Retailers today face a dilemma: their Ecommerce sites have high online traffic, but low conversion rates. Brick-and-mortar stores face the opposite issue: low footfall, and high conversions.
Both ecommerce sites and in-person shopping have individual advantages. Ecommerce sites have a much wider reach, without any geographical limitations or constraints on how many people they can serve at once. Physical retail, however, is far more interactive. Customers receive a personalized consultation, get to know the store associate, and reap the benefits of a sensory experience.
But what if there was a way to combine the two for the ultimate selling experience?
Good news! Live shopping does just that. And it’s taking the world by storm.
What is live shopping?
Also known as livestream shopping or live commerce, live shopping allows retailers to digitally broadcast their products via video and connect directly with online consumers.
Though audiences are unlimited, live shopping is far from impersonal. In fact, consumers can interact, engage, and ask questions via video or live-chat channels. They have the chance to engage with their favorite influencers and add products directly to their basket from the stream.
Livestream shopping combines the huge traffic potential of websites with the significantly greater conversion rates associated with visiting a store. As a result, it has seen enormous growth since the Covid-19 pandemic. This growth has shown no signs of slowing down, with an estimated industry worth $600 billion in China, and $25 billion in the US, by 2023.
The undisputed market leader for live shopping is the Chinese platform Taobao, owned by Ecommerce giant, Alibaba. However, as live shopping gains global traction, other social platforms – like Facebook, Instagram, and TikTok – and Ecommerce companies such as Amazon have also started to embrace live shopping.
Not convinced yet? Let’s dive into more key statistics below.
Stats show live shopping is booming worldwide
In 2020, people around the world adapted their day-to-day habits in response to the pandemic. Shopping was no exception. In the face of global store closures, many turned to online channels for a retail therapy fix. So, it should come as no surprise that livestream shopping has seen a dramatic boom over the last couple of years.
Statista reports that from pre-pandemic times to now, livestream purchasing increased by an average of 76 percentage points, worldwide. Of the regions included in the study, Europe saw the highest growth during this period, with livestream shoppers growing by 86 percentage points, followed by The Middle East (76 percentage points) and North America (68 percentage points).
What countries and regions are seeing the largest demand for livestream shopping?
Statistics show that live shopping is most prevalent, by far, in East Asia, while China dominates in demand metrics.
China
In 2020, the gross merchandise value (GMV) of Ecommerce coming from live streaming in China amounted to 1237.9 billion yuan, surging from 20.9 billion yuan in 2017, and is estimated to maintain its rapid growth to surpass 4.9 trillion yuan in 2023.
The United States
In the US, it is predicted that by 2024, the Ecommerce revenue created from live online shopping will increase threefold, reaching $35 billion.
Europe
Europe and the UK have been slower adopters of live video shopping. But the results are already encouraging, with growth showing no signs of slowing down.
Western social networks, such as Facebook and TikTok, are adopting live selling tools. In 2020, TikTok joined forces with Shopify to create shoppable video ads. Two months later, Instagram announced that its Reels video-clip feature would have a shopping function.
One 2020 survey conducted in Poland, Spain, France, and the United Kingdom showed over 40% of consumers expressed an interest in buying electronics during livestreams on Ecommerce sites or apps. In addition, 34% of European shoppers said they would be interested in fashion shopping via social media livestreaming.
Who is livestream shopping?
While the term 'live shopping' might conjure old-school, QVC-related associations, it’s key to note that these viewer demographics are very different from those of today’s live shopping audience.
QVC and teleshopping’s highest popularity is among viewers over age 55 while livestream shopping is a market growing most rapidly among Gen-Z and millennial consumers. According to McKinsey & Company, the product categories most often showcased are Apparel and Fashion (with a 36% share), followed by Beauty products and Food (at roughly 7% each).
Gen Z consumers are leading the way in social commerce too. The same McKinsey study shows that they shop and spend more online than any other demographic. Social media is the biggest influence on Gen Z consumers. So utilizing these channels for live shopping has huge revenue potential for retailers and brands alike.
When do major livestream events take place?
Although livestream shopping events can happen anytime and anyplace, brands have seen huge success holding live events on occasions like Black Friday and Singles’ Day.
Singles’ Day falls annually on November 11, and since its inception over 10 years ago, it has overtaken Black Friday as the world’s biggest shopping holiday. Initially popularized by unmarried people in China, brands recognised the potential to target consumers and launched large-scale discount campaigns. China’s Alibaba reported $84.5 billion in sales on Singles’ Day in 2021, eclipsing both Black Friday and Cyber Monday.
Singles’ Day is unique from Black Friday in that it’s oriented around live streaming. Roughly half of all merchants on Alibaba (a leading Chinese eCommerce company) used livestreaming to sell and promote their products. These streams aren’t just everyday streams — they’re full-on events, with influencers, celebrities, and industry professionals taking the spotlight. During the 2019 opening gala for Singles Day in China, Taylor Swift performed on a livestream to millions of viewers. In the first 68 seconds of her performance, over $1 Billion was spent.
Outside of Asia, livestream shopping has begun to gain traction on Black Friday. Black Friday traditionally marks the first day of the holiday shopping season and sees millions of products promoted with price reductions and special discounts. The pandemic accelerated Ecommerce sales significantly in 2020 and 2021, with Cyber Monday sales in 2020 reaching $10.8 billion – the biggest Ecommerce selling day of all time. Major retailers in the US have adopted livestream shopping on Black Friday. Last year Macy’s introduced ‘Macy’s Live,’ a new digital shopping experience that allows customers to interact with hosts and stylists and shop for products.
Sessions on top live streaming accounts can attract audiences of, on average, 266,000 viewers, leading to roughly 75,000 orders, according to McKinsey & Company, this results in an average conversion rate of 28%.
The benefits of livestream shopping are undeniable
As we have seen, the livestream shopping space is booming, and the rewards for retailers and consumers alike are huge.
For consumers
Livestream shopping removes the friction associated with physical shopping, but maintains important benefits like human interaction. It’s also a matter of ease since consumers can shop and connect from any location, at any time. The days of spending valuable time traveling to physical stores, waiting in lines, and navigating through busy shopping centers can be eliminated with live streaming! Plus, it’s not just about shopping. Live streaming brings the entertainment and fun factor that consumers so often crave on social channels, offering an engaging and interactive customer experience for online shoppers.
For businesses
Livestream shopping can and should be an invaluable part of your brand’s digital strategies moving forward. As the world emerges from the pandemic, social commerce continues to boom. In the US alone, the retail social commerce market is projected to reach over $50 billion in 2023, according to eMarketer. In the UK, where live shopping is still very new, social commerce is predicted to reach $7.46 billion by 2023, of which $3.3 billion will be from live shopping.
Given the rapidly growing market sizes, the opportunities are vast. It’s more clear than ever that live shopping is not just a passing pandemic phase. It’s here to stay.
At Emplifi, our one-to-one and one-to-many live commerce solutions have helped power live shopping for some of the world’s top brands, resulting in increased conversions and average spend. Speak with an Emplifi expert today to see how we can help you take shopping to the next level. Source: Emplifi
