What Is Livestream Shopping? Retailer’s Guide to Live Commerce
This article is part of a larger series on Retail Management.
Livestream shopping is when companies, brands, or entrepreneurs host a livestream event where shoppers can view, learn about, and purchase products. The biggest difference between traditional ecommerce and livestream shopping is that the latter gives shoppers a chance to interact, ask questions, and get answers in real time. It’s a unique environment not replicated by a standard online shopping experience, which typically consists of just words and pictures.
Livestream shopping includes video, two-way engagement, and additional content to help potential buyers get to know products and feel confident enough to purchase. Plus, its nature gives the impression that it’s less scripted, more off the cuff, and thus more authentic.
Let’s take an in-depth look at livestream shopping (which is predicted to drive $35 billion in sales in the US by 2024)—how it works, types of livestream, who uses it, and when it makes sense for your small retail business.
Independent boutiques use Instagram Live Shopping to showcase new products and collections.
How Livestream Shopping Works
Many livestream shopping events are hosted by celebrity or influencer guests. They talk about a specific product or brand and why they love it so much, allowing followers to tune in live and ask questions.
Often, livestream shopping also includes some sort of gamification or reward to incentivize people to tune in live instead of watching a recording later. Plus, livestream shopping gives them the chance to interact in real time, offering an opportunity to ask super specific questions and get quick answers.
Livestream Shopping Platforms
To host a livestream shopping event, you’ll need to get set up with a platform. There are two main ways to do this: You can either use an established channel like Facebook or Amazon or go independent with a platform that will allow you to host the livestream yourself.
Types of Livestream Shopping
Social Media
When you think of livestream shopping, you might think of social media livestreams. And that’s certainly relevant. Many brands leverage the audience they already have on social media and broadcast live to their followers. This is social media livestream shopping.
In this type, the livestream happens on social media. This may include Facebook or Instagram, and even Pinterest or Twitter in the future. Many times, users can purchase the items directly on the social media platform. Other merchants use a more manual process, checking to see who bought what once the livestream ends.
Learn more in our guide to social media marketing.
Influencer-based
Influencer-based livestream shopping events involve a collaboration between your brand and an influencer of sorts. According to McKinsey, consumers crave more livestreams with influencers. In fact, almost a quarter of surveyed adults said they want to learn about new products via livestream featuring an influencer or brand representative. Amazon Lives are perfect examples of influencer-based livestreams. In the case of Amazon, the influencer owns and hosts the event.
If you’re a brand looking to do an influencer livestream shopping campaign, consider the pros and cons to hosting the event yourself. If you host, you have more control over the content and the overall experience. But if you allow an influencer to host the event, you gain access to their existing audience—meaning new potential customers for you. Regardless of the approach, it’s important to thoroughly brief your influencer partner beforehand so everyone is on the same page and aware of the overarching business goals at play.
Product Launch
Livestream shopping is an ideal avenue for product launches because potential buyers typically have more questions about new products than existing ones. This type allows people to ask those questions and receive real-time answers.
Tutorial
Sometimes, livestream shopping isn’t so directly sales-based. You can also use it to give tutorials on how to use and make the most of your products. While the primary goal is to help existing customers use the products, you can also accomplish a secondary goal of driving sales.
In your tutorial livestream, you can highlight the benefits of your product in use. You can also combat any hesitations or questions potential buyers may have about your product, instilling more confidence in them to purchase.
Auction or Bidding
Another common type of livestream shopping is an auction- or bidding-based livestream. In this format, viewers who tune in have to compete against one another in a bid to purchase your items. This type of livestream shopping is especially common for thrifted and secondhand goods where flexible pricing is the norm.
Its benefits are that it encourages engagement and creates a sense of urgency, while its downside is that you may lose control of product pricing and risk selling too low (losing your profit margin) or selling too high (creating a poor customer experience and perceived brand value).
Which Consumers Use Livestream Shopping & Why
Though livestream shopping is particularly popular among Chinese consumers—two-thirds purchased products via livestream in 2019—it’s catching on globally. US-based brands like Walmart and Amazon have ventured into livestream commerce, and brands big and small are able to leverage the emerging commerce channel.
Livestream shoppers also skew younger. This is likely because they’re more tech-savvy and impressionable. In fact, Gen Z is the demographic most influenced by social media and influencers—making them an ideal target audience for your own livestream shopping strategies. Plus, 55% Gen Zers and 62% of millennials would buy newly launched products directly via live videos from brands and creators.
Which Businesses Should Use Livestream Shopping
While livestream shopping can work for small business retailers across a variety of industries, some are more ripe for the opportunity than others.
Ready for more? Read our guide on how to start a retail business.
Livestream Shopping Examples
It’s helpful to get inspiration for your own livestream shopping strategies by checking out real-world examples and considering what worked and what didn’t. Below are some examples of successful or popular livestream shopping events or sellers.
Bottom Line
Livestream shopping is an emerging ecommerce channel for big box brands and small merchants alike. McKinsey predicts live commerce will drive 20% of ecommerce sales by 2026, and Shopify reports the number of merchants who installed live shopping apps increased by 61% in 2021 compared to 2020.
And the benefits are undeniable—both during and after the livestream event. As many as 70% of sales happen post-livestream, according to Retail TouchPoints. Plus, livestream shopping can reduce the burden of returns on your business. According to Coresight Research, shoppers who make a purchase via livestream shopping are 40% less likely to make a return than customers who made their purchase elsewhere online.
And it’s not complicated to get started—you don’t need fancy video equipment or editing software. Live commerce is an excellent way to build brand awareness, cultivate authentic customer relationships, ease buyer hesitations, and ultimately drive sales.
You May Also Like …
- For more information on trends, see our guide on livestream shopping statistics
- See more online shopping statistics
- Check out other retail marketing strategies that drive sales
- Learn how to efficiently manage your inventory