On August 25, 2021, Deborah Weinswig, CEO and Founder of Coresight Research, presented a livestreaming e-commerce playbook for US brands and retailers at retailX in Chicago. We present insights from the presentation, covering the retail opportunity in shoppable livestreaming, learnings for the US from China, and livestreaming best practices.

Shoppable Livestreaming: Insights from Coresight Research at retailX 2021

Livestreaming Presents an Opportunity To Drive Sales and Engage with Consumers Coresight Research has identified livestreaming e-commerce as one of the key trends to watch in retail. The channel has grown quickly in China: It is now a $300 billion industry, up from $19 billion just three years ago and representing around 14% of total e-commerce, we estimate. This indicates huge potential for the channel in the US. Coresight Research estimates that the US livestreaming e-commerce sector could reach $35 billion by 2024, up from $11 billion this year.

• Read Coresight Research’s Think Tank: Livestreaming E-Commerce for further detail on the size and growth potential of the China and US markets.

Livestreaming blends entertainment with e-commerce, as viewers purchase products online through real-time shoppable videos. According to Weinswig, livestreaming should be the “highest-margin channel” as it allows brands and retailers to make use of resources they already have, such as stores and associates, and has low barriers to entry—given that the monthly cost of a livestreaming platform is $600–$700. Livestreaming enables smaller brands and retailers to tell their story and engage directly with consumers, responding to questions and comments in real time. These interactions can give consumers a better understanding of a brand as well as of specific products—the fit, color and fabric of apparel, for example—which can drive down product returns by 40%, according to Weinswig. Due to sessions being held live, brands and retailers may be wary of the host making mistakes, but Weinswig highlighted that things going wrong on a livestream can make brands come across more personable to viewers and can even serve to drive traffic: She recalled how a Chinese influencer’s cereal-opening accident became a viral moment that boosted sales. The US Can Take Learnings from China Weinswig explained that there is much that the nascent US livestreaming industry can learn from China, particularly in terms of demand-led production, gamification and the use of livestreaming in shopping festivals With the Chinese grocery market demanding ever-fresher and higher-quality goods, consumers are connecting directly to farms for their produce, where products can be “picked, packed and shipped in a matter of hours,” with livestreaming replacing traditional intermediaries. This demand-led model offers “a completely new way to think about waste and the pre-positioning of inventory,” according to Weinswig. Livestreaming interactions can provide a detailed source of localized data around consumers’ product preferences. Regional livestreams would allow US brands and retailers to understand what products customers want and pre-position inventory ahead of big shopping events such as Black Friday, for example. Given that the tech-savvy younger generations are the primary base of livestream shopping, Weinswig recommends that brands and retailers employ gamification strategies and other interactive features on their websites, such as flash sales and lottery draws, to boost engagement and retain viewers’ attention. Although the US lags behind China in this regard, it is learning how to create more animated platforms. Weinswig said that this presents an opportunity for technology providers to provide new solutions and create further livestreaming innovations that will shape the future of the industry in the US. [caption id="attachment_132218" align="aligncenter" width="700"] Flash sales and lottery draws in the China market
Source: Bilibili[/caption]   According to Weinswig, one of the biggest differences between Chinese and US livestreaming is that American brands and retailers tend to “unleash all [their] inventory,” while products on Chinese livestreams are often available only in limited quantities or for a limited time, such as during shopping festivals. In terms of focusing viewers’ attention, Weinswig said that Chinese livestreams typically dedicate three to six minutes to each product presented in a livestream, rather than promoting lots of products together. In addition, products are often promoted with limited-time special prices, packaging or customization to increase consumers’ anticipation and create a sense of urgency. Weinswig explained that this adds to the Chinese concept of shopping as akin to a sport, with individuals fighting to get to the front of the line. Limited offers are a strategy that is employed by brands and retailers during shopping festivals in particular. In future, Coresight Research expects more shopping festivals to gain traction in the US, including popular events from China, such as Singles’ Day. Constructing a Livestreaming Strategy Weinswig offered recommendations for brands and retailers hoping to join the US livestreaming space, which we present below. Use existing store associates as livestream hosts Even though influencers and key opinion leaders (KOLs) are highly popular in China, Weinswig explained that store associates are product experts and are more likely to be passionate about the brand—making them knowledgeable, personable and enthusiastic livestream hosts. Using these hosts is also more cost-effective than working with influencers, according to Weinswig, and some retailers even pay associates in gift cards or days off. Hosting livestreams in-store can also be beneficial in creating dynamic and engaging sessions that promote a brand’s or retailer’s wider assortment: Hosts can pick up products that were not necessarily planned to feature in the session when responding to real-time questions from viewers. Build an audience Weinswig suggests that brands and retailers partner with livestreaming platforms—either broadcasting on social channels or niche beauty communities such as Supergreat or NTWRK—to extend their reach to relevant viewers. She emphasized the importance of consistency when communicating with consumers. Retailers can build their audiences slowly through planned livestreaming schedules, so that “consumers are coming to the same stream every day” to engage with the host and other consumers, as well as to “have fun and find new sales,” which helps build a sense of community and increase anticipation for the next livestream. Gather and act on data Brands and retailers should collect and analyze livestreaming performance data as well as viewer comments from each session. Monitoring consumer behavior and adapting livestream content to address specific feedback can help brands improve their dialogue with shoppers and convert viewers into loyal customers. Weinswig explained that retailers “do not have to have millions of followers” to do well; they can succeed with “2,000 well-curated folks” if they are using data effectively. Building a dedicated base of engaged consumers who regularly attend livestream sessions can be more valuable than having a large but uncommitted audience. Choose an appropriate medium to promote sessions and products Weinswig emphasized the potential for combining social media and livestreaming, such as using Pinterest to create a list of “pinned” products that consumers can browse pre-livestream and that can then be used by the host to navigate between products during the session. Weinswig recommended that brands and retailers also use email to announce exclusive offers that will be available on the livestream ahead of time, as this is the most reliable medium for reaching consumers.

More on Livestreaming

• Coresight Research’s Playbook: Livestreaming E-Commerce in the US presents five best practices for US brands and retailers to develop winning livestreaming e-commerce strategies.
• Our Livestreaming Latest series provides regular updates on the variety of approaches that are emerging around the world, across different retail sectors. We present recent market developments and discuss the trends we are seeing in the livestreaming space, with examples of notable livestreaming events.