TikTok appears to be pumping the brakes on its U.S. livestreaming plans while retailers and platforms, including Amazon.com, Poshmark, Qurate, Shein and Walmart, are stepping on the gas. So is livestreaming ready to roll in America or not?
A Wall Street Journal article yesterday reported that TikTok is pushing back plans to open its TikTok Shop platform because of “tepid adoption of live-streaming e-commerce in the U.S.” and because sellers are hesitant to commit to the video-sharing app over ban concerns.
The latest news on TikTok is part of an on-again, off-again saga regarding its live commerce aspirations. TikTok in October was reported to be hiring for fulfillment center positions in the U.S. in anticipation of a big livestreaming push. This development followed reports in July that the video-sharing app had abandoned its plans to go big with livestreaming in the U.S.
TikTok, in response to the Journal article, said that its launch plans had not been delayed and that it continues to invite more merchants as it scales up its testing program.
The challenges faced by TikTok are not unique as others with nascent livestreaming operations try to find their way in a new market that is small but shows promise.
The New York Times yesterday reported that startups are joining established players in retail and technology in chasing livestreaming opportunities they believe will break for them in a big way.
Poshmark, the peer-to-peer resale app and site, launched Posh Shows in North America in the fourth quarter of 2022. It enables sellers to feature their second-hand apparel and accessories to others looking for unique items at low prices. At a rooftop event in Midtown Manhattan, a Posh Show seller named Iva Lazovic was one of several women invited by Poshmark who sold goods to a willing audience at the event covered by the Times.
“There’s just an insane level of excitement that we have seen,” Manish Chandra, Poshmark CEO, told the Times. “In a very few short months, they’re proving that this form of live shopping works.”
Poshmark sellers have hosted over 100,000 shows since the platform began testing Posh Shows and shoppers have placed more than four million bids in the auctions.
DISCUSSION QUESTIONS: What is your analysis of the current state of livestream shopping and where do you see it going? How would increased livestream engagement affect retail stores and other parts of retailers’ businesses?
Neil Saunders, Managing Director, GlobalData
Livestream shopping has become more important and it will continue to grow; however, I don’t think it will become as significant in the US as it is in countries like China. That said, there are particularly demographics and situations where live-streaming works well. Poshmark, for example, is well suited to livestream because it sells a wide range of unique items which benefit from being showcased. Its younger audience is also receptive to livestream shopping. For retailers, this is another route to market that needs to be explored and integrated into the ever-more complex retail ecosystem.
Patrick Jacobs, Co-Founder, Immerss
It’s still going to be a while (if ever) before the market ever catches fire like China, but we’re seeing month-over-month growth with DTC brands using livestream shopping. It’s certainly being more thought of as a relevant, new sales channel vs. just some sort of unique brand differentiator.
Michael La Kier, President, What Brands Want, LLC
Saying Livestream Shopping is shifting into “High Gear” is an overstatement…perhaps it is shifting INTO gear. Livestream shopping has been driving huge sales overseas for some time, but US adoption has not moved as fast. It’s fair to say there is a lot of energy in the market among sellers, but not so much in terms of buyers. If you pull apart the Poshmark numbers…that’s only an average of 40 bids for the 100,000 shows.
Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC
After reading this article, the first thing that came to mind was QVC and HSN, the shows that broadcast live and recorded product pitches to consumers. Moving to an emphasis on social channels, which are free, is a natural move. Livestreaming in shorter chunks, pitching the latest and greatest, introducing new products, and more is a perfect use case.
Richard Hernandez, Merchant Director
Yes, this is what I thought of as well. Both channels have been losing customers for past few years (as the demographics are changing). They have, however, been promoting their streaming platform for a long while now(to attract younger customers) but it’s slow going. Time will tell is this will become an accepted way of selling and promoting product.
Cathy Hotka, Principal, Cathy Hotka & Associates
We have a generation of digital natives who will be most receptive to purchasing over streaming channels. Retailers will be smart to take advantage of this opportunity.
Lee Peterson, EVP Thought Leadership, Marketing, WD Partners
Livestreaming really, really worked in China. To the tune of billions of dollars. Yet we have been slow to adapt to the format. The #1 reason i hear from clients and neighbors alike is, “oh, like the QVC channel?” Adaption will take longer here simply because i think it’s going to be generational. Depop is successful, (and similar) but how many boomers use it? And how many Gen Z’s have even heard of QVC? Livestreaming is going to work, it’s just going to take time in the US.
Scott Norris, Sales Development Manager
There’s also just the sheer size differential between the US and China – for any given hour there are going to be easily 4x the number of people online, and with their walled-off internet, those folks are going to be funneled into a narrower selection of sites.
Chinese physical retail infrastructure never had the chance to evolve to a US level either, so livestreaming became a leapfrog solution unique to that market. While growing well in Korea and Japan, streaming is still a tiny percentage in those markets (<2% per Statista) as the retail ecosystems there have so many more choices. So while there is plenty of room for growth, I wouldn’t expect Western streaming commerce to ever reach Chinese levels.
Lee Peterson, EVP Thought Leadership, Marketing, WD Partners
Agree. I saw the CEO of Alibaba in a video say they did $44b in 2020 using livestreaming. But that was covid lock-down fueled and to your point, there’s a lot more Chinese! BUT. . . . ..44b is no joke and most retailers in the US would settle for one or two B, but the true issue at heart is the slow motion, “fast second” mentality most US retailers still have, despite getting run over by AMZN this entire century, about developing new ideas. Adaptation to BOPIS, a customer ‘love’ since e-com started, is still being fully developed! SO IMO, we’re behind for a lot of reasons and the vast potential of this platform has only just begun here. As Bezos once said, “if you are leaning away from the future, the future will win every time.”
Ken Morris, Managing Partner Cambridge Retail Advisors
Livestream shopping is equal parts engagement, conversions, tech, and UGC (user-generated content). I see this as yet another channel for sales and, like any other channel, it has impact on people, process, and technology within the retailer’s organization. The promise is there, but the required platform modifications are significant.
The key here is the UGC. The hard part will be keeping the live sellers incentivized to keep selling. Meanwhile, there’s a middle ground for fashion and beauty brands: embedding UGC content on their product detail pages (PDPs). The future will see both options adopted at scale.
Gary Sankary, Retail Industry Strategy, Esri
I’m not surprised that adoption in the US has been tepid. I feel that consumers are looking for easier, frictionless channels to shop. Live streaming constrains them to specific times. I think that’s a barrier for many shoppers across all demographics. In 2023 I don’t see a large segment of people watching a channel, waiting for something interesting to come along so. I think they want to pursue assortments on their time and in the way they like. There are better ways to reach digital natives.
Georganne Bender, Principal, KIZER & BENDER Speaking
If you ask QVC or HSN I’m sure they would tell you that livestream shopping has been around forever. Speaking for some our our clients, I can tell you that livestream shopping not only saved their businesses during Covid, it has opened many new and profitable opportunities that continue to this day. Livestreaming is everywhere. At this point, I can only see it getting bigger.
Brandon Rael, Strategy & Operations Transformation Leader
There have been stops and starts to the Livestream shopping phenomenon taking off in the West, particularly the States. While livestreaming is an intrinsic part of the culture in China and other Asian markets, it has yet to shift to high gear for several reasons.
Culturally, consumers in the States are more interested in engaging with immersive commerce-like experiences. This includes going to physical stores, engaging with the brand’s social media channels, and discovering new products in their digital commerce platforms. TikTok has emerged as a force to be reckoned with as a social media and engagement platform to drive social and cultural trends.
However, for livestreaming to take off with any confidence, this requires real-time available to promise inventory capabilities. Within milliseconds, retailers and brands have to be able to deliver and execute against orders from the livestreaming event. This requires technology, infrastructure, agility, robust data, and analytics to deliver on these promises. Otherwise, the livestreaming event will fall flat.
Lisa Goller, B2B Content Strategist
Chinese platforms like Douyin and WeChat are more integrated, making livestream events more centralized and publicized. Now U.S. retail giants are investing more in livestreaming as this marketing tactic gains momentum.
Higher livestream engagement demands that retailers plan for online and store operations to handle quick bursts of high demand.
Gene Detroyer, Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
I am not sure that the demographic that U.S. live streaming will attract is ready to put in the time and planning for a live stream presentation. That is not how they use their social media now.
Carol Spieckerman, President, Spieckerman Retail
Like many advances in retail, livestream shopping doesn’t have to be a universal hit with consumers to make long-term sense. Retailers must set the stage for the future and onboard new generations of consumers. Livestream shopping is very much a part of that future. Comparisons to China may serve as contrast, but shouldn’t be viewed as a global benchmark.
Jenn McMillen, Chief Accelerant at Incendio & Forbes Contributing Writer
Livestream shopping purposely feels like shopping with friends. During pandemic, it became a substitute for live shopping. Will it still have the same hold now that the pandemic is over? It depends on our consumer habits. Is the question really whether to put on real clothes to go out, or put on sweatpants and stay in?
Doug Garnett, President, Protonik
I’ve followed Livestream shopping attempts for 30 years. They haven’t ever worked other than home shopping style direct sales pitches. So, no. We are not suddenly on the cusp of massive growth in livestream.
Each effort has failed because they lack the useful friction of a store or a QVC style sales pitch – a critical opportunity for people who are interested in a product to consider whether they actually want to buy it. They also fail in that there’s not enough information to make a choice.
Time-Warner ran their first in market test in the early 1990s. It failed. QVC attempted it in the late oughts. They failed. The problem, though, has never been technology – but a poor fit with what customers will act on.
Paula Rosenblum, Co-founder, RSR Research
Either I’m too old or too young, but I just don’t see it. Maybe in China, as Neil mentioned, but we have had that system here in lower-tech form for years – QVC, etc. It’s not social enough and I really don’t see it coming down the pike.
Ricardo Belmar, Retail Transformation Thought Leader, Advisor, & Strategist
Live-streaming has been working, if you look at the right sources. During the pandemic it was a lifeline to retailers who were forced to close for a period, and then felt the reduced foot traffic from fewer customers willing to shop in-person. Since then, those retailers haven’t stopped – they’ve been building and refining. However, those retailers have not leveraged their livestreams to find net new customers very effectively. The biggest hurdle to consumer adoption? Finding time to watch livestreams. I now see livestream tech vendors introducing new ways for retailers to leverage livestreams in a more useful on-demand manner, meaning more than just video playback. Consumers that join livestreams often want to interact with the streamer and ask questions. Once you miss the livestream that capability has been lacking, but new AI tools may help here. The other factor has to do with why consumers watch livestreams and whether the content format retailers present is actually what consumers are demanding. If you’re selling photography equipment , for example, you may want livestreams that are
The other factor has to do with why consumers watch livestreams and whether the content format retailers present is actually what consumers are demanding. If you’re selling photography equipment , for example, you may want livestreams that are comparing multiple products in a category at some times, while at other times, you may want to go deep with a popular product and show how consumers can best use it. That educational component can be very important in some product categories where simply offering a sales pitch in a livestream isn’t going to be very motivating for most consumers. Closely coupled to this is the production value of the livestream. Do your customers want to see store associates showing products and educating viewers about those products, or do they want to see a high-end studio QVC-like environment? The answer is that this depends on the brand and the customer profile.
So yes, there is a bit of product-market fit that needs to be resolved, and this will vary by product category and brand. Once these learnings are resolved, we will see live streaming pick up the pace in sales very quickly, especially with younger demographics!
RetailWire is retailing’s premier online discussion forum, serving the industry as a free resource for over 18 years with compelling content that goes well beyond conventional headline reporting. Be sure to bookmark this relevant and helpful site: https://retailwire.com/
If you are not yet a BRA Retail Member, you can easily opt in to either Regular (no cost) or Distinguished ($100/yr.) Membership via this super simple join form