Livestream shopping is in its infancy in the United States—and it’s not clear whether it will get more mature.
The market research firm Coresight Research is bullish on it taking off, predicting the livestream e-commerce market will reach $31.7 billion this year, triple its 2021 value. But data from business intelligence company Morning Consult shows American consumers aren’t rushing to livestream shopping. A survey conducted by it in December found that 78% of respondents have never participated in a livestream event and 69% don’t know what livestreaming is.
Major retailers and social media platforms have had mixed results with livestreaming so far. Walmart and Ulta Beauty struck partnerships with livestream startups like TalkShopLive and Buywith, while YouTube tapped Shopify to boost its live shopping capabilities. Meta jettisoned livestreaming on Facebook and Instagram, and TikTok is still trying to stake its claim after initially dropping e-commerce expansion plans.
The livestreaming startup space, which saw the rapid-fire entrance of companies like TalkShopLive, Supergreat, Flip, Shop Lit Live, Trendio and Buywith, has quieted down in the past year. Few new players have jumped into the market, and investment in it has slowed.
To gain a better understanding of where livestream shopping is heading, for the latest edition of our ongoing series posing questions relevant to indie beauty, we asked nine consultants, investors, executives, brand executives and founders the following questions: What is your outlook for the livestreaming market in the United States? Will it evolve as a competitor to traditional e-commerce shopping or remain on the fringe of social commerce?
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Pauline Mexmain Senior Manager, Kearney During the height of the pandemic, Q1 2021, the Kearney Consumer Institute, our internal consumer think tank, looked into livestream shopping in its report, "I See Your True Colors." Consumer familiarity with and consumers trying out livestreaming was in its relative infancy back then. Looking at usage data then—32% familiar, 68% unfamiliar or somewhat familiar and only 15% made a purchase from livestreams—the comparison with Morning Consult’s December 2022 data is not necessarily surprising. We saw a flattening of the early pandemic positive trend.
Fast forward to 2023, U.S. livestreaming is still nascent, accounting for less than 5% of total e-commerce sales. What’s happening here? Brands seem to be treating it mainly as an additional social lever rather than a distinct sales channel. Livestreaming is trickier in the U.S. since the market is far more fragmented than in China, particularly given Alibaba and Tmall’s dominance there. The China livestream market also benefits from more advanced digital wallets and a streamlined checkout process that allows the customer to purchase directly from the stream.
The U.S. livestream future trajectory ultimately boils down to:
1. Retailers and brands answering the question, what should the role of livestream shopping be? For example, is it an awareness builder, a conversion accelerator or a lever to optimize processes like product development and demand?
2. What net value creation can we expect from it? If it’s considered a channel, is there the potential for cannibalization from other online channels like traditional e-comm and social commerce? This has to be factored in, with a possible risk of associated profitability dilution.
- Tiffany Obenchain Managing Partner, NextWorld Evergreen
From a macro perspective, I believe that, as more and more U.S. consumers research and purchase items on their phones, more innovative online shopping platforms will emerge. I expect the rate of U.S. adoption to be a function of U.S. consumer spending and e-commerce penetration. Growth of both have stalled as of late.
According to eMarketer, e-commerce represented roughly 15% of U.S. retail sales between 2020 and 2022, up from 10% in 2018. In contrast, e-commerce represented 45% of 2022 retail sales in China, which has the most mature livestreaming market. The latter is projected to generate $647 billion in sales in 2023 versus the U.S.’s livestreaming market at $32 million, per Coresight Research data cited by The New York Times.
From a consumer perspective, I see livestreaming as effectively "QVC for Gen Z." The device (phone versus TV), content and products may be different, but the core concept is the same.
- Nik Sharma CEO, Sharma Brands
The U.S. livestreaming market is growing, but it's a lot different than what everyone (and every VC) thought it would be. The original hypothesis was, "Commerce in Asia is largely driven by livestreaming, so brands should be livestreaming in the U.S." But in reality, the way it's shaping to be is that creators who are livestreaming are starting to make a wave in the commerce scene by livestreaming and selling products.
As we head into 2024, I predict that brands will hire an in-house content creator to livestream their products—almost like a Costco road show—but livestreamed where people are spending time like on TikTok, Instagram, Facebook, etc.
- Stephen Letourneau Chief Brand Officer and Founder, BFYW
Given the ongoing transition from IRL experiences to those streamed, I believe we will see the livestream market have a major, although awkwardly executed, splash in Q4 of this year or Q1 of next as people look for an alternative to the meh vibes of brick-and-mortar and the humdrum of ordering everything on Amazon. Livestreaming allows for a very controlled interactive experience without actually having to leave your home or your wine.
While millennials and gen Z are helping to pioneer the experiences over things like skydiving, mini-submarine excursions and the ever-popular month-long VRBO vacation stays, I think they will be the surprise shopper pushing brands to not only have a livestreaming component, but the format will quickly evolve to a talk show-style story-selling platform.
By fall of 2024, a mix of brands will try to keep an authentic look and feel by filming from a conference room or warehouse space. This will start to evolve to highly-stylized show settings where the product sits more discreetly in the background, while remaining ever present. Eventually, we will have a long-story format complete with character development to coincide with product launches. Livestreaming will move rapidly from HSN selling to Netflix series.
I, for one, am looking forward to the evolution of livesteam salespeople becoming mini-celebs by holiday 2025, and all of the brand swag that will augment actual product sales like Prior-branded water bottles, Fenty hoodies and Undefined Beauty's epic weekender duffle.
- Marie Driscoll CFA, Adjunct Professor at Parsons School of Design
When an idea/product/service is slow to take off, let’s change the name and some of the features, and iterate as is the norm with startups, tech companies and more. Livestreaming, incredibly successful in China, has been slow to gain traction in the U.S. despite the success of TV shopping venues such as QVC, HSN, and others. So, let’s rebrand it to video shopping, which allows for a livestream to live as content online, post-livestream, to provide shoppers the experience to interact between brand, product, salesperson and audience.
In the U.S., online access and mobility has enabled shoppers to shop when they want, where they want and on their own terms versus a livestream that occurs at a particular time where you must show up to participate. In the U.S., video shopping allows for shoppers to shop when they want while enjoying the benefits of livestreaming—an informed salesperson pointing out product benefits and features in an engaging perhaps entertaining way. Often shoppers return a few times before making a purchase, reviewing the video and comparing products.
Since video shopping has a longer life, it can support more sales over a longer time period. Many brands are using video shopping or social commerce as a way to engage consumers and develop brand relationships.
Retailers and brands should test the video shopping waters and use store associates who know the brands enough to share their knowledge and enthusiasm. A subject matter expert such as a makeup artist to introduce a new eyeliner or a dermatologist to explain a new skincare line. Many retail associates are brand advocates, use them in an authentic way.
Video shopping is the best of both worlds, knowledgable and sociable sales associates allowing shoppers to discover products when it suits them. Nothing compares with touching a cashmere sweater or smelling a fragrance or skincare product, and color is distorted online. A sales associate addresses all these shopper concerns and more in a video shopping session.
Finally, retailers and brands don’t need video-streams to be perfectly produced ads fit for the Super Bowl. Authenticity is key. Regularity is necessary and scrappy is better, unless you are high-end luxury.
- Ryan Babenzien CEO and Co-Founder, Jolie
Livestreaming will be a part of e-commerce. I don't see it as a competitor to it, but more of a collaborator. E-commerce has evolved and will continue to and live shopping is a part of the ecosystem, just like UGC or reviews. None of them are replacing the commerce component, but simply adding another lane of awareness, discovery or intent for buyers. Live shopping clearly had a moment during COVID when no one could go shopping, and people were spending more time living online and experimenting with new things. But, even in the aggressive forecast, liveshopping may make up 5% of the e-commerce market so that says a lot.
At Jolie, we fully embrace the power of social commerce and digital word of mouth, which is spread by our customers across social channels. When a customer becomes an advocate, you have something really powerful and it allows brands to scale faster and healthier (i.e., profitably). For context, we'll have over 15,000 UGC pieces this year, which is incredible when you think that we're only 22 months old.
- Joel Palix Founder, Palix Unlimited
Livestreaming in the U.S. needs to find its channel of choice just like live shopping has found a loyal audience with QVC and HSN. My bet is that TikTok could become the channel where livestreaming takes off. It is a social media platform known for its short, effective videos, it captures a young audience that is into impulse buying, it is successful at getting a large number of beauty influencers producing creative, genuine and compelling content.
Based on what we can see with TikTok in the U.K., the takeoff of livestreaming is likely to be much slower than what we see in Asia, however.
- Rohit Banota Founder, Jump Accelerator
Live shopping is a subset of the home shopping market. Live TV shopping existed way before live streaming online, and we need to use that as a reference. All runaway digital successes have been those solutions/platforms where the physical or real world solution is first replicated and then made better, meaningfully.
For example, Facebook was the first platform that let people be themselves—not their avatars—and virtually interact with their existing social connections in the real world. As an aside, the Chinese market benefitted most from a young, but comprehensive eco-system of mass platforms, mobile apps, social commerce and livestreaming services that were all integrated well during the mass consumer's adoption of digital shopping. Let's do a more fundamental analysis.
Drivers of the livestreaming market in the U.S. over live TV shopping:
1. Audience size will increase because of the higher frequency of such events versus live TV if barriers to trial for both consumers and brands are removed.
2. Audience size will increase because of the democratization of newer categories like sexual wellness, foot care, eye care, etc., for discovery and deals.
3. Engagement is higher on digital, plus more celeb-connect on digital versus live TV shopping, equating to higher conversion rates.
4. Younger audiences, who are in tune with social media, will favor the choice over live TV shopping, whereas the older generation may shop for deals.
Inhibitors in the U.S. over live TV shopping:
1. Lack of awareness of specific livestreaming events. The evolution of livestreaming platforms enabling participation from brands and helping brands market their events will be the key.
2. Not every brand can afford influencers or celebrities, so the founder's role and readiness will also become critical. This could be a hurdle compared to sending an email blast or having products onsite. You have to prepare, get camera-friendly, learn to pitch and keep it interesting. Plus, the production value might not beat that of TV.
3. Willingness and readiness of smaller beauty brands to be comfortable with the medium. Verishop has launched a service where they want to train and educate beauty founders on their business and content creation, which tells us there is a learning curve here for sure. Not everyone is cut out for this.
4. The big beauty brands will weigh it against live TV shopping. For them, it will come down to whether the fragmented social media platforms outdo mass live TV shopping in terms of audience, engagement, sales or profits. They might decide to stick with a mass platform like Amazon.
5. Then, it will be about the experience of these events versus shopping in stores or online. It could evolve to be just another form of QVC with big deals and no paradox of choice versus shopping by oneself. Easier to create a better experience versus e-comm than in store.
Livestreaming e-commerce seems to have too many complexities, especially since a lot of the drivers are contingent on overcoming the inhibitors first. It's possible if a few mass digital commerce platforms take it upon themselves to enable beauty brands to drive the penetration of livestreaming, and then the newer platforms offer innovation.
- Daniel Nickel Founder, Tote
I see livestreaming more as a solution for brands and retailers looking to give shoppers another way to engage and interact with their staff and products. So, rather than one central livestreaming platform exploding in the next five years and dominating the space, I think we'll see brands using the tech to run in-house livestreaming events from time to time.
I think the bigger trend is brands giving their customers various options on how they want to engage, so they can meet each particular shopper where they're at.
If you have a question you’d like Beauty Independent to ask consultants, investors, brand executives and founders, please send it to editor@beautyindependent.com.
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