Livestream shopping: advertising’s new frontier?

The Future. Livestream shopping — where influencers advertise products in real-time on social media — is taking off. The new means of advertising benefits from strong global engagement with streaming platforms and offers unique perks for brands. If widespread adoption continues, it just might usher in a new era of personalized marketing.

Feeding demand
The new marketing tactic has several advantages over other ad channels.

• Livestream shopping is especially useful for customers looking to purchase products that require tutorials, such as makeup, or items whose value depends on appearances, like fashion and food.

• It also appeals to coveted Gen Z shoppers — 47% of US and UK consumers who made livestream purchases last year belonged to Gen Z.

• Finally, certain kinds of offers work particularly well in livestream shopping, like exclusive or limited-time offers. Firms that used either reported conversion rates near 30% — 10x those of typical e-commerce methods.

The struggle is real
The popularity of livestream shopping is growing fast, with the 2022 market reaching nearly half a trillion dollars in China alone. The 2022 US market was a much smaller $20 billion, but that number is expected to more than triple in the next three years.

The only catches are that live-streamed content is a.) hard to moderate and b.) subject to authenticity concerns. Brands can make real profits, but only if their influencers are just real enough.