What is live shopping?

In 2020, lockdowns made it hard or virtually impossible for people to attend stores in person, eliminating all elements that make shopping a preferred leisure activity for some. The world turned to ecommerce, but that didn’t fully fix things either, since it doesn’t normally allow you to dynamically see the product or talk to a salesperson. Technology, like it did in many other aspects of our lives, tried to remedy those shortcomings. The result? Live shopping: a new trend that aims to win over customers still on the fence about online shopping, while bringing a better experience for the rest of us.

The origins and status quo

The story of live shopping started back in 2016, when Alibaba launched Taobao Live for the Chinese market. Taobao Live’s basic premise was simple yet innovative enough, evoking the teleshopping concept that marked the 90s and early 2000s: it would connect an online livestream broadcast to a digital store, permitting participants to simultaneously watch products being presented and actually buy them. Of course, plenty of add-ons to provide “shoppertainment” (i.e. shopping + entertainment) popped up, such as reactions and chats and various opportunities for product reviews, demos, Q&As and influencer marketing – who doesn’t want a beauty guru showing the latest lipstick in burgundy red? 

Soon enough, Alibaba’s rivals Mogujie and JD.com followed suit and, before you knew it, the trend exploded. For instance, by 2018, Taobao Live reached $15 billion USD in sales, signalling a  400% YoY growth.

That growth was further accelerated by other stakeholders like TikTok and Pinduoduo and by the COVID-19 pandemic. In 2020, the number of Chinese live shoppers passed the astounding threshold of 600 million people and it reached a 20% share of the ecommerce market in China.  

Live shopping trends

The world – customers and retailers alike – have since then been taking notice of what happened in China. Indeed, almost 25% of adults (mostly Generation Z and Millenials) outside China would like to discover new products through a livestream event and huge brands like Tommy Hilfiger, Douglas and Walmart have already adopted the live shopping trend, not to mention giants like Amazon and Facebook. McKinsey predicts that sales could account for as much as 10-20% of all global ecommerce by 2026.

The success is partially a consequence of having the first truly dynamic catalog, which allows customers to have a better look at a product the same way they would if they had it in front of them and solve doubts regarding quality, sizing and looks. It also helps mimic the one-on-one relationship you can establish with sales representatives in a brick-and-mortar store, meaning that the brand appears more trustworthy to its customers. 

So, should your business jump on the bandwagon and adopt this trend? There are a few things to take into account prior to making that decision.

What to know about implementation

When companies decide to adopt live shopping, they tend to think of insurmountable obstacles that are actually small hurdles that any seller can overcome with a little bit of creativity. Here are three misconceptions. 

1. Initial investments don’t need to be significant

The production quality of influencers and social media celebrities has gone up exponentially in the past decade, matching that of professional production companies. This does not mean that companies need to further invest in production costs, but it does mean that they need to be smarter about what they invest in. 

Here’s an insider tip: better lighting increases the quality of a video much more than a better camera does, and this is the secret of most social media personalities. Besides, much of the potential audience isn’t expecting a cinema-quality video out of a stream, as they tend to focus more on relatability and a better overall experience.

Long story short, it is not about monetary investment itself, but on making the right improvement decisions. 

2. It’s not all about having a big audience

Another fear that most companies face before setting up a stream is having few or no users interested in it. Manu García, Head of Live Shopping for Latin America at VTEX, considers that social media campaigns are more than enough to attract clients to a company’s home page, which also benefits from the usual traffic of buyers interested in the brand. Besides, a bigger audience is not always the main objective.

“Target audiences and objectives for each session vary from one company to the other. We had one event where we sold whisky bottles priced above $1,000 USD. So the objective is not a massive audience, but having around 50 clients that are willing and able to buy bottles. In this case, 50 viewers is not a bad turnout.”

Manu García, Head of Live Shopping for Latin America at VTEX

Companies will have to educate some of their customers about the advantages of this trend, but they can easily attract interest with flash sales, exclusive discounts and other engagement tools deployed alongside the stream.

“In LATAM, the average session time is around three to four minutes. With live shopping, we’re seeing 17 minutes, which greatly increases the chance of closing a sale.”

Manu García, Head of Live Shopping for Latin America at VTEX

3. It’s easy to measure its success

One of the major advantages is the fact that it lets you measure several KPIs, such as open rate and comments before, during and after the streaming. In addition to these, you can also monitor active visits, number of products added to the cart and the most successful products, as well as the success of live sales. All of these metrics help you better assess the impact that this tool has on your sales, which can be difficult to do with other tools. 

“Some companies believe that Live Shopping is a good option only for cheap products, but we’ve sold mobile phones and foldable bikes with prices above $500 USD. This is a trend that can benefit more expensive products and even B2B sellers.”

Manu García, Head of Live Shopping for Latin America at VTEX

Whats the Verdict on Live Shopping?

Live shopping is primed to be a powerful tool in Latin America and Europe in the near future, which will attract new customer profiles and will create new specialized jobs. The technology and the potential audiences seem to be ready for this revolution, and we just need to find companies willing to be trendsetters in the ecommerce space, like Grupo Soma, Grupo Exito, Dengo and Oster, just to name a few. 

Will your company join them? It’s up to you, but we say go for it.

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