Adding live shopping to the retail mix
As I listened to news updates over the weekend, a topic popped up that I hadn’t paid much attention to in a while - Live shopping. Could it disrupt online marketplaces such as Amazon?
China embraced this style of e-commerce early beginning around 2016 through events such as Alibaba’s annual Singles Day event.
In 2019, 37% of online shoppers in China made purchases on live streams.
Here in the US, it took the COVID-19 pandemic for live shopping to really jump into high gear.
A number of retailers turned to live shopping while consumers spent more time at homes because of the pandemic. According to TechCrunch, Walmart began live-streaming shopping events on TikTok last year. Amazon released a live platform where influencers promote items and chat with customers. Instagram launched a Shop feature that encourages users to browse and buy within the app. Facebook also kicked off Live Shopping Fridays for the beauty and fashion categories.
But it seems to be the old-school shopping television channels that are taking a big bite out of the live shopping market. Remember HSN and QVC? These two shopping television channels, dating back to 1982 and 19886 respectively, have come a long way since their early days. Owned by Qurate Retail Group, investments in technology, supply chain networks, and relationship building with brands have been made resulting in total revenue for the Group increasing 5.3% in 2020 to $14.2 billion.
Consumers have embraced this style of shopping as a combination of entertainment, interaction, and convenience.
According to Coresight Research, estimated sales from live-streaming shopping events were $5.6 billion in 2020. By 2023, sales estimates are expected to climb to $26 billion.
The ‘Amazon’ of Live Shopping - QVC
QVC sells to 218 million worldwide households each day through its websites, multichannel video programming distributors such as Hulu +, Live TV, AT&T TV, and YouTube TV; streaming video on Facebook Live, Roku, Apple TV, and Amazon Fire; its mobile apps, social media pages, and over-the-air broadcasters according to its annual report.
It purchases or obtains on consignment, products direct from manufacturers and wholesalers based upon the volume of order transactions and operates fifteen distribution centers and eight call centers worldwide. In 2020, it shipped about 239 million units globally.
However, like any business, it too has been impacted by supply chain issues. But, the issues have had a slightly different impact as noted by the group’s second-quarter earnings call.
President and CEO of Qurate Retail Group, Mike George, told investors on Aug 6, “as a business that focuses on a handful of items a day, we're uniquely impacted when key items aren't available for their air date. For example, nearly 30% of our TSVs (Today’s Special Values) in the quarter were impacted by supply issues. Our teams are continuously adjusting our programming calendars in response.”
In addition, George noted, “High industry demand for certain home and electronics products, coupled with chip shortages, means that in many cases we're either unable to get sufficient quantities of key items or unable to provide a compelling offer on the day.”
Reducing the returns
During a live stream, shoppers are usually able to ask questions and see various sizes and colors in real-time. That means shoppers are more likely to keep what they buy, Coresight Research founder and CEO Deborah Weinswig told CNBC in May.
“Returns are 50% lower when items are bought in a live stream,” Weinswig said.
Disrupt online marketplaces?
Nope. But, a New York Times article title describes it perfectly - “Livestreaming, Still Niche, Grows as a Tool for Retailers”. A tool. Retailers are selling across a growing number of channels such as live shopping to reach consumers that are embracing shopping options (store, social, live, website, mobile, pop-up etc.) based on convenience, product availability, and price.
Retail supply chains need to support all of these options, seamlessly via the right technology tools. Understanding and analyzing data will play an important role in forecasting inventories, inventory placement, marketing spend, operations, transportation management, and more for each channel.
Retailers will also need to understand the uniqueness of each channel and build in just-in-case measures.
In other words, retailers need to be rethinking their supply chains on a regular, ongoing basis being mindful of emerging trends and competitive threats.
-Cathy
That’s about it for now. Thanks for reading. While I aim for a weekly story, sometimes life gets in the way, so think about subscribing (free) so that you don’t miss anything.
For daily thoughts and shares, be sure to follow me on Twitter and LinkedIn. Besides running a logistics market research firm, catch my weekly articles on air cargo, freight forwarding, the express markets, and a monthly podcast on Air Cargo World. I also help out the great folks at the Journal of Commerce as an analyst.
Recent articles:
The Middle Mile Meets the Last Mile, Parcel Magazine (pg 32)
USPS losing its differentiation, Air Cargo World