LIVE SHOPPING: Social commerce arrives in digital retail

Live shopping offers retailers, brands, and digital platforms a new channel with gargantuan scope for creating markets via social media livestreams.

Mixing online shopping with social media, personal interaction is the real draw of live shopping and what gives it its cutting edge. Live shopping is exciting and brings back the fun factor. Even more so, a very real, yet heightened online experience of shopping via “attending” an event, or “going shopping with your some friends” – via a social media App.

There is also a solid informative value within the human element. Learning about a product, asking questions and getting instant feedback from the host is the ultimate experience. Buying from someone who knows the item best, makes anyone want to try it, buy it, use it, and become loyal to the brand.

But live shopping is not an entirely new way of commerce but a reinvention of the more traditional format of home shopping dating as far back as 1982 with The Home Shopping Network. Then, the idea was that a host would showcase and present the item or fashion with all the featured functions on live television. Shoppers called in and ordered their items, and the network or platform warehouse would ship directly to their home. In the late 90’s HSN went international, to Germany and Japan. This was followed by QVC. Eventually in the early 90’s you had QVC UK which was in competition with HSE (Home Shopping Europe) until the mid 2000’s, but it was short-lived.

But live shopping, an entirely new level of online shopping, has only emerged in the last few years, mixing online shopping with entertainment, with social media as the marketing vehicle.

Marcel Brindöpke, CEO of Heyconnect (Fiege Group) and Karoline Gross, Founder and CEO of Smartzer took on the hot topic at the ECD Global London recently, and discussed social commerce via social media and how live shopping is truly the next level in merchandising.

We can acknowledge the origins of live shopping in China when Alibaba Taobao, the online wholesale supplier, pioneered a new means of promotion seven years after launching their initial website shop in 2003. As a further development, they created Taobao Live. The 2016 App inspired by Alibaba’s game function premiered at the first Alibaba 11.11 Countdown Gala, a variety show where viewers can log in, play along with the show, vote for winners and more importantly, purchase products featured on the show.

Via the use of bloggers and influencers called key opinion leader (KOL), who took on to social media, live shopping quickly picked up steam by the end of 2019. Considering the adjustments to living brought on by a spreading pandemic, a new way to shop needed to be explored. Taobao Live entered the pandemic and helped change the digital retail industry in China, establishing the country as the first to own a major sales channel in less than five years and winning the first quarter of 2020 with sales via livestream hitting 150% of ROI. While China is enjoying their predicted 423bn in sales by 2023, a recent November report by Statista (Chevalier, Stephanie. “Live e-commerce sales in the U.S. 2020-2026.” Statista, 17 November 2022) stated that in 2022, livestream e-commerce sales were estimated at 17 billion dollars in the United States. By 2026, e-commerce revenues created by live online shopping are forecast to nearly triple.

In Europe, and despite the UK’S best efforts to emulate China’s hot new features, the transition to this next level of shopping has not been stellar.

Live shopping has proven a bit more difficult to build traction. It may have to do with the shutdowns of live shopping features in Facebook. TikTok also suspended the expansion of its Live Shop solution in Europe and US due to low consumer engagement. Overall, European consumers have not been convinced with the safety of live shopping via social media against the credibility of big stores like Amazon.com.uk or Shopify. Karoline says, “in the West it doesn’t really work like that, because there’s so many differences in culture, how people shop, how they experience things…for example, 98% of shopping in the West does not happen via on social platforms, it happens on e-com sites, marketplaces, retailer sites etc…people are not comfortable giving their card details to TikTok.”

Here are three key components to kicking off your live shopping channel

1. The channels

Live shopping channels can help brands move from the traditional online store or ecom site and explore the latest channel of merchandising. Marcel states,“for a brand, it’s a kind of melting pot between the personal interests of people and your brand as part of someone’s personal interest…there’s no border between shopping and interacting, that the buying is part of the experience.”.

For shoppers, purchasing a product via social media is easier than ever with a clickable link directly in the video itself, expediting the purchase process and avoiding the risk of interest lost, when redirected to another page, external online store, an overwhelming brand homepage or webshop.

Instagram’s checkout feature includes tagging, during any live shopping event. Here, consumers can directly purchase and pay via any Brand’s instagram Shop. TikTok is currently leading the way as is YouTube with their Live Stream function, but Facebook,and Pinterest are still exploring their capabilities.

E-commerce and third-party platforms are also a great way to take a brand to the next level via live shopping. Amazon Live’s function via the Amazon Shopping App allows brands and influencers to build followers and get notifications whenever they do a livestream.

Owned Channels would give brands the control that is needed when presenting content. They can present certain features and target certain groups. A case study on Karoline’s Smartzer (“VW Interactive Instagram Campaign.” Smartzer, 2022) platform, Volkswagen used their channel via live shopping to make the new Golf R video interactive for their customers to easily discover more about the features and to be able to book test drives. The interactive video was linked to Instagram Stories and In-Feed Ads.

2. The back end design

Essentially, you want a digital showroom, in which your team can interact live with customers and answer questions via a chat panel. This calls for a combination of an integrated video solution that is interactive, along with a stellar analytics tool.

Live streaming is focused on both but more the latter which is why social media Apps are perfect, they provide all the necessary functionalities. In a January 2022 study on Shopify (Lockhart, Jessica Wynne. “Live Shopping: How to Launch a Live Event (2022).” Shopify, 18 January 2022), between January 1st, 2021, and September 30th, 2021, the number of Shopify merchants installing apps for live shopping grew by 61% globally, compared to the same time period in 2020.

So far, the current options in shopping via social media is provided by the clicking on a link on any advert, that then brings you to an external online page, or shop. TikTok is the closest of social channels that is quickly on its way to offer in-stream purchases, directly from a livestream.

Determining your system requirements may involve questions on how you can even do livestream, as well as whether you are using your dedicated brand channel as a distribution of content vs a customer experience.

From a marketplace standpoint, Marcel insists, “it’s obviously R&D right now, because you have to figure out how things work and what is working and you have to learn quick and fast and then if you see that things don’t work, you have to adapt. I think there’s a lot of monetization in this, first of all, it’s basically visibility you can sell to brands, like 500 people are watching or 1000 people watching, do you want to advertise in this?” It can prove a challenge to build all sorts of tools if you don’t already have them in place. The good news is platform players can still rely on the ecom infrastructure, as well as integration to a brand’s online store (e.g. Shopify, WooCommerce).

As daunting as the onboarding may seem, the structure of live streaming is made up of components or channels already in place, and by repurposing data from high engagement of live customers worldwide, propelling a unified commerce.

3. The content

There is a great need for a next level online shopping experience, one that is past the humdrum of standard scroll and click from our smartphones. Generation X and Z’ers have continued to challenge the world from a retail marketing perspective that brands and retailers provide exciting, informative and extremely authentic content.

Brand webpages and ecom sites have, up to now, relied solely on pre-recorded videos or highly edited yet static pictures. Live shopping continues to challenge D2C approaches in that it’s not about the items, but the customer experience.

The objective is to have a livestream video or event with product experts, or online shop assistants so they can provide in-store quality support all over the world from the comfort of their homes, or designated studio with your products.

But it’s more than that. Customers, viewers or shoppers, yearn to be connected and interact with live streamers. To engage with a real person can own such an item, and enjoy the latest fashions, and offer stellar customer service, live.

Like QVC and HSN, the only interaction was a caller, live, patched in on occasion. It was always unsure if it was a “plug” or an actual customer calling. Nonetheless, the caller would speak with the host, and in the 1990’s, while interaction was present, it was limited due to the technology available then. Now, with the help of live shopping, viewers can comment, chat and be directly addressed by name from the host. Similar, but up-to-date and by far, a more interactive engagement style of commerce.

With the fast development of livestream shopping, hosting has taken on a new form, a less produced approach and style which platform players should jump on. People are now filming from their homes, as they authentically live and use these products, fashions and electronics. Karoline states, “getting a professional presenter to follow a script and learn the product and get on camera, takes not only massive amounts of effort, time, but is also very expensive”. Having hosts, self-produce a live video, using minimal equipment and in the comfort of their home – is optimal.

It’s important to note that viewers should feel like they are interacting with someone relatable and a trusted source for how those jeans are experienced in real life. For retail fashion, a component of the stream would be that the host would showcase a pair of jeans, wear the jeans and add a story of their own experience; washing the jeans, owning them in many colours and styles, thus connecting with each viewer.

Influencers and celebrities can be especially effective as hosts due to their level of trust and relatability. Karoline believes, “Ideally, you want to have two (hosts); one that knows the product well and someone that brings in that entertainment factor to the event (influencers,celebs etc.).”

Live shopping is part of the commerce new normal and it’s here to stay. With trends in recent months,exploring an important marketing tactic, in that, brands are now providing special product based drops (unlike discounts on products in conventional shops), helping brands sell at relatively higher prices.

More importantly, by providing a means to deeper engagement directly with customers, brands can continue to grow to soaring heights by showcasing their lines, building a community and selling to a loyal base of customers.

Watch the full panel on live shopping here.