Look at the recent rise of streaming services and off online stores, and it all starts making sense. So, finally, there’s a shift happening in how we shop.

The pandemic has forever changed the retail landscape, making it much more digital. And as brick-and-mortar stores give way to ecommerce, retailers are finding themselves scrambling for consumers’ attention in an increasingly chaotic and crowded online environment.

The answer to cutting through all that noise? Become more like streaming services.

Combining storytelling and online purchasing in what is now called “live shopping,” or live stream shopping, makes for an immersive ecommerce experience like no other. It is the ultimate combination of entertainment and utility.

Live shopping has the potential to upend everything we know about marketing and sales.

Get ready for Netflix meets retail — The New wave of excitement

Social media platforms are all in – and so are major retailers. Walmart is hosting live shopping events on TikTok. Facebook’s Live Shopping Fridays now feature brands ranging from Sephora to Abercrombie & Fitch. Instagram has a dedicated “Live” hub inside its Shopping section and ran a 10-day live shopping event with partners such as Peloton and Aveda. Amazon launched Amazon Live.

Investors are catching on too. Many now see live shopping as the next big wave in retail. NTWRK, a live shopping video app that focuses on limited-edition merchandise, recently raised $50 million from Goldman Sachs and Kering. PopShop Live and Shop Lit Live, raised $20 million and $6 million, respectively. And Whatnot, a live shopping startup, reached a record-breaking valuation of $1.5 billion.

At tech agency Reaktor, we see how our work with streaming services such as Netflix now informs how we work with our clients in retail. As a result, the two spheres overlap more than ever, and they create increasingly fascinating synergies.

What is live shopping in practice?

Think of it as a hyper-personalized QVC or HSN: live shopping on social media and online makes it possible for brands to create ultra-personalized shopping events, each centered on specific interests. These events bring together brands, products, celebrities, influencers, and enthusiasts from around the world – all crammed into an intimate video broadcast and rapid-fire chat.

Live shopping is fun; it’s engaging, and, most of all, for viewers, it’s addictive entertainment. For those who grew up long after QVC got famous on cable TV, live shopping is retail’s answer to Netflix and Twitch. Live shopping allows you to tune in to a maker, an influencer, a celebrity, or just a funny random person, and hang out.

Live shopping is the next evolution of what it means to truly connect with a consumer. Fans come back to it frequently – and not just when they want to research or buy. Live shopping works because it creates a stronger emotional bond with brands, products, and personalities.

Coming to an online store near you

In China, live shopping is already a standard form of retail. Typical live shopping events last around three hours, while special events can go on around the clock.

This is the future that awaits American retail. The live shopping format generated $60 billion in sales globally in 2019 – with China far in the lead. Yet only $1 billion of those transactions took place in the U.S. Now, the format is estimated to hit $25 billion in the U.S. alone by 2023.

Brands don’t have much longer to waste. So here are four reasons it’s smart to get in on what’s happening in the live shopping game now.

Four Reasons Why Live Shopping is the Next Big Trend

1. Live shopping makes ecommerce more human.

For brands that lead with community or lifestyle – in other words, mission-driven brands – there needs to be a story behind what they sell, which consumers can emotionally connect with. This is especially critical online. Physical stores are taking a backseat in retailers’ strategies, so it’s essential to make sure that the ecommerce experience that’s replacing brick and mortar has an honest and real human element to it. It can’t all just be formulaic checkout flows and image galleries.

The problem with ecommerce is that most brands have set up their online stores as mere purchase destinations. The idea has been that the actual shopping (in other words, the awareness and consideration stages of the buyers’ journey) are conducted elsewhere: in brick and mortar, on social media, or a third-party review site, for example. That’s why most ecommerce sites have been stripped only to the mere necessities. The goal has been to eliminate any possible distraction between the user first arriving at the site and then closing their purchase.

Now, the pandemic ecommerce has taken on a more end-to-end relationship with shoppers; retailers also need to change the way they do business online. For example, online stores must now integrate and expose a brand’s culture, values, and interests alongside the product information. In other words, ecommerce sites need to tell immersive stories, just like the best brand experiences do.

This is where live shopping comes in. In live shopping, hosts (generally influencers) tell their origin stories, demonstrate their products, answer questions, interact with the audience, and accept orders. When you watch a hosted demo of a product from their own house or backyard, and they walk you through their life — giving you a sense of their personality while they’re selling – there’s a new type of connection that’s forged.

The trust and bond being built are not only between the consumer and the host; it’s also formed between the consumer and the brand that’s being marketed.

Live shopping creates a more authentic image for the brands that embrace it, more than any glossy advertising campaign ever can. After all, the events are live. Occasional blunders are all part of the process. The informality of the format ultimately allows consumers to see brands as more real and approachable.

2. Live shopping taps into the influencer economy.

Based on hosts, live shopping events are an organic way for brands to tap into the influencer megatrend. It is well known by now that consumers often research a product before buying it, seeking information and assurance from some third party beyond the brand itself. Thus, word of mouth matters, and so make influencer recommendations.

Live shopping is a transparent and effective way for brands to combine a more objective, outside view with their own voice. The format allows consumers to do shopping research with an expert, in real-time, while shopping.

There’s nothing more infectious than seeing a person who loves the same types of things as you gush about a product that you can buy right then and there. It’s an instant connection – from one enthusiast to the other. And consumers love it.

Brands can most effortlessly plan live shopping events by tapping into outside influencers on major social media channels. Many platforms now offer live shopping capabilities. From Facebook Pages to Instagram Live, the technology and audiences are already there.

Over time, however, brands can – and should – start taking ownership of the space: hosting live shopping events on their own platforms, off social media, and building up their own roster of brand personalities. That is the best way to ensure real longevity for any brand.

3. Live shopping is addictive.

Remember when shopping was fun? People would spend an entire weekend at the mall, just looking around and shooting the breeze. Unfortunately, online shopping, in its current form, is rarely that enjoyable an experience.

As Marcus Johnson, host of eMarketer’s Behind the Numbers podcast, recently said on his show, “I’ve never walked into a store and thought, ‘Alright, where are the black items under $50 in a medium?’”

The selection in online stores often feels overwhelming. Besides, there’s not much in ecommerce beyond static pictures to engage the five senses. And while receiving the actual item is always fun, the road to getting there can be cumbersome and flat-out exhausting.

What’s changed is that retailers are no longer competing only with the store next door. Instead, they’re competing with everything and everyone on the internet – with movies, music, and gaming. That’s why retail brands are now essentially media brands. What matters first is, can you capture users’ attention? And then: can you hold it? And, as Netflix noted when they called out sleep as one of their major competitors: can your audience stay awake long enough to consume all this great stuff? Or do they just run out of available time?

With live shopping, consumers get to dive deeper than mere promotion. Free-form video conversations weave from education, to mission, to selling and back. Product and brand content become one.

Consumers get to learn the story of how a product came to be. They get to see it all in real-life situations; and experience all the emotions that come with watching a live show: surprise, excitement, anticipation. This focus by hosts on building and maintaining a real narrative means that consumers want to stick around to see what happens next.

Ultimately, a brand’s success online is rooted in the lifetime value of its customers. Unfortunately, acquiring customers is expensive, so increasing order size and driving repeat purchases is critical. In addition, creating a loyal fan base is essential for survival.

Through live shopping, brands can become entertainment destinations with built-in audiences. An excellent live shopping show can rival an episode of Ted Lasso. The best live shopping channels have the potential to be just as, if not more, addictive than Hulu.

4. Live shopping creates FOMO and closes the sale.

The fact is, most brands don’t compete only on products. So even the most original innovations eventually get copied and adopted by competitors. From a differentiation aspect, then, live shopping events are indispensable. They’re an opportunity to build something completely different, and with that, drive up value.

Consider limited-edition releases, for example. Scarcity is something that the live shopping format does exceptionally well. Offering a limited run of, say, 100 sneakers and a limited time to buy them creates a real fear of missing out.

Shoppers know that others are watching. And that immediacy escalates the decision to purchase, regardless of price.

Presenting live shopping as a series of events is a further way to create the sense in consumers that this really is an event, a once-in-a-lifetime opportunity to buy. Dedicated events also block out time from consumers’ calendars, communicating that the happening demands their undivided attention.

The absence of other retailers (or distractions) in the full-screen live shopping event mode further means that consumers aren’t actively looking for or seeing better deals. Instead, the shoppers are all ears for the message that’s being broadcast then and there. Indeed, securing a timeslot in your customers’ busy calendars takes that time away from streamers like Paramount Plus, games like Fortnite, and countless other things that nowadays take up consumers’ headspace.

Live shopping events ultimately allow brands to explore new topics, product ideas, and niches in a more agile and less risky way. In addition, the format means they get to work with captivated audiences: live shopping provides real-time customer feedback on what works and what doesn’t.

And the globality of the internet means that, with live shopping, even a niche product can find enough international demand to morph into a bestselling item.

From a consumer point of view, live shopping is ultimately much more than mere shopping. It’s entertainment that can engross, delight, and inform. And there’s the obvious convenience: consumers can tune in and out at their leisure, tap into the influencer and storylines that matter to them, and then, with a few clicks, have the product shipped to their door in a matter of days. It’s hard to beat that.

Image Credit: Kampus Production; Pexels; Thank you!

Michael Levitz

Chief Business Officer, Reaktor

Michael Levitz is the Chief Business Officer of Reaktor, a global tech agency with offices in New York City, Amsterdam, Helsinki, Lisbon, Stockholm, and Tokyo. Reaktor creates digital products and services for global brands including adidas, HBO, and ViacomCBS, facing off with the most complex design and technology challenges.
For 15 years, Michael has partnered with premium brands to create innovative digital products and services that drive customer engagement and business value.


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