Four Ways on How Live Shopping is Changing the Retail Playbook

Post by
Tiffany Li
Four Ways on How Live Shopping is Changing the Retail Playbook

Of the many disruptive technologies to hit the retail sector in recent years, live shopping has been one of the most highly touted. Live shopping is exactly what it sounds like: real-time e-commerce that allows consumers to shop while engaging with their favourite brands through live video and chat.

Modelling after the business success of live shopping in countries like China and Korea, retailers across Canada and the U.S. are flocking to learn and try live shopping themselves. 

How is this first-of-kind shopping experience changing consumer expectations and the agendas of retail marketing executives?

Here are FOUR takeaways on how we see live shopping rewriting the rules of the retail playbook:

1. Live shopping engagement drives business performance through increased sales conversion and decreased shopping cart abandonment

Increase Conversion Rates

If you're a digital marketer in retail or you’re an e-commerce merchant yourself, you may be more familiar with conversion rates hovering between 1-2%

Unlike traditional e-commerce and digital marketing, live shopping hosts are able to engage, storytell, and showcase their products through live video. Authentic engagements provide website visitors with greater confidence for the brand or a specific product. This confidence translates into increased add-to-carts and ultimately, checkouts.

To illustrate the effectiveness of driving sales conversion with live shopping, first consider these statistics from live shopping veterans in Asia: 

Reduce Shopping Cart Abandonment

This works hand-in-hand with boosting overall conversion. Oberlo, a leading e-commerce dropshipping platform, reports the average e-commerce shopping cart rate between 2012-2019 was around 70% across all industries. Of the many reasons, consumer preference for in-store purchases made up 15% of that.

Even when other leading reasons such as a poor checkout flow and costly shipping fees weren’t issues, these cart abandonment rates still persisted throughout the pandemic. Throughout the physical distancing restrictions, many shoppers reached to “pandemic window shopping” as a way to pass time.

While abandoning a cart filled with hundreds of dollars worth of merchandise may harm retailer's short-term conversions, retailer experts are saying this might not be a terrible thing after all. In fact, the influx of website visitors and page visits means shoppers are intentionally looking and considering products. This still provides valuable data for retarget marketing to recapture these sales.

This is where live shopping comes in! For the mindless scrollers already in your online store, integrated live shopping apps and live brand reps can push them further down the funnel. If you’ve gone live, you can still intercept this digital window shopper by tagging products you’ve featured in past live shows and then redirect them to your recorded shows. For the products that experience higher than average cart abandonment rates, nudging your shoppers from other digital channels to your live show may be an effective way to retarget and convert them.

Chart about shopping cart abandonment rates between 2012-2019
Chart about key reasons why people abandon shopping carts

2. Live shopping increases new category sales and challenges the conventions of what could be sold online.

Fashion is just one industry of many that is exploring live shopping. The rest of the economy is also going live. Live shopping makes it possible for traditional product categories to experiment with digital channels in the live era.

Connie Chan, a partner from Andreessen Horowitz, shared that shopatainment, or live shopping entertainment, is especially effective for exclusive and rare products such as collectibles, hype streetwear, artisanal products, and even food and beverage. It’s exactly how Connie Chan described it:

“In shopatainment, you’re not just purchasing a product. You can also get the history of the item, the process behind making it, a personal connection to the seller, and the benefit of a true-to-life demonstration and visuals''.

When the audience feels a strong connection with the business, they are more likely to convert and support the business in the long run.

For example, customers can buy wine without even getting off their couch. This means you can tour your favourite winery by watching a live stream straight from the tour as it is happening. The live shopping event walks through the process of wine production from soil to table. You will meet and learn about wine science from the people who practice viticulture from the vineyard. Eventually, you'll get the review of what the wine tastes like from the perspective of a sommelier. We’ve seen creative use cases of live shopping that really challenged the conventions of online shopping.

Here are a few notable examples:

  • Whatnot is a mobile-first live shopping marketplace for authenticated collectibles like sports cards, Pokemon cards, Funko Pop figurines, digital assets, and more. Recently, there was even a live shopping auction for NBA TopShot NFTs!
  • In response to increased social isolation under the lockdown,, one of the leading e-commerce marketplaces in China teamed up with Taihe Music Group (TMG) and a lineup of international alcohol brands to imitate an online nightclub experience. In one of these live shows, a partnering alcoholic beverage brand saw a 70% increase in whisky sales, and an 8X increase in sales within the same time frame in the previous day.
  • When major supply chains halted during the onset of COVID-19, Taobao Live launched a rural live-streaming initiative to help farmers bring anything from flowers to fresh produce across dozens of provinces and cities in China.
Xu Fei and Wei Wei, KOLs of Taobao and JD Live livestream fresh produce from farmers in rural China to support interrupted sales during the onset of COVID-19.
From farm-fresh produce to alcoholic beverages, business owners across China have adopted live shopping as a dominant channel to sell and showcase their products. (Retrieved from MIT Technology Review - Karen Hao, 2020)
DJ and partnering alcoholic brands like Budweiser and Remy Cointreau go live on (Jingdong) in preparation for a live concert during the COVID pandemic. partners with Budweiser and Remy Cointreau to create a COVID-friendly live concert and to push online sales of alcoholic beverages. (Retrieved from The Drum - Charlotte McEleny, 2020)

3. Live shopping is reinventing the brick-and-mortar footprint.

Retailers with an existing brick-and-mortar footprint do not have to worry about live shopping being a threat. Rather, traditional store owners are reinventing their space to compete with the online retailers with a more experiential spin.

In a post-COVID world, we expect preferences for online shopping to persist. This doesn’t stop retailers from transforming their retail space into concept stores or distribution hubs. To illustrate the benefits of this hybrid model, consider the home improvement projects many of us worked on during the lockdown. Many retailers found success by adopting new COVID-friendly delivery models for those who prefer in-store shopping. For instance, the surge in adoption for buy-online-pickup-in-store (BOPIS), click-and-collect, or curbside pick-up for retailers are a saving grace for many home improvement and large appliance stores like Home Depot and Best Buy. In fact, S&P Global Market Intelligence reports the large footprint of these retailers are some of the key advantages they have over the e-commerce giant, Amazon.

In March 2020, Best Buy responded with COVID-friendly in-store visits quickly by providing customers with the option for contactless curbside pickup. (Retrieved from Best Buy - Chris Havens, 2020)

4. Live shopping is redefining the role of sales associates as an online ambassador.

Live shopping introduced a new breed of savvy sales associates who can sell anything, anywhere, and anytime. While sales associates were key to in-store experiences, the rise of live shopping assistants unlocked a whole new level of engagement.

Amplify your audience reach and service more customers - one-to-many

The secret behind these “power sellers'' as Connie Chan calls them is all about their ability to feed the hunger for relatability and personal connection. Traditionally, sales associates were only able to service a handful of customers at once. They likely balanced the rest of their time replenishing inventory and greeting customers. Live shopping assistants are the online ambassadors of your brand. Instead of being limited to servicing one to five customers, live shopping assistants can service tens, hundreds, thousands, and in some cases millions of customers in just one hour. On top of amassing a large audience with discounts or exclusive content, live shopping assistants can also help drive conversion with live and persuasive conversations. With so many viewers looking at the same product, people feel the urgency to convert in the moment.

Viya Huang, one of the world's most influential KOLs, prepares for a Singles' Day livestream event.
Leading KOL Viya Huang prepares for live shopping event in Hangzhou, China. (Retrieved from SixthTone, Chen Zhongqiu/VCG)

Flexibility to sell one-to-one

For some retailers, selling one-to-one is key to offering a hyper-personalized experience. For instance, brands that sell intimate wear, custom clothing, or offer services in resizing need privacy and face-to-face interactions. Live shopping also accounts for these one-on-one shopping appointments. Canadian-owned intimate wear brand Knix leverages encrypted live video conferencing for virtual fitting appointments with Knixperts. Last holiday season, Lululemon introduced a “shop over video”, an appointment-based virtual shopping experience. Lululemon educators give customers confidence by providing product and gift recommendations, and even answering sizing and fit questions in real-time.

Lululemon Virtual Shopping Experience
Lululemon customers can now shop over video by booking one-on-one appointments to chat with digital educators. (Retrieved from Lululemon Virtual Shopping, 2021)

At its core, live shopping is combining e-commerce and entertainment. We don’t think that the live shopping assistants will fully replace sales associates. However, we see an opportunity to evolve the traditional sales associate into storytellers who can also charm the audience digitally. Viya Huang is a sensational key opinion leader who has sold everything from cars, homes, food and more. Her success stems from using her winning personality and positive energy to connect with her audience. Andy Yap, a social psychologist from INSEAD business school in Singapore says her success is likely attributed to being personable and genuine without seeming like she is trying too hard to sell.

To summarize, here are the FOUR key takeaways on how live shopping is changing the retail playbook:

1. Live shopping engagement drives business performance through increased sales conversion and decreased shopping cart abandonment.
2. Live shopping increases new category sales and challenges the conventions of what could be sold online.
3. Live shopping is reinventing the brick-and-mortar footprint.
4. Live shopping is redefining the role of sales associates as an online ambassador.

All four themes revolve around live shopping’s unique ability to transform traditional online shopping experiences into a dynamic and engaging one. When livestream content is compelling, “there’s no friction between entertainment and buying, which is the whole point” of live shopping. In our opinion, live shopping gives retail marketing a whole new perspective. Not only is live shopping changing the way consumers shop but it’s also rewriting the rules for how retailers operate. It presents a new way to differentiate in a crowded and competitive retail market.

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