With Coronavirus (COVID-19) limiting in-person engagements, consumers turned to digital for commerce with some even tuning into livestreams to discover, research and purchase. Livestreaming combines elements of streaming, social media and influencer status into a real-time virtual experience. This nascent shopping medium made inroads during the pandemic due to its ability to create an emotional connection similar to in-person shopping and has potential to further disrupt an already-struggling retail industry in 2021.
Live shopping is a modern twist of the home shopping concept popularized by QVC QRTEA -4.1% and HSN, providing a multi-sensory, immersive commerce experience. With live shopping, consumers watch associates or influencers showcase and demonstrate a product virtually. Shoppers can ask questions via the chat function and even start the purchase process within the stream. Consumers like the enhanced engagement, the additional product information and, of course, the deep discounts. Brands that leverage this shopping medium like that they can maintain better control over their image, market positioning and narrative as they bring their products and services to market.
Live selling was gaining steam in China before the pandemic, but then began to spread to other geographies across the globe. The channel’s popularity will likely continue growing post-pandemic as this next-generation home shopping concept takes hold. In China, though, it has already cemented itself a must-have channel for reaching consumer as its popularity skyrocketed there during COVID-19 lockdowns in early 2020 due to limited in-person engagements.
Alibaba’s BABA +0.2% Taobao Live is the undisputed leader of commerce livestreams. In November, Alibaba hosted its 11.11 shopping festival, and livestreaming accounted for USD6 billion of sales, doubling the 2019 total for sales related to livestreaming. In fact, 90% of the biggest brands selling on Tmall hosted livestreams during the 11-day shopping festival. Over that period, about 300 million Taobao users watched livestreams on Alibaba’s flagship live selling channel. Of those operating livestreams, 33 channels achieved over USD15 million in sales and nearly 500 reached USD1.5 million in sales. For example, Nike NKE -0.8% generated USD15 million in just one minute.
US-based cleaning products company Bissell is one brand that used livestreaming on Alibaba’s Taobao Live to reach Chinese consumers, growing its presence in this market. Bissell began to experiment during the 11.11 event in 2019, but it was not until 6.18, China’s other popular shopping festival, that the company started to see noticeable uptake. Max Bissell, who now manages the company’s upright deep-cleaning business, but previously managed its Asia operations, said Bissell’s top-three influencers drove 50% of traffic to its Tmall website during the 6.18 festival. During the most recent 11.11 event, Bissell hosted around-the-clock livestreams. It also launched a new product, available exclusively on Alibaba’s Tmall.
Most notably, live selling enables brands to connect directly with consumers. “We are getting our products in front of consumers on a platform that is relevant to them,” Max Bissell said in an interview with Euromonitor International. This is important for its products, which rely more on live demonstrations than other categories. Due in part to these efforts, Bissell tripled its business in China in 2020 after expecting sales to only double.
Much like social commerce and the networks of personal influencers inspiring purchase decisions, this form of next-generation shopping will be important for reaching certain subsets of the population—namely young consumers and those living in emerging markets. Live selling can be viewed as an extension of existing social media or retail platforms, so offering livestreaming capabilities is a way to drive engagement, build brand loyalty and convert sales.
Social media leveled the playing field, giving consumers a voice in the transaction and enabling smaller brands to compete, and live selling has similar prospects. In much the same way, the potential low-cost nature of live selling can help small brands and retailers compete against larger rivals. It also enables a two-way dialogue between a consumer and a brand, leading to greater engagement. Retailers and brands will have to experiment with their voice in this emerging shopping channel and even potentially different live selling content formats to ensure they stand out from the crowd.
For consumer brands, retailers and even hospitality operators, live selling has emerged as a must-watch shopping channel as they seek to meet consumers on popular social or retail platforms where they are spending time. Despite the promise of vaccines and a return to more in-person shopping, live selling is likely to stay relevant in a post-pandemic era. The crisis likely accelerated its global rollout by one or two years. Even so, the live selling concept is still new in many of these markets with much room for growth in 2021 and beyond.
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