ShopShops, a five-year-old platform that hosts shoppable live streams from global boutiques to sell to Chinese customers, is launching in the US. For the first time, broadcasts targeting American customers will be hosted on the app as video shopping in the country booms.
Starting on 28 November, Rebecca Minkoff will co-host “She's Live on ShopShops”, a four-week virtual holiday market focusing on female-founded companies including Wander Beauty, Llani, Kosterina, Joomi Lim and Gas Bijoux. Customers can follow along as Minkoff and other brand founders discuss their products, and checkout in the app.
Video shopping is already big in China: Singles Day saw $74 billion in sales thanks to live streaming; by 2022, an estimated 20 per cent of all online shopping in China will be via video. But it took store closures and travel restrictions for it to gain traction in the West, with a host of brands, including Gucci, Moda Operandi and Farfetch, testing it this autumn. ShopShops’s US launch is a clear indicator that investors think the holiday season might provide a boon to adoption as brands look for new ways to attract customers other than discounting. Forerunner Ventures general partner Eurie Kim expects customers to try out live-stream commerce, which is more engaging than traditional e-commerce. But adoption is still nascent in the US, says Forrester analyst Sucharita Kodali. “Most [stores] don’t have the skill sets or vision on how to execute this at scale,” she says.
Founded by Liyia Wu, ShopShops has raised $20 million from investors including Forerunner Ventures, Union Square Ventures and TCG Capital. Its audience of Chinese consumers can shop international niche designer brands from home; boutiques and brands, meanwhile, earn money while stores are closed; a single broadcast on ShopShops might sell a few thousand dollars to $45,000, or more, in merchandise.
Other tech partners have stepped in. This month, messaging app Hero, used by Levi’s and Rag & Bone, added “Shoppable Stories”, for store associates to share videos on Facebook, Instagram and Snapchat. Clickable video provider Clicktivated fast-tracked live-stream shopping amid a “dramatic increase” in apparel, footwear and beauty videos, says CEO Chris Roebuck. Luxury brand clients of Powerfront, which provides one-on-one videos, have increased the number of available agents in anticipation of increased demand, according to the company.
The total live-streaming shoppable video market size in China is $135 billion, while the US is expected to grow to $25 billion over the next two years, according to Coresight Research. The holidays will be telling: Katherine Cullen, senior director of retail and consumer insights at the National Retail Federation, says now is when companies test new technology, and if they like it, it sticks. “We see this as a good time for consumers to be open to some new ways of shopping, and video gives consumers a different way to interact with product and guide their shopping journey.”
A store visit at home meets storytelling
Video shopping offers a more comfortable approach than Black Friday doorbusters and a more dynamic experience than scrolling e-commerce. “This year, it feels much safer to shop from your phone,” ShopShops’s Wu says. It’s also complementary to the needs of holiday shoppers, who particularly like to shop in stores to examine products, Cullen says. With ShopShops, a real-time host educates shoppers on new products and can suggest gift ideas in a way that mimics in-person encounters, Forerunner Ventures’s Kim adds.
“The pandemic changed my whole game,” says Yolanda White, founder of Atlanta loungewear brand Dayo. While she previously hosted pop-up stores to drive sales, those have been replaced with 15-person video shopping sessions using video creation tool Mmhmm, which raised $31 million from the likes of Sequoia Capital in October.
To combat saturation, storytelling is front and centre. For its launch with Minkoff, ShopShops is focusing on helping women-led brands make sales this season (it charges an affiliate fee for any products sold). For its eight-week live stream premiering this week, Los Angeles retailer Fred Segal is focusing on minority-owned small businesses and offering incentives to purchase the products within 72 hours. Fred Segal owner and CEO Jeff Lotman says that broadcasts like these are “what the future of shopping looks like”.
Brand holiday strategies, in a move away from long-term discounting, increasingly include personalised, engaging experiences, says Madison Schill, communication director at video shopping provider Livescale. “What will ensure engagement and brand loyalty is the investment in experience and the sense of giving back.” Livescale client Vans, for example, just started an educational video series, including giveaways and polls. Beauty brands, including Kiehl’s and Skinceuticals, give an early preview to holiday sales via video commerce. Lancôme is focusing on education for gift-givers, while other L’Oréal brands are creating localised shopping events, Schill says. For Singles Day, Lancôme Canada created an event in Mandarin for Canadian consumers, generating CA$46,000 in sales.
Intermix has just started hosting invite-only virtual fashion and shopping shows via Zoom, in which hosts preview current trends and models show current merchandise, using e-commerce data to inform the assortments. Intermix president Jyothi Rao is confident that people will use this format for buying gifts. “Our customers are very socially active and are craving new forms of entertainment. This format allows us to offer a special experience that is intimate, personal and fully immerses our most loyal customers into the brand,” Rao says.
Comparisons to China bring doubts
Many look to success in China, where 37 per cent of online shoppers have purchased through live stream in the last year, as a hopeful indicator of what’s in store for video shopping. Minkoff, for example, already has a successful business with ShopShops in China.
“This past Singles Day shows us that we should be expecting extremely high traffic on e-commerce sites on Black Friday and Cyber Monday. The record-breaking revenue that China hit is astounding,” says Roebuck, of Clicktivated. Roebuck acknowledges that there are cultural differences when it comes to shopping and gifting and that the US tends to be a few years behind the mobile-savvy Chinese consumer, but believes that massive adoption is a precursor to US behaviours.
But while China’s Singles Day is perhaps the West’s closest comparison to the Black Friday shopping rush, analysts caution against expecting the kind of windfall that video shopping brought to Alibaba. Alibaba’s Taobao Live hit $7.5 billion in the first 30 minutes of presales for Singles Day. The scale in the US and Europe is “way smaller”, says Forrester analyst Xiaofeng Wang.
Interest is growing, says Lena Roland, managing editor of marketing analytics firm WARC Knowledge. A recent WARC survey indicated that at least 35 per cent of respondents in Asia (excluding China), Europe and North America cited it as a vital emerging technology.
Roland says that it checks a lot of boxes: influencer marketing, instant feedback, product trials and community. “With uncertainty about the availability of non-essential physical retail stores, live video offers brands a new avenue to engage festive shoppers. Done well, video gives consumers access to expert advice, instant response and builds a sense of community.”
To become a Vogue Business Member and receive the Technology Edit newsletter, click here.
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
