It is no secret that the pandemic has prompted more people than ever to shop online.
Figures from the Office for National Statistics show how, in September, retail sales volumes enjoyed their the fifth consecutive month of growth, up 1.5% compared with August and an increase of 5.5% when compared with February’s pre-pandemic level.While the proportion of online sales – at 27.5% – has dipped slightly from August’s figures, it is still greater than February’s 20.1%. Research from McKinsey predicts many first-time online shoppers plan to continue to shop in this way across all categories. Now, with local lockdowns and the Government’s three tier system of measures to try to control the spread of Coronavirus, online sales are expected to remain healthy, especially with the approach of Black Friday and Christmas creating seasonal demand.
What is livestreaming?
Marketers often compare livestream shopping to social media influencer campaigns. While there are some similarities, one notable difference is the timeline. Livestream shopping requires quick execution from brands and streamers. The entire process, from when marketers reach out to streamers to when streamers promote the products, can be done in less than a week.
Livestreaming is primarily a Chinese phenomenon, where an estimated 100 million viewers watch a live online video every month, but its success is prompting more and more brands to take its appeal seriously and explore new ways to adapt the model to reach wider global markets.
As a high-energy social experience, it sees popular celebrities livestreaming their shopping trips in real-time, often around a staged store, where they can demonstrate and talk about products and respond to questions from a digital audience. All the time they are talking, the audience can purchase the product, often at a highly discounted price for a very limited time, increasing the sense of urgency around online purchases to great effect.
The model is not a straightforward one to apply around the globe, as the systems on which it thrives are more fragmented outside of China. In China, the livestreams take place within the same ecommerce platforms as where the products are sold, such as Taobao, owned by Alibaba, one of the biggest ecommerce platforms in China. Taobao boasts 4,000 livestream hosts, producing 150,000 hours of content and broadcasting in excess of 600,000 products through the livestream every day.
Tesla, Procter & Gamble and supermodel-turned-beauty-entrepreneur, Miranda Kerr, among others, have turned to Chinese livestreaming superstar, Viya, to introduce themselves to the Chinese market. The queen of China’s $60 billion ecosystem of live online shopping, Viya, earned an estimated 30 million yuan in 2018, according to the most recent figures from Chinese ecommerce giant Alibaba.
Perhaps most importantly, livestreaming provides that trust and transparency that ecommerce has traditionally lacked.
Livestream shopping builds on decades of history. Since the 1980s, US television networks, like QVC and HSN, have been broadcasting presenters who sell products, from costume jewellery to pots, to millions of homes globally. But they now have to transition to the age of online shopping, as 66% of QVC sales in 2018 were made in a mobile app. They are competing with platforms like Instagram and TikTok, where younger people spend more of their time.
A different way of shopping
As people spend more time at home, they are starting to explore more entertaining shopping experiences. Retailers too have used the lockdown period to explore new online ways of selling. The beauty industry in particular is continuing to trial more livestreaming shopping experiences, while others are exploring gamification, turning the shopping experience into entertainment, a route already taken by some live auction sites like Tophatter.
L’Oréal Group recently launched live.lancome.co.uk, while H&M Group’s Scandinavian-inspired brand, Monki, was one of the first to start livestream shopping in the UK last year. Luxury brands such as Harvey Nichols and parenting shop Mamas & Papas are also offering one-to-one livestreams from the shop floor, for customers who want a personalised virtual shopping experience.
Adam Levene, founder of Hero, a technology company that facilitates livestreams for brands including Harvey Nichols, Oscar De La Renta and Deciem, says: “Consumers today want access, authenticity and connection more than ever before, and both livestreaming and virtual shopping fit that bill.”
Hero has seen a 739% increase in use since this time last year, and has found customers are 21 times more likely to buy when they virtually ’shop’ with a store associate than if they were left to browse online. This view is echoed by Sophie Freres, co-founder of LiSA, a web-based app that helps brands such as Lancome and SkinCeuticals host livestreaming events on their websites. “Livestream shopping will become as commonplace as classic online shopping or posting on social media — just as it has in China,” she says.
Estee Lauder recruited a team of streamers from the top streamer list and hosted an all-day livestream shopping show on Singles’ Day in China. The company generated 500 million viewers and six million clicks to the store homepage within Taobao and sold more than $28 million in merchandise*.
Will it take off in the UK?
But what will it require for livestream shopping to be fully adopted in Western markets? For starters, the technical capabilities of social networks and ecommerce sites in the West need to adapt, creating a seamless, transparent and trusted experience that bridges entertainment, engagement and transaction.
In markets like the US or UK, social platforms are very focused on staying social, and the systems that make the livestreaming shopping experience in China so seamless and so successful are not yet fully formed.
Unsurprisingly the tech giants are working to popularise livestream shopping with Western customers. In May this year, Google began testing a new feature on YouTube that displays product prices and recommendations under videos playing on the site. Amazon has launched its Amazon Live Creator app, which lets brands and users live stream shows featuring products available for sale on the platform.
Meanwhile, Facebook has announced a partnership with Shopify to help integrate buying on its social platforms, and it is continuing to build its community marketplace, where sellers can livestream promotional content at any time. Facebook, Instagram and Google have a distinct advantage because they can merge social media, peer reviews and payments in one place. There are also a range of live streaming apps emerging to work with these platforms.
“While the technology is there, it’s more about getting people to actually embrace it,” argues Christopher Baird, managing consultant at Capgemini.
Alibaba’s advantage is that its platform enables the audience to watch the livestream, chat with other viewers and select and pay for the product, all at the same time. A frictionless process that other platforms are struggling to emulate.
Whether livestream shopping will catch on outside of China seems to depend in part on the ability of companies like Amazon and Facebook to integrate their entertainment offerings with shopping and payments.
According to livestreaming star Viya, trust is the vital component that drives livestreaming’s success – trust in the influencer, trust in the quality of the goods, trust in the reliability of the logistics system and trust in the security of the payment systems.
It may be a good way to enter a new market, but as the audience follows the influencer and not necessarily the brand, its ability to secure long-term brand loyalty has yet to be proven.
In the meantime, influencers will continue to be an important part of the marketing mix, especially for beauty brands where building trust is key and where live demos of products are already creating rapid peaks in demand that brands need to fulfil in real-time.
Author:
Simon Clifford is sales director of specialist fulfilment and logistics company Cygnia Logistics that works with major beauty and gifting brands to fulfil social and ecommerce demand around the world.
*https://www.mediapost.com/publications/article/347443/livestream-shopping-what-marketers-need-to-know.html
You are in: Home » Guest Comment » GUEST COMMENT: Adrenaline-fuelled e-commerce – will livestreaming take off in the UK?
GUEST COMMENT: Adrenaline-fuelled e-commerce – will livestreaming take off in the UK?
Simon Clifford
It is no secret that the pandemic has prompted more people than ever to shop online.
Figures from the Office for National Statistics show how, in September, retail sales volumes enjoyed their the fifth consecutive month of growth, up 1.5% compared with August and an increase of 5.5% when compared with February’s pre-pandemic level.While the proportion of online sales – at 27.5% – has dipped slightly from August’s figures, it is still greater than February’s 20.1%. Research from McKinsey predicts many first-time online shoppers plan to continue to shop in this way across all categories. Now, with local lockdowns and the Government’s three tier system of measures to try to control the spread of Coronavirus, online sales are expected to remain healthy, especially with the approach of Black Friday and Christmas creating seasonal demand.
What is livestreaming?
Marketers often compare livestream shopping to social media influencer campaigns. While there are some similarities, one notable difference is the timeline. Livestream shopping requires quick execution from brands and streamers. The entire process, from when marketers reach out to streamers to when streamers promote the products, can be done in less than a week.
Livestreaming is primarily a Chinese phenomenon, where an estimated 100 million viewers watch a live online video every month, but its success is prompting more and more brands to take its appeal seriously and explore new ways to adapt the model to reach wider global markets.
As a high-energy social experience, it sees popular celebrities livestreaming their shopping trips in real-time, often around a staged store, where they can demonstrate and talk about products and respond to questions from a digital audience. All the time they are talking, the audience can purchase the product, often at a highly discounted price for a very limited time, increasing the sense of urgency around online purchases to great effect.
The model is not a straightforward one to apply around the globe, as the systems on which it thrives are more fragmented outside of China. In China, the livestreams take place within the same ecommerce platforms as where the products are sold, such as Taobao, owned by Alibaba, one of the biggest ecommerce platforms in China. Taobao boasts 4,000 livestream hosts, producing 150,000 hours of content and broadcasting in excess of 600,000 products through the livestream every day.
Tesla, Procter & Gamble and supermodel-turned-beauty-entrepreneur, Miranda Kerr, among others, have turned to Chinese livestreaming superstar, Viya, to introduce themselves to the Chinese market. The queen of China’s $60 billion ecosystem of live online shopping, Viya, earned an estimated 30 million yuan in 2018, according to the most recent figures from Chinese ecommerce giant Alibaba.
Perhaps most importantly, livestreaming provides that trust and transparency that ecommerce has traditionally lacked.
Livestream shopping builds on decades of history. Since the 1980s, US television networks, like QVC and HSN, have been broadcasting presenters who sell products, from costume jewellery to pots, to millions of homes globally. But they now have to transition to the age of online shopping, as 66% of QVC sales in 2018 were made in a mobile app. They are competing with platforms like Instagram and TikTok, where younger people spend more of their time.
A different way of shopping
As people spend more time at home, they are starting to explore more entertaining shopping experiences. Retailers too have used the lockdown period to explore new online ways of selling. The beauty industry in particular is continuing to trial more livestreaming shopping experiences, while others are exploring gamification, turning the shopping experience into entertainment, a route already taken by some live auction sites like Tophatter.
L’Oréal Group recently launched live.lancome.co.uk, while H&M Group’s Scandinavian-inspired brand, Monki, was one of the first to start livestream shopping in the UK last year. Luxury brands such as Harvey Nichols and parenting shop Mamas & Papas are also offering one-to-one livestreams from the shop floor, for customers who want a personalised virtual shopping experience.
Adam Levene, founder of Hero, a technology company that facilitates livestreams for brands including Harvey Nichols, Oscar De La Renta and Deciem, says: “Consumers today want access, authenticity and connection more than ever before, and both livestreaming and virtual shopping fit that bill.”
Hero has seen a 739% increase in use since this time last year, and has found customers are 21 times more likely to buy when they virtually ’shop’ with a store associate than if they were left to browse online. This view is echoed by Sophie Freres, co-founder of LiSA, a web-based app that helps brands such as Lancome and SkinCeuticals host livestreaming events on their websites. “Livestream shopping will become as commonplace as classic online shopping or posting on social media — just as it has in China,” she says.
Estee Lauder recruited a team of streamers from the top streamer list and hosted an all-day livestream shopping show on Singles’ Day in China. The company generated 500 million viewers and six million clicks to the store homepage within Taobao and sold more than $28 million in merchandise*.
Will it take off in the UK?
But what will it require for livestream shopping to be fully adopted in Western markets? For starters, the technical capabilities of social networks and ecommerce sites in the West need to adapt, creating a seamless, transparent and trusted experience that bridges entertainment, engagement and transaction.
In markets like the US or UK, social platforms are very focused on staying social, and the systems that make the livestreaming shopping experience in China so seamless and so successful are not yet fully formed.
Unsurprisingly the tech giants are working to popularise livestream shopping with Western customers. In May this year, Google began testing a new feature on YouTube that displays product prices and recommendations under videos playing on the site. Amazon has launched its Amazon Live Creator app, which lets brands and users live stream shows featuring products available for sale on the platform.
Meanwhile, Facebook has announced a partnership with Shopify to help integrate buying on its social platforms, and it is continuing to build its community marketplace, where sellers can livestream promotional content at any time. Facebook, Instagram and Google have a distinct advantage because they can merge social media, peer reviews and payments in one place. There are also a range of live streaming apps emerging to work with these platforms.
“While the technology is there, it’s more about getting people to actually embrace it,” argues Christopher Baird, managing consultant at Capgemini.
Alibaba’s advantage is that its platform enables the audience to watch the livestream, chat with other viewers and select and pay for the product, all at the same time. A frictionless process that other platforms are struggling to emulate.
Whether livestream shopping will catch on outside of China seems to depend in part on the ability of companies like Amazon and Facebook to integrate their entertainment offerings with shopping and payments.
According to livestreaming star Viya, trust is the vital component that drives livestreaming’s success – trust in the influencer, trust in the quality of the goods, trust in the reliability of the logistics system and trust in the security of the payment systems.
It may be a good way to enter a new market, but as the audience follows the influencer and not necessarily the brand, its ability to secure long-term brand loyalty has yet to be proven.
In the meantime, influencers will continue to be an important part of the marketing mix, especially for beauty brands where building trust is key and where live demos of products are already creating rapid peaks in demand that brands need to fulfil in real-time.
Author:
Simon Clifford is sales director of specialist fulfilment and logistics company Cygnia Logistics that works with major beauty and gifting brands to fulfil social and ecommerce demand around the world.
*https://www.mediapost.com/publications/article/347443/livestream-shopping-what-marketers-need-to-know.html
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