Live streaming shopping in the West is like a taxiing plane that never takes off.
The concept of influencers and brands pitching their products to audiences watching on mobile phones is set to become a nearly $500 billion business in China this year, according to Coresight Research. Many fashion insiders have long thought it was only a matter of time before a similar phenomenon occurred in the United States and Europe. Despite the format’s storied history, QVC and HSN still have huge followings in the US, but online livestream sales in the US are expected to hit just $20 billion by 2022. , according to the core site.
Some of the channel’s biggest boosters are rethinking.On August 3rd, Facebook announced that it would be ending live shopping on October 1st. financial times reported that TikTok is pausing the US and European expansion of its QVC-like e-commerce initiative, TikTok Shop, after overwhelming tests in the UK. A TikTok spokesperson told his BoF that he has not paused or slowed the rollout of the TikTok Shop in Europe, but remains focused on the UK.
Gartner Director and Analyst Matt Moorut said: “It just doesn’t live up to the hype.”
The problem isn’t with the core idea, experts say, but with the fashion industry’s lofty expectations and unimaginative execution. Many brands and investors believed that what worked in China could be ported to the West with similar results. said to be growing rapidly. One of them is WhatNot, a live-selling community marketplace, where in July he raised $260 million, worth almost $4 billion. Endeavor recently announced plans for live shopping-enabled New York Fashion Week in partnership with interactive shopping platform AiBUY.
“What we really need is someone to get it right, and I think all these big guys will be back in action,” said Katie Thomas, leader of the Kearney Consumer Institute. .
In Asia, live streaming is a core channel for driving sales. Streaming video is seen more as a marketing tool in the West, where other forms of e-commerce were established before streaming video became popular. Western streaming e-commerce sites also struggle to integrate with the brands they sell. Consumers often have to click into the stream to make a purchase, and payment information is not stored across platforms.
Chinese consumers are also increasingly embracing new forms of online shopping, such as digital wallets that make it easy to shop on multiple platforms. Known as Key Opinion Leaders (KOLs), influencers lead conversations about products for users looking for deals on various channels. For Western consumers, commerce is more transactional, and relationships with influencers are less likely to be built around the shopping act.
“Expectations were very high that behavior would change on behalf of Western consumers,” Thomas said. “There are many reasons why it works in China.”
China’s retail market is also dominated by big players such as Alibaba, which operates the popular live-streaming platform Taobao Live. No Western retailer has invested so much in this format, and the brand would rather spend the occasional marketing push for his push than expend the sustained effort necessary to get customers accustomed to shopping this way. tend to dabble in live streaming.
“We have a very successful livestream that we did for businesses. We should have it next week at the latest.”
Moorut said today’s perilous economic climate is also preventing brands from embracing technologies of unproven value as revenue drivers. The projected sales of live stream shopping in the West pale in comparison to the advertising sales Facebook can generate.
“Even those who have been testing and learning will try to focus their resources on channels they know will ultimately generate revenue because that is what keeps the light on,” Moorut said. increase.
Live stream shopping may still be popular in the West. Young consumers love video and are increasing their purchasing power, said Adam Pressman, his director of managing retail operations at consulting firm AlixPartners. Discover, buy, and share products on TikTok, and get tips from creators on YouTube.
Platforms still invest in media. Even after Facebook shuts down live shopping, brands can still host events on his Meta-owned Instagram. TikTok hires e-commerce talent, releases advertising tools, and pushes the app to go live. YouTube and Amazon continue to roll out live shopping features and invest in this space. Livestream start-up Bambuser, which just signed a three-year renewal of his partnership with LVMH, says it has seen an increase in both the number of livestreams and viewership. increase. Total commodity value from 2020 to 2021 he will rise by 35%.
Live stream shopping may look different in the West. For one thing, it might mean focusing on small group sessions, where live streamers speak to a few select customers rather than a large audience. It could also be more fragmented rather than dominated by a few platforms like Facebook and TikTok, or tied exclusively to big events like Singles Day.
“Retailers know this is a way to supercharge or enhance their ecommerce game. I see it as a way for retailers to mature,” said Sophie Abrahamsson, President, Americas, Bambuser. says Mr.
And while KOLs with organic audiences are driving sales in China, influencers don’t always make the best livestreamers in the West, says Wenisberg. Salespeople, she said, are likely to be a better fit because they are often more knowledgeable about the product. She also believes livestreaming is particularly useful for beauty brands where livestreamers can provide tutorials and tricks, and influencers already have a strong tradition of building communities over video. (See the condition of pre-owned luxury items such as handbags).
Early experiments with live stream shopping show promise. According to McKinsey, in 2020, Walmart’s livestreamed fashion events using TikTok saw a 25% increase in follower numbers, and German beauty retailer Douglas saw a 40% increase in conversion rates associated with its livestreaming experiment. did. Following Alibaba’s playbook, Amazon used influencer livestreaming to lure consumers into Prime Day deals. Hill House Home uses live streaming to deliver its viral ‘nap dress’ before launch. There, founder and CEO Nell Diamond answers product questions consumers submit via a chat box.
“There’s a market for it. We haven’t come up with a Western version of it yet,” Thomas said.