Technically, live video shopping is nothing new: Viewers in the U.S. have been dialing in to purchase from television merchants like QVC and HSN for decades.
Livestream e-commerce, however — its newer, digital-economy cousin — is a burgeoning multibillion-dollar industry in China with millions of viewers, made all the more mainstream by the COVID-19 pandemic. Nevertheless, it hasn’t seemed to catch on with the American e-commerce generation.
Brian Wiegand, founder and CEO of video shopping app Spin Live, thinks that’s about to change. He believes the target customer for whom the fusion of shopping and entertainment strikes a powerful chord exists among millennials and Gen Z — they just haven’t had the right app yet.
After just four months online, Wiegand says Spin Live is signing up between 20 to 40 new brands and retailers each day, fueling a 45% weekly, live merchant growth rate. This comes amid its recent partnership with Shopify, the $61 billion e-commerce platform for small businesses and buzzy startups like Allbirds to legacy brands such as Staples. Shopify’s payment platform now offers a plug-and-play solution for members of its million-merchant network to integrate with Spin Live.
As Wiegand sees it, just as TikTok and Twitch have stoked the rise of music and gaming, respectively, video can do the same for shopping. “There should be a dedicated social network for shopping,” Wiegand told CO—. “The world is filled with people that have product passions, so we're trying to aggregate them and create a new type of shopping influencers.”
You need to find new ways to interact with consumers. I think that they’re looking for more discovery-oriented experiences.
Brian Wiegand, founder and CEO, Spin Live
Livestream shopping’s post-pandemic opportunity
Apps like Spin Live aim to capture the interest of a post-pandemic consumer who is buying more online and spending more time than ever on social media. This new approach to “shoppertainment” has the possibility to drive not just higher engagement, but higher sales: According to internal data, Spin Live has a 26% conversion rate, much higher than the 2% to 3% estimated conversion rate for e-commerce overall.
“I think much of what we're seeing as a result of the pandemic is just an acceleration of behaviors that hadn't yet reached mainstream adoption,” said Scott Lachut, president of research and strategy with business intelligence and innovation firm PSFK.
Convenient and experiential digital shopping tools are all the more relevant in times of heightened uncertainty and concern for personal safety, he said.
Comparing the U.S. to China, Wiegand says the latter nation, having already navigated a pandemic, was a major factor in that country’s embrace of e-commerce and shopping technology. In 2003, the SARS outbreak powered the rise of Alibaba’s Taobao and JD.com, now two of China’s largest retail superpowers.
And just as we’re increasingly conducting our lives online, businesses are increasingly tapping video and livestreaming as a sales and marketing tool. Amazon, for example, announced in September that it’s adding livestreamed shopping, tours and classes via a new platform called Explore, following Facebook and Instagram’s move to launch live shopping features in August.
The trend is poised to grow, Wiegand said. “With mobile and now even with 5G coming,” he said, “I think live and interactive experiences are going to dramatically change our experience in a number of different industries.”
Building a new kind of social network via merchants and influencers
Like any other social platform, the success of Spin Live depends on the power of its network effect. However, unlike Facebook or Instagram,which depend more on a growing number of individual users than the number of brands signed up, the livestream site has to build and maintain a balance of participating merchants, influencers and individual watchers as the platform grows.
According to Wiegand, this marketplace approach is Spin Live’s differentiating factor from other apps experimenting with livestreaming or shoppable video. Here’s how it works: Merchants pay Spin Live a fee to list their products on a back-end site where influencers then choose which brands to work with and what specific products they want to sample.
It’s important to note that the definition of “influencers” here is intentionally loose. Rather than pursue major social media celebrities like Kim Kardashian, the app lets everyday users with over 1,000 Instagram followers join its affiliate program. The goal is to have these users leverage their own sales and social marketing skills to become major influencers within the Spin app itself.
Once the influencer receives and tests the products, they go live on the app to conduct a review or demo, where customers watching can purchase on the spot, without leaving the app. The new Shopify partnership means participating brands, which thus far include Omnie Beauty, Good Jane and Field Botanicals, can connect their products to the Spin Live app and collect payment with a single click.
With a target audience of women ages 18 to 40, main categories of focus for now include beauty, wellness, home, fitness and apparel.
Capturing consumer interest with in-the-moment ‘shoppertainment’
Wiegand makes a distinction between the acts of “buying” and “shopping.” Amazon, for example, is an intent-based buying experience, where a customer comes looking for a specific item or brand and is able to purchase or repurchase simply and quickly.
Shopping, on the other hand, takes into account the spontaneous thrill of something catching your eye as you’re walking by a store, or happening upon someone wearing something you like as you scroll through Instagram. “You need to find new ways to interact with consumers,” he says. “I think that they’re looking for more discovery-oriented experiences.”
However, despite the entertainment value of livestream shopping, catching and converting a consumer at just the right moment can be a challenging proposition. “I feel like the appointment-based nature of 'live' shopping and the limited range of products being sold during a session make it feel less convenient,” PSFK’s Lachut said. “Let's remember we have an audience who is used to doing things on-demand on their own terms.”
Wiegand agrees, and has accounted for this in the design of the app. Like TikTok, the app is largely discovery-based. Users can sign up for notifications when an influencer they like is going live, but otherwise simply swipe through an algorithmically curated stream of videos, where some are currently live, some are saved from previous livestreams, and all are shoppable.
In our age of continued social distancing, generating that thrill of spontaneous discovery could just be what Spin Live needs to tip the scales to benefit long-term from the emerging livestream video market.
After all, Lachut said, “Investments in better customer experience and operational excellence will always remain relevant.”
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