Live Commerce: How Streaming Is Transforming Shopping

10 min readJul 18, 2019

Updated February 16, 2022

Woman giving makeup demo over a live stream as a way to market and sell products.

Live commerce, a new term used to describe the combination of streaming video and e-commerce, promises to revolutionize the retail industry and consumer shopping habits. Here’s a rundown of how live commerce is taking shape, trends in the retail space, and our predictions for what’s next.

The Evolving Retail Industry

Brick-and-mortar stores have been shutting their doors at an unprecedented rate. Thanks to the COVID-19 pandemic and shifting buyer habits, more than 15,500 retail locations closed down for good in 2020 — with another 80,000 projected to close by 2026.

Business as usual is no longer an option. Retailers must reach customers online and ensure a seamless experience. It’s also critical to identify new opportunities for engagement that don’t rely on a storefront.

But what about those aspects of the in-store experience that go missing when shopping in the digital world? It’s no secret that buying online yields convenience. Even so, will a visit to Amazon.com ever be as fun as a trip to Rodeo Drive?

The ability to see, touch, smell, and taste a product — for example — has always played a major role when evaluating items for purchase. Costco doles out free samples to capitalize on these sensory experiences, and car lots let buyers test-drive prospective vehicles before signing on the dotted line.

Cue in live commerce. By fusing online retail with live streaming, today’s companies are bringing consumers one step closer to the in-person experience. Multi-media video brings the digital store to life, and real-time interactivity keeps customers actively engaged.

Live Stream Shopping: Trending Technology or Future Standard?

Just as online shopping transformed retail twenty years ago, live commerce promises to revolutionize how goods are purchased and sold today. This convergence of video and retail helps improve engagement, close the gap between customers and products, drive sales, and — in cases where bidding is involved — increase the average sales price.

While the idea of watching a live broadcast before purchasing a pair of shoes might sound far-fetched, I thought the same thing about video calls back in the 1990s. And guess what? Today I use Zoom and Facetime on an almost daily basis.

Other once-trendy tools have already become table stakes. Chatbots and mobile apps make online customer support seamless. Machine learning technologies provide the personalized recommendations that we’ve all come to expect. And overnight delivery is commonplace.

Live Commerce in China

To understand live commerce, the first place to look is China — where it’s projected to grow into $770.70 billion market by 2023. Shoppable video was alive and well in China before the pandemic, but COVID-19 brought with it a live commerce boom that shows no signs of stopping.

Taobao — the world’s biggest e-commerce website — empowers farmers, business owners, and self-employed entrepreneurs with consumer-to-consumer live streaming. The Alibaba-owned platform is the eighth most visited site in the world. As a close rival, JD.com also makes it easy for anyone watching a live stream to add items to their cart with just a click.

Successful influencers on the platforms ascend to celebrity-like status, helping elevate the shopping experience from mundane to swanky. And just like at a Nordstrom beauty counter, consumers can ask questions and learn application techniques.

“They sell things that suit you,” explains one live stream follower of the famed ‘Lipstick King’ Li Jiaqi. “For a facial lotion, Li Jiaqi won’t vaguely say it’s moisturizing or anti-aging like most advertising, he will recommend it to people at the right age with the right skin type.”

Beyond just generating fans, the top sellers bring home serious bucks. Li sold $19 billion worth of goods on Single’s Day in 2021 — attracting almost 250 million viewers during the event. To put that into perspective, the most-viewed U.S. television broadcast last year was the Super Bowl, bringing in a measly 91 million viewers.

Changing Dynamics Across Every Industry

Jewelry, fashion, accessories, and skincare all dominate Taobao and JD Live. But since the pandemic hit, traditionally offline industries such as home appliances and cars have also found traction within the apps. Even rural farmers are embracing live streaming to promote goods ranging from rice to fresh fish.

“Growers who had once sold 90% of their products offline have now flipped to selling 90% online,” writes MIT Technology Review’s Karen Hao. “Live streaming has not only helped the industry weather the crisis — it’s forged an entirely new way of business that is likely to continue long after the pandemic is over.

Both Taobao and JD.com continue to enrich the live experience by adding augmented reality, 3D animations, and enhanced personalization. Other streaming services in China such as Vipshop and short video app Douyin (the Chinese version of TikTok) also have a stake in the live commerce game.

Live Commerce in the U.S.

Western entrepreneurs have been slow to capitalize on the fusion of tech and retail that we now call live commerce. TV shopping programs like the Home Shopping Network, QVC, and Jewelry Television (JTV) were among the first to bring live video-based shopping online — but early applications didn’t take full advantage of interactivity video technologies.

Although certainly late to the party, Amazon launched Amazon Live in 2019. Think Home Shopping Network goes digital, with the addition of icons fluttering on the screen each time a purchase is made. Models try on different outfits while hosts describe the material and fit, guest presenters demonstrate how to use various tools, and the top five toys are showcased for viewers.

A handful of startups also tried to get in on the trend, but American consumers were slow to embrace video-based shopping in its early forms.

And Then, COVID-19 Hit

Just as the pandemic accelerated digital transformation across industries, it forced consumers to evolve their habits and embrace remote models. As a result, live commerce finally took off.

Instagram introduced Live Shopping in the second half of 2020, and Facebook began experimenting with Facebook Shops. Walmart, Google’s Shoploop, and Shopify all joined the party, giving users the chance to buy items featured on live streams via a seamless UX. Plenty of VC-backed companies like NTWRK, Popshop Live, ShopShops, and Moda Operandi also launched during the pandemic.

“COVID-19 really forced retailers out of their comfort zone and to think out of the box. With stores shut, retailers had to find new ways to connect, not just with existing e-commerce consumers, which they already had, but to convert and meaningfully engage those consumers who were used to shopping in-store.”
Saisangeeth Daswani, fashion advisor at Stylus

Walmart began teaming up with TikTok to host live stream shopping experiences for seasonal events. Influencers on the platform use their clout to demo items for purchase, and TikTok delivers a seamless experience for quick in-app purchases.

“With the shoppable livestream experience, it’s exciting to see how the TikTok community loves engaging with their favorite creators and discovering new products. We look forward to continue building innovative ways to power the path from discovery to purchase, and seeing brands like Walmart bring their creativity to users,” explains Blake Chandlee, president of TikTok Global Business Solutions, in a statement about the partnership.

Types of Live Commerce

Here’s a look at some of the most common formats for live shoppable media today.

Online Marketplaces

Online marketplaces ranging from Alibaba to eBay have been around for some time, empowering users to buy and sell products without ever leaving their homes. Video technology is helping to revive this model and deliver the closest possible experience to ‘being there’ for those tuning in from their living room. Plus, real-time interactivity replicates the urgency of a real marketplace, prompting immediate action and enhanced community participation.

Live Auctions

Live video streaming is also bringing 18th-century auction houses like Sotheby’s and Christie’s into the 2020s. By enriching their digital presence, these organizations are connecting bidders worldwide with the excitement of the saleroom. Live streaming opens up the bidding pool to those unable to physically attend, reaching participants with varying interests and ensuring that each item sells at its proper valuation.

Online auctions are big business, and real-time video delivery is critical. One shopping platform focused on this format is Whatnot, which taps into an underserviced market by capitalizing on the nostalgia for paper goods like comic books and sports cards. The company has raised $225 million in funding to date, putting its valuation at $1.5 billion (and thus giving it unicorn status).

Influencer Streaming

With an already captive audience, online influencers can use their personal brand and the power of live streaming to promote their favorite products in an interactive format. Also called key opinion leaders (KOL), influencers are key to Taobao Live’s success. In the U.S., celebrities like Kim Kardashian also have piggy-backed on this phenomenon.

The influencer format converts younger demographics at the highest rate. While only 26% of the general populations’ purchase decisions are based on social influencers’ recommendations, the same is true for 44% of Gen Z’s.

Tutorials

Tutorials are the bread and butter of the cosmetic industry, where Ulta Beauty is driving live commerce innovation. With Beauty School Live, Ulta broadcasts virtual masterclasses on makeup trends and application techniques. Additionally, the brand hosts live streams on Supergreat, a beauty app that connects its Gen Z userbase with influencers sharing skin routines, application techniques, and product reviews.

Live Events

There’s plenty of overlap between live events and the categories described above. Still, newsworthy events such as product launches, limited edition drops, and retail holidays like Singles Day or Black Friday lend incredibly well to shoppable live broadcasts.

Kohl’s was an early adapter of live commerce by streaming the LC Lauren Conrad Runway show during the 2015 New York Fashion Week. Delivered via Periscope, viewers had the option to purchase any garments seen on the catwalk via a dedicated portal. Today, shoppable mobile streaming allows fans to purchase items in real time from the catwalks of Louis Vuitton and Victoria’s Secret.

What’s Next for Live Commerce

Brick-and-mortar retail was clinging to an outdated model before the pandemic. But this doesn’t mean that retailers should abandon every aspect of the in-person experience.

That said, successful deployment of shoppable video requires more than just streaming. Simple in-app purchasing (in a couple of clicks or less) is essential for platforms looking to blur the gap between ‘scrolling’ and ‘shopping.’ Leveraging data automation for personalization is also a must, as is experimenting with technologies like extended reality (XR) and machine learning (ML) to transform the end-user experience.

Gamification and Interactivity

When live commerce is done correctly, gamification and real-time interactivity help drive consumer interest. Immersive 3D experiences using virtual reality (VR) also better engage remote users — allowing buyers to study the clothing from every angle and experience the excitement of being in the crowd of a runway show.

Augmented reality (AR) also promises to push live commerce forward. Picture this: After purchasing a new home, you enlist the expert help of an interior designer working at your favorite home furniture store. Within an app, you’re able to show the designer the space you’re working with. Then, using augmented reality, you can try the representative’s suggested furniture on for size. Simply point your camera at the empty space, and let the app overlay an image of the couch, table, or rug you selected.

Blockchain, NFTs, and Crypto

Cryptocurrency and non-fungible tokens (NFTs) will likely play a role in future e-commerce monetization models. And the retail sector is already making moves to embrace this technology. Nike, for instance, recently acquired the NFT and virtual shoe company RTFKT to prepare for the trending metaverse.

“In such blockchain-based environments, users can buy virtual land and other digital assets such as clothing for avatars in the form of a crypto asset called a non-fungible token (NFT),” explains Reuters.

The mobile app NTWRK also built blockchain into its strategy, enabling users to buy and sell NFTs, rare art, and collectibles. The platform has been making headlines for its gains in funding — with a recent $50 million infusion led by Goldman Sachs Asset Management — indicating that plenty are banking on blockchain-based business models.

Moving Live Commerce Forward

While the technologies discussed above pave the way to endless possibilities, innovation in live commerce doesn’t require getting too fancy.

A new gardener might choose to visit a garden center rather than shop online out of the need to speak with someone. So why not create a solution where users can live-stream while a garden expert diagnoses whether their plants are suffering from gray mold or spider mites? By video chatting with a representative and streaming their sick plant, the buyer would be more confident about their purchase (and more likely to spend money).

Even in the pre-pandemic world, the physical mall was clinging to an outdated model. As our lives become increasingly digital, replicating certain material aspects of shopping will always lure in customers.

Plus, if there’s one thing Zappos (an early e-commerce trailblazer) taught us, it’s that customer experience matters. The retail giant got ahead by encouraging customers to order multiple sizes of the same product, and then providing a free and easy way to return whatever didn’t fit.

No, live commerce isn’t an exact replica of the in-store shopping experience. But in an economy where customer experience dictates which brands live and which brands die, why not reach shoppers on their own terms?

Originally posted on Wowza.com