Ammar Mohamed worked at Shopify in the olden days—not in the 2006, first-30-employees olden days, but 2018, pre-pandemic olden days, back when we all worked in offices and obsessively followed Harry and Meghan’s wedding (which feels just as long ago.)
As an enterprise account executive at Shopify’s headquarters in Ottawa, he observed companies getting creative to reach their audiences, including early iterations of live shopping.
“There was this one lady who was killing it: her store was doing a million dollars a year, and it [wasn’t] a nice website at all,” Mohamed told Retail Brew. “I reached out to her, and what I found out she was doing is she was hacking this whole thing together."
The resourceful Shopify seller was combining Google Sheets and Instagram Live, asking viewers on her livestream to enter their order requests into a spreadsheet in real time, and then invoicing manually through Shopify, Mohamed said.
Fast forward to August 2022, and Mohamed works at Store Leads, a platform that crawls the web for e-commerce data for salespeople and analysts to generate leads. Today, Store Leads is tracking over 60 apps with the tag “live stream.” Some, like StageMe, were created in the last month, in the wake of Facebook’s decision to withdraw from live shopping, while others date back to the olden days of 2018.
“It’s a new trend, and I didn’t really experience it before,” Mohamed said.
At first glance, the future of live shopping may look bleak. Just this summer, in addition to Meta's announcement that live shopping on Facebook would end in October, TikTok backed off from plans to expand livestream shopping capabilities to the US. Amazon, which launched live shopping in 2019, has found limited success as influencers have struggled to bring their social media followings to the platform. And if the titans of tech can’t do it, who can?
Big Tech’s big retreat might not be that big
China, for one. According to estimates from Insider Intelligence, live streaming generated $300 billion by June 2021.
But Vincent Yang, who co-founded live shopping platform Firework, is convinced live shopping will have its moment in the spotlight in the United States, too.
“Livestream e-commerce is a huge business in Asia, and purchases are almost universally conducted within the walled gardens of social sites like ByteDance-owned Douyin or Taobao,” Yang told Retail Brew via email. “But there’s a good reason for that: There are no other places to make purchases online in China.”
Live shopping works well inside of an app in China, because “the open web doesn’t exist,” Yang added.
Yang pointed to data showing that ~5% of e-commerce sales in the United States happen on social media platforms.
“The reason Facebook shut down its live streams is not because livestream is wrong,” he said. “Livestreaming is the right format…but it’s the wrong place.”
Live shopping winners: small businesses and Gen Z
Yang isn’t alone in his faith in live shopping—investors are on board too, and don’t seem to be deterred by Facebook’s change of heart.
Live shopping “will be a part of the ‘omni-channel’ experience in retail,” XRC Labs partner Diana Melencio told Retail Brew via email.
Today’s tech-enablement innovations enable companies to “create their own retail channel to interact and enable commerce directly,” she said. “We believe that the percentage share of purchases will increase with retail adoption and consumer education.”
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“The larger platforms pulling back, in my mind, creates more of an opportunity than anything else,” said Brian O’Malley, a managing partner at Forerunner Ventures, which has several investments in the live shopping space.
Zarina Lam Stanford, CMO of retail software company Bazaarvoice, explained that while China in particular “killed it” at live shopping, brands in the US are learning how to make it right for their consumers, who want the experience that live shopping offers.
“Gen Z and Gen Alpha—or the ‘social natives’ as we call them—are really shaping everything,” she explained to Retail Brew. “They want experiential. They want real time. 80% of them prefer to watch videos rather than reading…about a product."
Recipe for success: location, entertainment, authenticity
Bryan Moore, CEO and founder of TalkShopLive, thinks he knows the recipe for cranking up the return on investment for live shopping.
“To be successful in North America, you have to cut the friction in path to purchase,” he told Retail Brew.
TalkShopLive, which told Retail Brew it saw a 300% revenue increase in the last quarter alone, has also harnessed the power of celebrity entertainers. Drew Barrymore chatting about her cookbook and kitchen tools? TalkShopLive’s got it. Ciara selling Samsung tvs? It’s got that too.
The secret ingredient to TalkShopLive’s success is connecting disparate elements of the retail landscape and serving as a distributor, Moore said.
- Moore pointed to a recent livestream hosted by Maybelline New York and Seventeen magazine. In the nearly hour-long stream, which drew over 20,000 viewers, Maybelline’s ambassador, a celebrity makeup artist, demonstrates prom looks on her TikTok-famous co-host, using items available for in-stream purchases fulfilled by Walmart.
Firework, whose financial backers include SoftBank and Amex, says its partners have generated up to 20% ROI after implementing livestreams, with customers spending 282% more time on a website. Yang attributes that success in part to the ability of live video to create emotional connections.
“When a customer is emotionally connected, they actually stay longer…they shop a lot more,” he said.
The price is right and the benefits are good, so why aren’t more brands taking to livestream?
The “content first” approach to live shopping may be a smart financial bet for certain companies, because the cost of producing content has decreased, said Forerunner’s O’Malley.
“At the end of the day, if you’re trying to build equity value in this category, which is what we care about most—we need something that’s sticky, something that has a customer-acquisition strategy that scales,” he said. And while live shopping is one path to do that, it’s not for everyone, O’Malley warned.
That’s one reason investors may not be pushing brands to get into live shopping just yet, O’Malley explained. “Because if you’re gonna do it, you’ve really got to embrace it and do it right,” he said. “[It] can be a very powerful strategy for driving awareness. But if you’re not committed, it might not be the right strategy.”—MA
Editor's note 08/15/2022: A quote in this story has been updated since first published to reflect that Moore noted "path to" purchase, not "terms of."