The RetailWire Podcast

Unraveling the Livestream Shopping Phenomenon: Insights From Retail Industry Experts

• Vanessa Jean Louis

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Get ready for a riveting discussion about the evolving world of livestream shopping in retail. Our esteemed guests for this episode include Mark Price, Ricardo Belmar, and Sharon Gai, who's got her fingers on the pulse of livestream shopping through her extensive experience at Alibaba. As we unpack the rise of livestream shopping from being a marketplace sellers' tactic to a multi-billion dollar industry in China, we shed light on the elements that make a live stream successful. Buckle up as we navigate the nuances of the presenter, the brand, the content, and the art of selling the product.

Can retailers truly harness livestreaming to drive sales? This is the question we grapple with as we explore the practicality of repurposing video content and using AI chatbot technology for interactive video replays. We encourage you to join us in dissecting the delicate balance between the actual profit of a product and the excitement it generates, while deliberating on the categories that thrive in the livestreaming space. 

The conversation wouldn't be complete without discussing the crucial role of influencers and presenter expertise in live streaming. Brace yourselves for an intriguing comparison of the dynamics between the West and China regarding influencers and MCNs. Walking the fine line between profitability, cannibalization, and incrementality, we ponder the challenges smaller retailers face and how to gauge the success of your livestreaming strategy. So, if you're seeking the answer to higher return rates, don't miss out on this compelling dialogue. Get in on the retail revolution now!

RetailWire is the retail industry's premier source for news, analysis, and discussion. With a focus on the latest trends, technology, and consumer behavior, RetailWire provides a platform for industry experts and thought leaders to share their insights and perspectives. Whether you're a retailer, supplier, or service provider, RetailWire is your go-to destination for staying informed and ahead of the curve.

Be sure to leave us a comment and let us know what you think. You might even hear your comment read on the next episode!

To learn more, or to join our Daily Discussions, visit RetailWire.com.

Speaker 1:

Hey there, Vanessa, here from RetailWirecom. You are about to listen to a very special episode, which is a replay of the livestream that we have on Monday, October 23rd. The topic was livestream shopping Is it in decline or is it on the rise? We were joined by special guests, Mark Price, Ricardo Belmar and Sharon Guy, who all discussed some amazing points on the topic. Before we dive in, remember if you are loving the podcast, go ahead and make sure you subscribe to our channel and like the video. All right, let's dive into today's episode.

Speaker 2:

Good morning If you are on Central Time or on Pacific Time, and Good Afternoon if you are East Coast or in other parts of the world. My name is Mark Price and I am one of the panelists on RetailWire. It is my pleasure to be able to be your moderator today for the future tech-themed discussion. We're going to be talking today about live streaming in retail and question of whether it's going to be increasing or decreasing, and what the challenges are associated with it. But before we dive in together, why don't I just take this opportunity and introduce the other panelists and let them say a little bit about themselves? Just real quick, because I forgot to introduce myself. I am the chief analyst after 20 years in analytics consulting, focused primarily on retail and e-commerce, as well as business services. I have an MBA from the Darden School at the University of Virginia. I'm also an adjunct professor at the University of St Thomas in Minneapolis, so I will now turn it over and let Sharon introduce herself.

Speaker 3:

Thanks, mark. Hi everyone, my name is Sharon Guy. I'm really happy to be here. So live streaming is a topic that's near and dear to my heart because when I used to work at Alibaba, I hosted one of Alibaba's very first live streams in Los Angeles with a celebrity at the time. We'll talk all about that, but right now I'm an author and keynote speaker on e-commerce, retail and, as well as the live streaming space, I think, the Chinese e-commerce thing side of the house. So topics like live streaming is something that is growing in the US. It's very mature in China. My book called E-commerce Reimagined Answers to Exactly that, so today I'll be sharing things from the book as well.

Speaker 2:

That is wonderful. Thank you very much, Ricardo. When you introduce yourself, please.

Speaker 4:

Hey, thanks, mark. Hi, I'm Ricardo Belmar. I'm currently lead partner marketing for retail and consumer goods in the Americas at Microsoft and I've been in the retail industry in one form or another on the technology side of things for the last 20 years give or take, ranging from delivering different in-store technologies, things like digital signage to Wi-Fi, other technologies that sort. So here's some back-end things like different cloud applications, as the partners that I work with now and have just been fortunate enough to really work across lots of different retail segments, whether it's mass merchants to home goods and other specialty types of retail. So I just will say for me this is a really interesting topic because I happen to be a big proponent of live streaming as part of a bigger video commerce strategy. So it's been super interesting to watch which retailers are more open to embracing this technology than others.

Speaker 2:

Great, Thank you and Sharon, given your experience in the Chinese market, why don't you ground us a little bit, if you can, and give us a little bit of sort of the history of live streaming, and then maybe a few thoughts about where you see it today?

Speaker 3:

Sure. So the live streaming phenomenon really occurred in the year of 20. At first it was a tactic for a lot of sellers in the marketplace to be more competitive. So, as you know, if you are a brand or seller on the marketplace by throwing money in terms of bidding words and search terms and keywords, it's going to get really costly really quickly, especially if you don't have a very defined brand, if consumers aren't directly searching for your brand in this marketplace. So back then it was sort of a mechanism for brands to differentiate themselves. So instead of a two dimensional product photo, which then evolved into a more 3D or more interactive video as something to show in your product detail page, these brands started to live stream. So they started to turn on a camera and back then there were no sort of these professional live streamers. That entire industry was not really made up yet, so it was just a store owner turned on a camera, started talking about his or her brand, and it slowly evolved into more and more professional live streamers coming into the scene.

Speaker 3:

There's somebody called via. If you Google her, she is the biggest live streamer in China. She no longer is active because she later, because she earned a lot of money. There was a lot of tax issues, so she's not really active as a streamer anymore. But now the big person in China is Austin Lee. We also call him the lipstick King. He actually used to be just he used to be an offline store salesperson at the Estee Lauder counter and catching sort of offline foot traffic and saying, hey, do you want to try out this new lip color? There's a lot of these people in these professions in these shopping malls, right on that first floor where there's so many different cosmetics, and that's where he trained a lot of his skills in terms of selling and getting people to getting people's attention, and so when he turned on his camera to sell lipstick online, it really took off.

Speaker 3:

There's we in China. We always try to figure out these different factors, you know, is it the person that's selling the product? Is it the brand? That's really working? Is it the content or how they're selling, what they're saying that's really working? And that's always some something that we're trying to figure out. So what is the formula for having this work?

Speaker 3:

But now, live streaming is a multi billion dollar industry. So within team all and team all is about 30% of total GMV is converted on a live streaming platform in a live streaming fashion. So that's a considerable amount of GMV, and it also means that as a brand or seller, you sort of can't ignore this phenomenon that's happening. So if you are not live streaming yourself, then you're probably losing out on some sort of business, and so that trend is something that I see gradually flowing over to Europe, to the US, to Australia. Tiktok shop has obviously come into the scene and they're very they're heavy hitters in the live streaming space in terms of Tiktok live, and you see a lot of streamers doing this already. So if I open my Tiktok, there's a lot of streaming rooms that selling everything from bags to cosmetics, to clothing, to candy, and every week I'm seeing sort of this new trend that's on Tiktok.

Speaker 2:

That's great. I mean, stop there, because you've got so much great information. Really appreciate it. Ricardo, could you put this in maybe the broader context of video commerce as a whole, because it strikes me that this actually goes back to shop NBC and QBC and a lot of the online not online but the on TV versions that originally been in this industry for 20 plus years?

Speaker 4:

Yeah, I mean, I think it is pretty common to draw those parallels, Like you just listed, you know how, in terms of defining how is this different, right, how is this reaching new audience? Potentially and I think it's interesting to look at this maybe two different ways, and that's why I referenced it as part of a larger video commerce strategy. So there's sort of an entertainment component to this, right, we're watching the live stream for that, a little bit of that entertainment value. And I think that's where a lot of influencers come into play, where you're also then getting the benefit and ability to shop and transact, commerce and buy things as a consumer. And those tend to be, I think, more opportunistic, in that you know they're either a scheduled event or it's something that you know you promote heavily and in advance. Do that. But then there's also well, what do you do afterwards? Right, let's say you've done that.

Speaker 4:

But if I'm a retailer and I promoted my own live stream, for example, you know the live stream, in my view, is one component of the strategy. You have that real time moment when the live stream runs and you may get some business with consumers that watch that live stream. But now that, when the live stream is over. Why not repurpose some of the video that you've just generated and it is a video that's a little different than just having a product video on a website, for example? Right, it's not the same, but I've seen examples of this, for example, in the food space, particularly with in fact, some smaller regional grocery chains have done this where the live stream is about having a chef, for example, show you how to make a dish using ingredients you can buy in the store, potentially maybe even some of the products and tools that they use in the kitchen right to cook that dish. You might also be available, but once you've done.

Speaker 2:

that, richard, is probably similar to what the Today Show in Good Morning America had been doing for years. When they bring a shrimp in, they have a series of featured products and they are making making all sorts of things with the products that are up for that day.

Speaker 4:

Yeah, and that's why I think that the reuse of that is so important from the retailer's perspective because now that you've produced that, why not make it accessible through your website right for subsequent viewings, where you could still generate sales from that video? And their newer technology is now available. That even makes that replay a little bit more interactive. You know, we're seeing AI creep into even this video space where now you could think of, you know, the equivalent of an AI chatbot that is responsive while you're watching the replay of that video that can still answer questions. You know, a main, I think, benefit in some of these live streams is, as I'm watching and on the consumer, maybe I want to ask something and I put it into a live chat and get a response from the influencer in the video. Well, there are technologies now that let you add an AI layer where the AI chatbot does that response for you during the replay, so you still get that interactive nature that encourages the purchase.

Speaker 2:

It seems to me that there's a piece of this about shopping as entertainment and shopping as discovery that allows people to have a different kind of experience than they would have when they're online looking at most conventional products these days. You know, one of the questions that I have about this is particular categories that work really well. If you look at QVC and ShopMBC, it tends to be fashion. Cosmetics and cookware are some of the biggest categories, though they found that they can brought out. Brought out on that over time. Sharon, I wonder if you could give us a little bit of the lessons from the Chinese market and then, as you see it in the US, which of those lessons actually carry over to the US and which ones? Is it not so much the same?

Speaker 3:

I think yeah. So what I'm seeing is a lot of startups in this field are trying to replicate that success. So there's firework. You might heard of them. They're very big in the grocery space. They've worked with Walmart before. They've worked with Whole Foods as well in adding that live streaming layer to a brand's or retailer's native website.

Speaker 3:

So, contrary to the e-commerce landscape in China where 99% of shoppers are going to a marketplace to buy something, in the West it's a sort of varied landscape between a marketplace like Amazon versus a retailer versus a brandedcom. So that's a startup that's in that state. There's whatnot that's more focusing on a mobile strategy. So their sort of niche in the market is toys and collectibles. They've onboarded a lot of live streamers that have these coveted Pokemon cards, and that was the community that they brought on and had a sure footing in that space. And then you have TikTok, which is more cross-packed categories. So everything from fashion to beauty to little bits of sort of home goods or toys. There's also a lot of crystals that are sold on TikTok as well, and so I would say the trend of live streaming is definitely thickening in the West, but that frequency or the habit of watching is the part where it's sort of less popular.

Speaker 2:

So do either. Thank you, do either of you have a sense of kind of the profitability of different categories in live streaming? I know the article refers to very, very high returns in jewelry, for example. That could really significantly cut into the profitability. I don't have any numbers personally of seeing some of those results, but I was wondering if either of the two of you do.

Speaker 3:

I'll go ahead. So in terms of profitability, a lot of it is tied to the products, the category that I see. So obviously things that work well on an e-commerce space are things that are smaller and lighter. So that's why the toys category, the jewelry category a lot of people on TikTok sell crystals and sort of these home good knick-knack things that you like, posters that you hang, that sort of serves as an art or a instead of a painting.

Speaker 3:

It's a. There are these stickers that you decorate your walls with. A lot of those things have very high margins innately itself. Stickers is also a very popular product within the live streaming space because it's sort of fun to look at and there's a lot of collaboration possibilities with different cartoons or IPs or quotes. So a lot of the things that you see work well in live streaming are products that have that are very content, rich in and of themselves. So they're very they attract attention because when you are, as a viewer, looking at live streaming, sometimes you're just scrolling through an app and then suddenly there's this video that's catching your attention and somebody's talking about a product or brand live, and so whatever that item is that's able to catch that viewers attention to stop them from scrolling away, or categories that work well.

Speaker 2:

It seems to me that there's there's a. There needs to be a balance between the the actual penny profit, if you will, that a product can deliver. You're kind of what's the price point at it and what's the level of excitement generated. Because you can have a lot of excitement generated and, as you talked about with stickers, I guess the question that I wonder with that in the US is can something like that achieve enough of a volume in a short period of time to make that as profitable as perhaps selling a little bit fewer of, for example, you might say crystal figures, or you might say pots, pots and pans and and hand protectors or silverware thing thing, things like that. That might be kind of a little bit of a higher price point, perhaps a tiny bit less excitement than the latest cartoon or movie stickers, but could still have a lot of appeal. Does that make sense? What do you think, ricardo?

Speaker 4:

I would say this is where you kind of think about what's the entertainment value in the lives. You're right. So there is, I think, very much a concept of what shows well on camera versus what's something that if you were looking at it in person it may look and have a certain look and feel to you and you may experience it a certain way, but that changes a little bit when you put it on camera. So I think you're right that you kind of have to have a story to go with it, to go with that live stream on camera which speaks a little bit to the entertainment value. And I think what Sharon said specifically about things that are content rich, I think is very true here, because if it lends itself to tell a content-oriented story, it's likely to lend itself well, I think, in that live stream sales mode. Now I think another way you can look at it is what audience are you trying to reach? So in a sense I think of this as if you're focusing on that entertainment value.

Speaker 4:

You're probably trying to broaden the types of products that you're going to show in this live stream and have a wide range of them.

Speaker 4:

But if I look at this maybe from a specific retailer's point of view.

Speaker 4:

They may be very narrowly focused on one type of product and it may or may not lend itself to be content rich, which means they need the person who's on the live stream to really provide some of that add-on value.

Speaker 4:

I didn't do a good job of talking about the product and showing it off, and some of the conversations I've had around this have sent around retailers looking to their own store teams who have that kind of product expertise where they might have that very same conversation with you in a store, with a customer about showing you a product and telling you what's great about it, who then are naturally inclined to translate well on camera, to share that same story and tell that same story about the product on camera. I think the difference there is. You have to kind of look at it and say am I starting from a perspective of I'm just expecting people to discover my live stream because I'm originating it on TikTok or another medium right that already is going to have a propensity to show other live streams that people can discover and find, or is this really meant to be targeted to a customer base I already have from my website?

Speaker 4:

for example and I want the live stream specifically from my website for people who I know are going to come to me because they already have a propensity towards the products I have. But I need to rely on the live stream for that extra push to get that conversion.

Speaker 2:

Well, ricardo, you mentioned something a little bit earlier about the presenter, and John, who submitted a question, had an excellent point, and I'm really wondering, karen, we know that in China the presenters are possibly just overwhelmingly popular. What I'm wondering in the US is I know from QVC and Shop NBC that frequent shoppers get very attached to their presenters, but that's different than having an influencer or somebody who brings their own cachet, separate from the products in. What do you find when you look at the US market as it compares to the Chinese market in terms of the use of influencers and the success of influencers in the live stream?

Speaker 3:

Yeah, so in China there are these companies called MCN organizations. They're sort of the organization that ropes up a lot of these mega influencers. You can think of them as agencies, almost. So if you're a brand, instead of going on a one-to-one relationship. So today I have to have this live stream. So I have to find X live streamer. Next day I have another product. I have to find Y live streamer.

Speaker 3:

You go to these organizations that have hundreds of influencers under their umbrella. You say I'm this brand, can you give me a sort of packaged live streaming set of live streamers for me to work with for this quarter or this year? And then that organization will then match you with a certain type of influencer. What I see in the West and what's happening is there are these databases. So Isaiah is one, grinn is another one, where they're doing this in a more of a database way.

Speaker 3:

So as a brand, you're still going to this website and trying to search and find this right influencers, whereas in China it's a very handheld experience with certain organizations where it's less effort from a brand side, more involvement from the MCN side that's proactively trying to match you with the right influencer because they have so much knowledge on who's watching these people. So some influencers are their mom, so a lot of her audience is new mothers. Some other influencers are a bit older, so the people that watch her are also in an age range that's a bit older. Some are male, so most people that watch him are guys, so it really varies, but that's definitely something that I'm seeing as an absence. Is that type of model of working or that type of organization in the West?

Speaker 2:

So one of the questions so John's further question was about return rates and presenters. Would you think, ricardo, that having the right presenter because you talked about people who are sort of steeped in the business as opposed to just your standard MC do you believe that that has an impact, or should have an impact, on return rates?

Speaker 4:

Yeah, I actually do. I think that there is definitely value in the level of expertise of who's presenting the particular product. I think you do have to layer on to that. Some products just naturally have higher return rates. We know this from e-commerce in general, that you're apparel in particular because of size-eat issues, we know those have higher return rates. I think that's a little bit of a challenge to expect that having the right influencer or presenter is going to change that one, but maybe more so on other products and categories where the educational value comes through based on the level of expertise of that presenter.

Speaker 4:

If I'm the consumer and this livestream catches my attention, or even in the example where I discovered the livestream by going through a retailer's website and I'm already somewhat interested in their products, getting me to that purchase decision I think has a lot to do with the specifics around. What is the presenter telling me about the product? What are they telling me about how they're using it? If the livestream includes a demonstration and this, for example, is, I think, where things like that example of mimicking the cooking shows, the Today Show cooking demonstration kind of thing lends itself quite nicely to this, because then you automatically see kind of the value of, whether it's the ingredients or the pots and pans or tools, whatever it is, it's very immediate to the consumer.

Speaker 4:

Watching that, I do think that the more precision that presenter has in terms of talking about what the product does, what you can do with it, what the outcome is for the consumer, the better the purchase experience is going to be for that consumer and the lower the return rate would be. I think we still may have a little bit of a challenge when it comes to high return rate items like apparel. But then again, if you're a presenter is someone who works in the store for that retail brand where they sell that particular piece of clothing and they know, because they have experience from other customers who have bought it, that maybe the sizing runs a little differently and they can convey that in the livestream. That could be something that makes a difference. I think it'd be interesting to see how much of an impact that has. I question a little bit, but my suspicion is that you would see a little bit of a better result there, depending on the knowledge level of that presenter.

Speaker 2:

It sounds like you're talking about. Your example was about cooking Hard goods, spices, a range of those kinds of products around food. What are the categories? I'll open it to both of you. What are the categories you think are especially well suited to having an expertise focused presenter or influencer.

Speaker 4:

I think Sharon listed a few earlier things. Like you mentioned, things like toys, things, I think, things around home goods, household tools maybe even sticking with that kitchen thing right appliances, those kind of hard goods I think lend themselves well because they're more easily it's possible for the presenter to perform a good demonstration of them. I think the better the quality and the depth available to the presenter to present and show off the products, the better that result will be. I think, when we're talking about products that maybe are a little more involved and harder to really visually demonstrate them, I think that's where it may be a little more challenging.

Speaker 2:

Now what's interesting is that George Ann just jumped in with a question that said that what she's discovering versus Facebook Live is that it's the human factor and it's getting to know the presenter. They become almost like family the way they do on Shop NBC or QVC and that kind of comfort level. Sharon, as you look, it sounds a little different than the Chinese market in terms of the level of connection that some of these frequent shoppers are getting, or feeling like they get, with the host. There are different kinds of hosts. That plays well here as opposed to China.

Speaker 3:

I think the hosts that I've seen in the US versus China is they're a little more casual and a little less rigid in terms of structure. I think that's just to do with the maturity levels of live streaming as a phenomenon and how much of a company or business has been created around them. So in China, at VIA, for instance. So the live streamer that I mentioned in my book, who I've also had a chance to work with, she has a 200 people team that sits behind her that subpaid her to do so. You're providing her with samples that she has to try. If it's some sort of face cream, she's gonna try it for a month to see if actually her wrinkles disappeared or if it's just kind of nice packaging, and she will refuse brands that she feels that are not authentic or it's just all marketing versus a product that actually works. And, of course, she's just one person. So that's why she relies on her 200 people team to test all of these products for her and coordinate with all of these brands. In the US, the streamers that I have seen and gotten a chance to work with, they're operating with a bit smaller teams. They're also a lot more flexible with the way that they can work with brands. So if a brand says I'm willing to, you know, give you this type of resource as well, the live streamer will say okay, and they're also a little happier to negotiate on rates, whereas the streamers I've seen in China are very rigid. So if you can't pay for that number, then I cannot work with you, and so there's sort of differences there as well. The family aspect, I would say, is a commonality between the two.

Speaker 3:

Streamers might start off as streamers but eventually, you know, as a viewer I've also watched via myself. I've bought a ton of new brands and new products. I have never seen anywhere, but it did appear in her live stream room one day and I caught it and from her one minute or so of talking about the brand or the product. I purchased it without ever having seen a Facebook ad, instagram ad of that product, and I'm a happy customer also. So I'm happy that I bought a lot of new products from her because they've added a little bit of delight in my life. So I think it's an interesting connection that these streamers eventually blossom into and you eventually you recognize that they're a pivotal part, they play a pivotal part in our overall e-commerce ecosystem.

Speaker 2:

Very good. Well, I want to thank you all. We've had a fascinating conversation today, and I really think we've just sort of touched on this phenomenon. One of the things that I give some thought to is, given that there is an unlimited number of places on the internet that a consumer can park themselves to see live streaming, the mall approach at least allows consolidation, or very large retailers allow consolidation as well.

Speaker 2:

It seems to me that one of the challenges with smaller retailers is you may get a very passionate, smaller group of consumers, maybe not as much new customers or prospects. You tend to get a lot more repeat customers, and it may not have as much incrementality as the larger stores where people could come on because of the brand, or at Amazon because they're on anyway, or on TikTok because they're on there anyway. That seems to be the places that you could easily get extra incrementality. Because we've talked about profitability, we haven't talked about incrementality yet, and if you have a thriving e-commerce business, the question is how much of that are you stealing through the live streaming or not? And so there's a whole bunch of measurement that, in my mind, is some of the critical links to this to determine cannibalization, incrementality, profitability all of those different measures come into how you really evaluate the success of the strategy and also how much is it driving new customers versus loading existing ones. So with that, ending with measurement, take care everyone, bye, bye.

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