U.S. retailers and brands are waking up to the potential of livestreaming.
That’s the message from Coresight Research, which in a new report entitled “Playbook: Livestreaming E-commerce in the U.S.,” indicates that livestreaming is well established in China and is becoming an essential marketing tool for brands and retailers in the U.S. because it provides interactive content in real time, directly engaging consumers.
Coresight expects the U.S. livestreaming market to grow to $11 billion by the end of 2021 and to $25 billion by 2023. The research company estimated the livestreaming market was worth $5 billion in 2020.
The livestreaming e-commerce market in China will total $305 billion in 2021, representing 384 percent growth from 2019, according to KPMG and Alibaba’s research unit, AliResearch.
“Although U.S. retailers can take learnings from China, they will need to adapt livestreaming e-commerce strategies to U.S. market conditions to effectively engage consumers and drive sales,” Coresight indicated in its playbook.
Coresight characterizes livestreaming as “a key differentiator in the near future.…We are already seeing e-commerce players make efforts in this space: Amazon launched interactive video services in July 2020, and Facebook launched the platform Shops in May 2020 to enable businesses to build their own shops on social media platforms Facebook and Instagram.”
Coresight, in a February Global Trends Report, predicted that livestreaming in the U.S. will be seen in categories beyond apparel and beauty this year — even up to big-ticket items such as real estate and automobiles. Department stores globally, such as Galeries Lafayette in Paris, China’s Intime, London’s Selfridges and Suntec City in Singapore, “have integrated livestreaming to encourage consumers to shop online across multiple product categories amid the pandemic,” Coresight reported.
Coresight’s February report noted that during the lockdown in China, Intime department stores deployed more than 5,000 of their sales associates to host several livestream sessions each day. According to Intime, online traffic during the first three hours of livestream selling generated more than six months worth of physical traffic at its brick-and-mortar locations.
Coresight’s livestreaming playbook emphasizes that using the format through popular social media can help brands tap younger demographics, as Gen Z and Millennials are the primary users of platforms such as Facebook, Instagram and TikTok.
Coresight’s livestreaming playbook, which was released Thursday, lists several best practices, among them:
• Provide an integrated livestreaming platform for browsing, checkout, customer service and product reviews to increase conversion rates and customer retention. According to a recent Coresight Research survey, 77.6 percent of U.S. consumers who use social media as part of the shopping process would give up making a purchase because of a lack of in-platform checkout functionality.
• Offer personalized consultations to consumers, such as the live consultations La Mer offers lasting 30 to 45 minutes, or that Bobbi Brown has been hosting since June 2020. According to Bobbi Brown, 46 percent of people convert (make a purchase) from the consultation within three hours.
• Create a sense of urgency and product scarcity to drive conversion. “A good product at a low price is the golden bait for any marketing campaign. In livestreaming, brands can promote their bestselling products and increase consumer excitement by offering ‘hot deals’ that are exclusive to the livestream viewers.”
• A charismatic host plays a critical role in persuading viewers to make a purchase during a livestreaming session. Viewers are also able to directly ask hosts about the products in real time, so enthusiastic and knowledgeable hosts are key. But using sales associates for livestreaming sessions saves costs and there’s more flexibility in scheduling livestreaming sessions, compared to using celebrities.
• Utilize artificial intelligence and augmented reality to boost engagement. AR is “particularly effective” in the beauty sector.