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Who Is Actually Livestream Shopping?

Live selling via streaming video is a smashing success in China but has yet to catch on with consumers in Europe and the US due to several pain points.
A livestream studio in Shanghai.
A livestream studio in Shanghai. Getty. (HECTOR RETAMAL)

Vishal Sapra, 37, said he got hooked on QVC as a kid, staying up past his bedtime and channel surfing until he stumbled upon the shopping network.

He never bought anything, but it was good, reliable entertainment: a charming host, compelling products and an endless stream of promotions.

Sapra, the head of marketing at a talent acquisition media company, said he doesn’t watch QVC anymore. But he has sampled several of the dozens of new live shopping enterprises that are attempting to replicate the network’s model online, down to the overly perky hosts.

These companies are all angling to be as big as QVC if — or their founders and investors would argue, when — the format takes off in the US like it has in China. This year, Chinese consumers are expected to spend $300 billion on products featured in livestreaming video, according to Coresight Research. Much of that spending takes place on Taobao Live, the livestream network run by Alibaba, China’s biggest online retailer.

Livestreaming has a long way to go before hitting those highs in the US. The market is expected to reach $11 billion this year, according to Coresight, with sales split among start-ups like NTWRK, Smartzer and Buywith. Also in the mix are social media platforms from Instagram to Snapchat, where brands and influencers host live events. Even QVC’s parent, Qurate, repurposes TV programming and creates original content for these Millennial and Gen-Z-approved channels. It also developed a “Netflix-like” app that allows users to stream the network without cable.

A lot of companies are still figuring out how it could work for them.

But so far, many American consumers aren’t buying what livestream shopping sites and apps are selling. Sapra said he downloaded NTWRK two years ago and has yet to make a purchase from the app, where livestreams feature limited edition sneakers and collectible art pieces. Some say they’re not interested in signing up for yet another shopping or social media platform. Others aren’t sold on tuning into a livestream to catch a deal, when discounts are available 24/7 elsewhere.

“Since the growth of [livestreaming] in China, there’s so much hype around it,” said Karoline Gross, founder of Smartzer, which helps luxury brands set up livestreaming events and create shoppable content. “A lot of companies are still figuring out how it could work for them.”

How It Works

Livestream start-ups know they’re making a hard sell, and each has its own spin on the concept.

Buywith allows influencers to host live shopping events that they first promote on their own social media; audience members can click a link in an Instagram profile to access the sale on their browser. The model borrows from China’s most successful livestreams, which are typically hosted by influencers.

Now the consumer consciousness and the industry consciousness woke up and suddenly want to be in this game.

CommentSold, meanwhile, encourages brands to host their own events on Facebook Live, said chief executive Brandon Kruse. Shoppers can make purchases by leaving comments.

Each livestreaming service points to its own signs of growing success: NTWRK expects its base of 2 million users to increase to 7 million by the end of the year. CommentSold saw about $1 billion worth of product sales on its platform last year, a figure Kruse hopes to double in 2021.

“Three years ago when we were raising money to do this, no one really understood what we’re trying to do,” said Aaron Levant, NTWRK’s chief executive. “Now the consumer consciousness and the industry consciousness woke up and suddenly want to be in this game.”

The Attention Problem

Jayleene Jackson, 26, is an avid online shopper, making a purchase at least three or four times a month from retailers like Neiman Marcus, Moncler, Zara and JLuxlabel, a fast fashion brand popular on Instagram. She’s dabbled in live shopping before, including off-price retailer SHOPUAL’s Instagram Live events.

But Jackson has never purchased anything through a livestream. She said the pain point is in the planning. She wouldn’t carve an hour out of her day to watch a livestream unless a major star was hosting. That’s not likely, at least in the short term: though Jackson is holding out for a Rihanna-hosted shopping event, it’s typically Instagram and TikTok influencers doing the selling.

“I feel like I just wouldn’t do it,” Jackson said. “A lot [of livestreams] seems like an auction and you’d have to hurry up to buy. It becomes competitive. I’d rather shop at my own pace.”

Instead, she said she’s much more likely to spontaneously click on an Instagram Live notification or a Snapchat link. Even on Instagram, the bar is high: Jackson said she’ll stop watching if a video doesn’t grab her within five seconds. And she was adamant that she’ll never download a separate app for livestream shopping.

I’d rather shop at my own pace.

Still, both Sapra and Jackson said they’re are open to future livestream experiences.

Lessons for Brands

Brands have had the most success when they introduce an exclusive element to their livestreams. That could be a promo code just for the people who tuned in, or the ability to shop a drop before anyone else.

“I would watch a livestream that’s showcasing products for the first time and giving people the opportunity to buy the products first,” said Amy Luck, 30, who operates her own online vintage store through Instagram.

She said she hasn’t participated in a live shopping event yet, but is open to the idea. She added that she would even be inclined to download another app for a brand that she really likes if it comes with exclusive offers.

Promotional content packaged as education is another way to entice customers and convert sales. Dr Nigma Talib, a naturopathic wellness expert and founder of her namesake skin care brand, hosted a recent Instagram Live event about anti-aging and hydration that resulted in multiple times more sales than past videos she created.

It was the combination of “demonstration, education and a promotion” that yielded such success, Talib said.

The livestreams have been a great way to acquire new customers, she said, because they’re able to learn about her products through the videos. While Talib plans to continue hosting Instagram Live events well after the pandemic subsides, she’s so far uninterested in exploring other platforms for livestreaming.

“I’ve been cold-called by third-party livestream [services] and I’m reluctant to make that move because I’m just so familiar with Instagram,” Talib said, “They do charge a pretty heavy fee as well.” Instagram Live, meanwhile, is free for businesses as well as normal users.

The Original Stream

When media company Dotdash sold a sales package to QVC last December, part of the agreement was a four-instalment programme on the TV channel hosted by its beauty publication, Byrdie. The programme would tap Byrdie editors to curate and showcase a selection of skin care, hair care and cosmetics products QVC already carries on live television.

The arrangement was a no-brainer for Byrdie, according to Leah Wyar, senior vice president and general manager at Dotdash.

“It’s huge brand awareness for us,” Wyar said. “Their audience is [218 million households] globally. [It’s an] opportunity to get in front of a new audience.”

Qurate Retail, Inc., QVC’s parent company that also owns HSN, generated $14.2 billion in revenue last year — comparable to some of America’s biggest department stores. And despite a reputation for catering mainly to older consumers, Qurate’s customer base is growing. In 2020, 30 percent of its consumers for the QxH vertical, which includes QVC in the US and business from HSN, were new.

There’s no intrinsic cap on the growth potential of all these other live stream mechanisms.

As cable subscriptions fall, driven by a younger demographic that prefers streaming, Qurate is expanding into Instagram, Facebook and even TikTok.

“It is possible that these channels will one day overtake [Qurate’s TV programme],” said Mike George, Qurate’s president and chief executive. “It might take a while ... but there’s no intrinsic cap on the growth potential of all these other livestream mechanisms.”

If anything, Qurate’s staying power is a testament to the lasting appeal of live selling. The formula works. But the question is what new format will be successful in capturing the attention — and the wallets — of the increasingly digital consumer.

“To me, no one’s quite figured it out yet,” Sapra said. “It’s about owning attention.”

Related Articles:

Luxury’s Livestreaming Gamble

Live Stream Apps Are Changing the Way People Shop

The New Normal: Digital Is Set For a Step Change

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