Brand marketers have known for years that video — rich and interactive — is the medium most likely to successfully engage consumers, and in 2020 the need to act on this knowledge became critical. As shopping habits have shifted toward e-commerce in historic ways, brands have been under tremendous pressure to go beyond the status quo and find every competitive edge in driving engagement and conversions through video commerce. (See Dhillon’s previous article for VIP, on the genesis of video commerce and how it has revolutionized retail.)
But even with continued innovation at home and abroad, including the rise of China’s interactive e-commerce platform Pinduoduo and livestreaming gaming app Twitch, it has been difficult for even the most savvy brands to navigate the video commerce landscape to craft a meaningful strategy that captures the hearts and minds of their loyal customers. And now the time is ripe for a deep dive into the infrastructure that would precipitate such a strategy.
Livestreaming and Influencers Dominate Content Platforms
The first stop for brands looking to build a video presence is, not surprisingly, any content platform that promotes video relevant to millions of users worldwide and able to be shared virally. TikTok, while the well-acknowledged poster child for effective video usage, still takes steps to bolster its e-commerce capabilities, including recently forging a partnership with Shopify to allow merchants to manage their TikTok campaigns directly from within Shopify.
Traditional social media platforms have also begun to lean in. Instagram recently launched its own embedded video commerce experiences that allow consumers to purchase products in-app from livestreaming sellers. Keeping eyeballs and customers on one’s site has always been the name of the game, so reducing friction to making a purchase then and there is of utmost importance.
TikTok and Instagram get that, of course, but expect to see similar offerings rolled out on many major platforms. In 2017, Amazon launched a program for influencers to earn commission on sales of its products across Facebook, Twitter and YouTube. More recently, the company launched an in-house livestream platform so influencers can show streams of their favorite products directly on the Amazon site.
While the platform has allowed Amazon to dip its toes into livestreaming waters, the coveted stylistas are often first-time livestreamers, and so their QVC-esque promotions for food, fitness and beauty have yet to reach anywhere close to the popularity of Alibaba’s one-stop dedicated livestreaming channel, Taobao Live, in China.
In July 2020, Google’s in-house startup incubator Area 120, in reactionary fashion to TikTok, launched the mobile-only Shoploop, which allows users to discover new beauty and fashion products by scrolling through 90-second videos from creators. Two months later, The Lobby, an early-stage venture backed by First Round Capital debuted a similar video–centric marketplace, with over 30 boutique brands selling products through short videos created by the U.S.’ most fashion-forward new-generation influencers, including Portland, Oregon-based Claire Most and Miami‘s Gemary Ermus.
Platforms such as these that leverage short-form video to drive commerce are prime real estate for targeting Gen Z consumers. With close to 70% of Tik Tok users in the 13-24 age range, influencer-driven commerce can not only push the latest in affordable fashion and beauty but help brands test the young crowd’s response to up–and–coming product lines in real time.
Still, these large-scale platforms are inherently noisy, and any organic content will be competing for attention against both traditional social chatter and paid advertising. The brands that differentiate themselves on these platforms will have to rely heavily on content creators — particularly micro-influencers, with a smaller but growing following — who can be trusted to penetrate niche demographics while staying on message.
With a varied network of influencers, brands can begin to look beyond the well-established social media platforms. Nike, Adidas and other top-shelf shoe brands collaborate with NTWRK, self-dubbed the “QVC for Gen Z,” to drop limited–edition sneakers on in-app live shows hosted by the likes of DJ Khaled, Billie Eilish and more. By leveraging influencer partnerships and these next-generation live commerce platforms, labels are creating opportunities to “super-serve [their] super-fans” and strengthen a cult-like loyalty in the brand community.
The recent acquisition of streetwear hype brand Supreme for $2.1 billion by VF Corporation, the fashion conglomerate that owns marquee names Dickies, Timberland and The North Face, only reinforces the theory that these exclusive “drop-centric” brands are etching their place and rapidly becoming a Wall Street-respected driver of enterprise value.
But make no mistake, the influencers companies work with need not be celebrities or entertainment icons, nor do the brands themselves need to be household names. Popshop Live, also a self-dubbed “reimagined QVC” and an investment of VC firm Benchmark, places mom-and-pop social sellers right alongside large brands when it comes to livestream selling.
JapanLA, a purveyor of the country’s “kawaii” — or cute — pop-culture characters, was a relatively unknown boutique that quickly became one of Popshop’s highest-grossing stores, recording some $17,000 in sales and 1,500 checkouts in one show alone.
And it’s not just style and beauty that connect. In China, Pinduoduo worked with over 67,000 farmers during COVID-19 to sell 1,500 metric tons of produce through livestream, broadening farmers’ reach beyond the local to forge a large-scale, albeit virtual, agricultural community. In fact, even traditional e-commerce marketplaces have begun forging influencer partnerships and evolving to incorporate livestreamed video shopping. Alibaba is seeking to recruit over 100,000 influencers to create livestream content promoting thousands of brands on AliExpress, helping to propel its current China-centric focus into the international sphere.
The breakout success of brands with livestream commerce begs two questions: Can these dynamic experiences be created without going through large third-party apps, and can e-commerce sites of the future be interactive and video driven?
The E-Commerce Website Gets a Refresh
The past year has seen an emergence of tools that allow the easy embedding of video or livestreaming content onto e-commerce destinations. What they promise is not only more interactivity and greater reach but an increase in the key metrics of e-commerce — clickthrough rates and sales. Tools such as Vop allow global brand websites to embed influencer or brand-native TikToks side by side with product content, thus serving as a commerce link between social media and traditionally static e-commerce sites.
Platforms such as Livescale, which aims to make the livestreamed shopping experience “frictionless,” help bring stalwarts such as Lancôme into the digital social age, creating gamified, in-website shopping events to serve up new products to a broader, younger audience more accustomed to social media than online lookbooks. The makeup giant hosted a variety of hour-long live product demos in English, French and Mandarin, yielding over 1,500 new customers to date — and an ROI of over 160%.
There are a host of Livescale-esque tools ready for brand use, with H&M “storytelling” brand Monki collaborating with Bambuser, a white-label solution and one of the first public companies focused on providing livestream video solutions to retailers. Buywith, which has worked with beauty brands such as Bobbi Brown and MAC, takes a cue from gaming’s livestream model — i.e., Twitch — and lets shoppers screen-share and chat with influencers throughout the purchasing process.
As Bambuser CEO Maryam Ghahremani told Vogue last year, “Retailers have a lot of untapped potential when it comes to converting their brand awareness and large followings into engagement and sales if they focus on building relationships directly with their audience.”
With consumer behavior shifting toward e-commerce in unprecedented ways, brands are scrambling to find unique strategies to satisfy loyal customers while broadening their reach. The old-school roots remain, but it’s the technology of the 2020s that allows retailers to rise above today’s information overload and forge deeper relationships with consumers who value brand authenticity above all else.
Sunny Dhillon is a founder of the VC fund Signia Venture Partners, which is backed by L.A. movie studios, Asian entertainment companies and the Smithsonian, among others, and focuses on consumer interactive entertainment and e-commerce technology startups. He was voted one of the Wall Street Journal’s Rising Stars in Venture Capital and often makes LinkedIn’s annual Top Voices in Venture Capital. Don’t miss Dhillon’s first piece for VIP, assessing the growth of video commerce.
Special thanks to Signia’s Kevin Wu for co-authoring this article.