerce and social media. This won’t — and shouldn’t — be a one-size-fits-all strategy, and there will be a wide spread between the companies that quickly dominate the space and those that struggle to get off the ground. This channel will likely further break down into asynchronous versus true live video content, creating even more ways for brands to engage potential buyers.
Marketers will be challenged to consider how brand campaigns can thrive and stay competitive in this new channel. Livestream e-commerce will probably be mastered by native DTC brands that already understand the value of engaging content and community outreach. Social media and influencer marketing did allow a new set of challenger brands to rise, but after all, these are just tools and mediums. The best storytelling will always win.
Comment