fbpx

Why livestream shopping is moving off socials and onto websites

Efforts around livestream shopping and shoppable ads from the likes of TikTok and Meta, among others, don’t appear to be taking off with brands or consumers. Instead, the shoppable video is being moved to marketers’ own websites.

TikTok’s livestream shopping program has reportedly been shelved after having trouble catching on in the U.K.; Facebook is pulling the plug on live shopping next month; and Instagram ended its affiliate marketing program for creators. However, brands still believe there is an appetite for shoppable video content, just not on social media.

The worry for brands is at any moment during a point of discovery on social media, a user can be distracted or frustrated by a mobile checkout experience and never actually make a purchase. But when a product piques a customer’s interest on socials, they can experience that love of social video along with a smoother brand website checkout.

Olaplex CEO Jue Wong has long been bullish on video commerce but was frustrated that most solutions pitched to her offered to host Olaplex videos on a separate platform or through social media, which she views as a so-called leaky funnel. So instead she opted to use Firework, a shoppable video platform that allows short videos to live on the Olaplex home page. The carousel of TikTok-like videos features user-generated content from Olaplex consumers as well as team members and showcases how to use various products. Each has a shoppable product link at the bottom of the video that allows customers to add it to their cart. The haircare brand has seen an 80% increase in website conversions and a 15% increase in average order value since launching these videos in March 2022.

Of course, getting consumers to move from social platforms, where they are watching videos for entertainment, to brand websites to consume content could be a challenge. But “it is not a case of ‘either or’,” Wong said. Instead, the goal is to appeal to shoppers who are more comfortable shopping directly on its website than through a social platform. “It is to give customers options to find it wherever, whenever and however they want to. We serve our customers and provide them alternatives to discover us,” she said. 

Livestream shopping segments are typically hosted by brand employees or influencers and are centred on promoting and selling products. The streams typically allow shoppers to ask questions and make purchases. 

“Shoppable video is probably better than live shopping on a retailer’s website,” Sucharita Kodali, VP and principal analyst at Forrester Research, wrote in an email. “Live shopping requires synchronisation, and most people are too busy or have other alternatives to tune into a live shopping broadcast. Perhaps during a coveted drop or during a shopping festival, live shopping may be lucrative, but for the most part, the U.S. consumer doesn’t engage in appointment-based shopping. They shop when they want and where they want, which is why on-demand is much better than live shopping for them.”

Statistics from China showcase that clearly, the West’s approach to livestream shopping needs to be altered. In China, livestream commerce generated more than $300 billion in sales in 2021, approximately 12% of overall retail e-commerce sales, and is expected to reach nearly 20% in 2023, according to Insider Intelligence. In the U.S, livestream commerce generated less than $6 billion, representing just 0.1% of overall online sales.

Why is this the case? Livestream shopping is growing more popular in China because swift technological innovations allow consumers to skip websites and jump straight to mobile shopping via “super apps” that include embedded payment forms. But the U.S. customer journey is more fragmented: A consumer might see a new fall jacket on Instagram, and then visit the brand websites to read reviews and see more photos of the item. After COVID began, more detailed product videos became key to making customers feel more comfortable buying online, bringing some level of a physical store to a laptop screen.

Brand and investor interest in shoppable platforms has been growing. In May, Firework secured $150 million in Series B financing, led by Softbank, and now employs approximately 400 people full-time. Firework CEO Vincent Yang said the platform has seen an increase in brand interest in the last 18 months, with about 30% to 40% of inbounds coming from brands who have seen Firework on another website. Yang added that the platform has also been bulking up its enterprise sales team. 

Firework was founded in 2017 as a social media app but began focusing on business-to-business in 2018. The company currently works with more than 1,000 clients, including lingerie brand Hanky Panky, Albertsons grocery stores and Beachwaver curling irons. In April 2022, Firework announced a partnership with Omnicom to give clients access to Firework technology. 

Firework isn’t the only company looking to do this. Earlier this year, David’s Bridal used Bambuser, a platform that hosts shoppable livestreams and lets brands make pre recorded content; Walmart started using Talkshop Live in 2021, which lets the retail behemoth host shoppable content through Talkshoplive’s embeddable video player directly on Walmart.com; and Nordstrom started hosting its own native livestreamed shopping events during the pandemic.

At the end of the day, shoppable videos give customers a unique experience outside of a physical store and can give customers more in-depth product information. It’s knowing how best to harness this for an audience that’ll boost the revenue potential. 

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts