Live selling, which some describe as “QVC on Steroids,” is rapidly emerging as one of the most innovative sales channels in the retail industry today. The technology builds on the proclivity of millennials and Gen Z audiences to live their lives through their smartphones, allowing prospective customers to view items they want on a livestream video presented by their favorite fashion influencer, chat live with them, comment on the merchandise, and purchase it instantly with one-click mobile payments. The result is a far more intimate form of selling than other types of e-commerce — one through which customers get to know, trust and chat with sellers who they admire and are actively following as trend leaders.
However, what may be most significant about live selling and the technical support it has spawned is that it changes the playing field for vendors. It no longer requires a company with billions in assets to avail itself of the advantages of a robust online business. Instead, it democratizes the process of online selling, giving micro and small businesses a platform that in many respects rivals those of their industrial-scale counterparts. It’s already growing rapidly in the United States, with Forbes estimating revenues to reach $11 billion this year and around $25 billion by 2023.
Live selling is not only the domain of small merchants and influencers. The selling format is also being experimented with by such well-established brands as Estee Lauder, Tommy Hilfiger, and Levi Strauss. Furthermore, premier retailers, including Amazon.com, Walmart, and Nordstrom, are looking into it as well. Live selling bridges the gap between online and in-person shopping. Its livestreamed combination of education, entertainment and information makes it a powerful way of engaging a fast-growing digital consumer base.
In China, live selling is already making a big impact on sales, with dozens of full-featured video production studios already supporting the industry. Starting about five years ago, and growing explosively during the pandemic lockdown, China’s live selling phenomenon more than doubled last year. By June 2020, the country had 309 million livestreaming consumers and an army of aspiring video presenters in what the South China Morning Post characterized as cutthroat rivalry for stardom on various live sales platforms. At the same time, its story pointed out that the nation’s big tech firms, with their own assortment of software support offerings, are jostling aggressively to participate in the fast-growing live selling market.
Brandon Kruse, a serial entrepreneur and founder of CommentSold, one of the powerhouse live selling platforms in America, was led down the vision for retail transformation by his wife, Amanda, who was running a small fashion business. The company streamlined all the backend aspects of the business — payments, inventory, shipping, procurement — while building a fabulous front-end custom app which “gamifies” live selling, providing the first turnkey live selling platform for retailers in the U.S. This energized and accelerated sales for many merchants which adopted the CommentSold platform that were able to achieve up to eight times the level of sales, expanding their businesses hugely as the economy moved online during the pandemic lockdowns.
Live selling in the U.S. may have started at a grassroots level, but its adoption was accelerated by a true need to go digital during the pandemic and it's here to stay. The next phase will see a significant adoption and acceleration as major social media influencers jump into the fray, bringing their enormous followings into this form of social shopping. The fantastic thing is that this is a "win-win-win" story. Influencers are able to to monetize their audiences on a much more attributable and direct basis; followers can buy and use items their "idols" are wearing and using; and retailers and brands get a boost in sales due to the habitual and repetitive nature of purchasing this format delivers.
The economic changes resulting from the pandemic, combined with recent advances in online technology, have profoundly — and perhaps permanently — disrupted traditional retail sales patterns. But since the country’s retail market is so large — estimated at $4.4 trillion by the National Retail Federation — the impact of live selling will likely augment, rather than detract from, the rich assortment of business models which will continue to thrive in America’s dynamic retail market space. With its anticipated adoption by major retailers, live selling will soon emerge as a new and distinctive pillar of American retail commerce.
David Erlong is a principal at Permira, an international investment firm. He focuses primarily on investment opportunities in the internet and digital media segment. Gautam Goswami is a principal at Permira, focusing on investment opportunities in the consumer sector.
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Why 'Live Selling' Will Lead the Social Selling Revolution - Total Retail
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