We’re Going Live: How Livestream Shopping Can Work For Your DTC Business

We’re Going Live: How Livestream Shopping Can Work For Your DTC Business

Last Updated:  
June 6, 2023

Direct-to-Consumer (DTC) businesses have always looked for unique ways to reach their customers, whether through QVC features, infomercials, or live demos in physical stores. But the places you can reach your ideal customers have changed, especially in the last decade. Traditional media like commercials on cable television used to work (very well), but a switch in US homes away from cable and towards utilizing streaming services, a phenomenon known as ‘cord-cutting’, has meant a severe decline in viewers you can serve ads to. According to Pew Research, the number of Americans who say they watch television via cable or satellite has plunged from 76% in 2015 to 56% in 2021. Depending on the demographic you’re targeting, the available viewers might be even smaller: only 34% of Americans aged 18-29 now get their TV through cable or satellite. The most basic marketing advice pillar is ‘go where your customers are’, and these days, they’re on social media. Whether it’s Facebook, Instagram, or TikTok, meeting your customers online is the right way to do it. Livestream shopping is just the next way to create a memorable shopping experience! 

What is livestream shopping?

Image from Freepik

In the simplest of terms, it’s a combination of streaming live with the ability for viewers to make a purchase. It was first introduced in China in 2016, when Alibaba ran it as a promotion for Singles Day. It grew steadily in China until it exploded in 2019, and in 2022 it was projected to rake in $480 billion in revenue. It didn’t really take off in the US until we had a big reason to stop going to physical stores (hello, COVID-19 pandemic), but since 2020 livestream shopping has the potential to account for $25 billion dollars in revenue in 2023. Some might think that livestream shopping is a passing fad spurned by the pandemic, but many companies continue to find success. In this article, I’ll outline some success stories and provide some advice for setting up streams that convert your viewers into customers. 

Why does livestream shopping maximize conversion rates so well?

You’re watching a live stream and one of your favorite influencers is talking about how much they love a certain product. They show you how to use it and how to style it, and you immediately think: wow, I’d really like that. And then they say: “we’ve only got ten in stock, so act quick!” What is it about this scenario that makes impulse buying so likely, and thus makes livestream shopping super successful?

Basically, the merchants running these events just know how to manipulate some human impulses to get the desired result of more sales. Some research studies have aimed to investigate customer behavior using the Stimulus-Organism-Response theory, which in basic terms means a stimulus is what triggers a response (for example, you’re hungry, so you go eat some food). In this case, the livestream itself is the stimulus generating all the feels in the customer. And feels are what trigger the response (BUY IT NOW) the merchant is hoping for. 

A few psychological terms for what emotions might drive a purchase “response” are: 

  1. Social contagion: If everyone else bought this cool new product, why aren’t you? It’s the peer pressure, man! It reminds me of my grandma and her sister who used to have nearly identical kitchens, right down to the glassware. Were those really the best items, or did they just want to purchase similar things? Besides family, we can be influenced when we’re participating in group scenarios because we just want to be included. It’s Humanity 101.
  2. Parasocial interaction: this is that feeling of intimacy developed unilaterally by the public for a celebrity or influencer, like how everyone in America (or maybe, the entire planet?) really just loves Tom Hanks. If Tom Hanks was selling a product on a livestream, you better believe it’s selling out. You might not be able to afford a Tom Hanks endorsement deal, but tons of influencers with followings are making bank with collabs that use parasocial interaction to achieve lots of sales.
  3. Vicarious experience: If everyone else is having fun buying on a livestream, I want to do it, too! I totally experienced this while watching some gemstone sales during the pandemic; I have so many crystals I didn’t need. I bought them because it was fun and I’m impulsive. And now they’re just sitting there, evidence of a dopamine rush. 
  4. Scarcity persuasion: When you’re continually informed that there’s a limited quantity or only so many pieces remain, you’re in a scarcity persuasion situation. The customer is made to feel like if they don’t make the purchase, they’ll regret it later (serious FOMO). 
  5. Price perception: it’s all about the perceived value of a product. Like how an influencer can convince an audience that they definitely need to buy a specific product. It’s how Kylie Jenner can successfully sell lip gloss to her followers when near-identical formulations are on the market for a lower cost. The product itself doesn’t matter as much as the person behind the brand. 

In short, there are tons of reasons why livestream shopping can work so well, especially with an influencer involved. But some products do better than others in this type of sales environment. Some product categories that do exceptionally well in the live commerce space include fashion, beauty, fitness, and home decor. Depending on your product category, you’ll also have to consider which platform is best for hosting your live sales. 

Image from Freepik

Where to host your live sales

There’s no shortage of places to sell! The key is to go where your customers are. Some options include: 

  1. Facebook Live: Facebook gives a business the ability to go live within their Facebook Business Page, so existing followers are notified. They also allow you to promote the event itself ahead of time to ensure your customers know when it’s happening. While streaming, the chat feature is enabled so customers can chat amongst themselves as well as engage directly with you!
  2. TikTok Shopping: It’s easy to find more than a few customers on TikTok, a platform with over one billion monthly active users. Popular with younger audiences, the format allows for creativity and engagement, with music, filters, and special effects to feature your products. Ash breaks down the best way to run ads on Tiktok in this article
  3. Instagram Live: Even though Instagram is Facebook’s little sister, the audience is different, which means the stream has to be different. Much like Facebook, however, the ability to link your Shopify store’s data to your Instagram makes it very easy to remove barriers to purchase for your customers, so they can go from stream to cart quickly. 
  4. Twitch: While originally focused on streaming for video games, Twitch has a large community of active users, and many streamers are integrating shopping content into their live events.

How to be successful at livestream shopping

You know why it works, you know where to do it, now I’ll give you the how! It’s important to consider the following important details when planning a livestream shopping event or series of events to sell your products.

  1. Use the right equipment: There’s nothing worse than tuning into a livestream that’s got terrible lighting or you can’t even see the product! This article breaks it down nicely, but basically you’ll need: a quality camera, great lighting, a microphone, and a steady tripod. Make your video easy to watch without quality issues or distractions, and you’re past step 1! 
  2. Promote the event: Very few sellers can start a live stream and expect people to just organically show up. You can promote your livestream event several weeks ahead of time, or set up a schedule so people know when to expect you’ll go live (for example, Mondays at 8pm EST). Use ads on social platforms to circulate the information and have customers sign up for reminders on Instagram stories. Promote it widely to drum up interest so that you’ll have excited potential buyers tuning in when you go live. 
  3. Get the products ready: Make sure whichever way you plan to sell, your product pages are ready to go! Quality photos and accurate descriptions are important. Make it easy to buy, and quick. 
  4. Demo the product: Remember why infomercials and QVC are so successful? If it’s a piece of clothing or jewelry, wear it. A product that does something? Show me. Use the live format to your advantage and display what people need to know while quickly explaining the product benefits. Show and tell, quite literally. 
  5. Make it entertaining: Be fully aware that individuals scroll through and watch videos on social media to be entertained first. Make sure you have a host that presents a fun and engaging experience. 
  6. Forge personal connections: Be relatable! In today’s environment, consumers like to know the ‘who’ behind a brand. They want to know the brand’s values before making a purchase, because when presented with so many competitive products, similar values can be what sets your business apart.
  7. Track your results: If you’re looking at attribution and it doesn’t make sense, maybe take a look at Triple Pixel. It amalgamates your data across channels, so you can test out new channels, like livestream events, and understand where your sales are coming from! 

Go live and conquer

Now that you’ve learned all about livestream shopping, there’s no limit to where you can go next! The key thing to remember is beyond being generally entertaining, your livestream should play on the psychological reasons someone might want to make a purchase to really drive that behavior. From Facebook and Instagram to TikTok, Twitch, and other dedicated online sales platforms, this livestream shopping trend is here to stay, and it’s time to put your brand’s personal spin on going live.

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