From The Early Days Of QVC To Now: Exploring The Evolution Of Live Shopping
Today, shopping can happen from anywhere; in-store, at home, and on-the-go. It can also occur on any device – laptop, tablet, phones, and yes, also the TV. And that’s all thanks to e-commerce, which completely transformed the retail industry just 20 short years ago. Although we tend to think of the omnichannel shopping experience as being a more recent, modern invention popularized by the internet, smartphones, and social media, the concept of buying from home was actually popularized way before the advent of the world wide web.
In 1977, Lowell W. Paxson, AKA “Bud,” was an AM radio station owner who decided to agreed to settle a debt with one of his advertisers by accepting 112 can openers instead of money. And since Mr. Paxson didn’t have a need for so many can openers, he took to the airwaves to re-sell them to his listeners for $10 a pop. Much to his delight, the concept took off like wildfire and the entire stock was gone in less than three hours – making Mr. Paxson a relatively easy $1,120 in the process.
Bolstered by the success of that campaign, Mr. Paxson quickly realized that you can sell products “without the guise of commercials,” and he officially launched the Home Shopping Club, later renamed the Home Shopping Network, in 1982. By 1990, the channel’s sales reached $1 billion. A number of TV stations quickly developed similar shows and selling models, which encouraged Mr. Paxson to up the ante with celebrity endorsements, easy returns, and quick shipping within 48 hours of purchase. After years of success, the channel was acquired by the QVC television network in 2017 – today’s most standout example of “home shopping.”
What Is QVC?
QVC, short for “Quality Value Convenience,” was launched in 1986 by Joseph Segel, almost one decade after the kick-off can opener event. In starting QVC, Mr. Segel’s goal was to hire more polished hosts than the Home Shopping Network had, and he also planned to give cable providers a percentage of sales – a move that would eventually provide QVC with a higher channel assessment and more paying customers. The company took $7,400 worth of orders on its very first day; fifteen years later, on December 2, 2001, orders hit $80 million. An even more staggering statistic is that despite all the other avenues that modern shoppers can take today, QVC’s 2020 revenue still increased 5% to reach $14.5 billion.
Why Was The “Home Shopping” Concept So Successful?
Before the advent of free-to-air television networks like the Home Shopping Network and QVC, the only way to purchase products was to shop for them in-store during regular hours of operation. But after, Americans could shop freely in the comfort of their own homes, and more importantly, on their own time. QVC credits its long-standing success to the fact that it offers “a highly engaging, highly differentiated shopping experience.” Additionally, for its ability to “connect with customers via authentic stories, interesting personalities, and award-winning customer service.” Whatever the reason, they’re onto something.
The Status Of Live Shopping In 2021
During the COVID-19 pandemic, QVC and HSN both performed strongly. According to USA Today, “revenue ($3.4 billion) and ratings were up 10% from April to June. And online traffic rose 36%.” With more people at home watching TV, that data isn’t all that surprising. However, the popularity of live shopping transcends the stay-at-home orders of 2020, and it’s been on the rise in many countries – particularly China – for years. In fact, the livestream e-commerce industry in China recently completed a 453% three-year growth rate, from $29 billion in 2018 to $129 billion by the end of 2020. On a worldwide scale, the Global Live Streaming Market is expected to reach USD 247,275 Million by 2027, registering a CAGR of 28.1% during the forecast period (2020–2027).
According to CNN, “livestream shopping is a blend of entertainment and e-commerce. Viewers buy goods online from people who show off their latest finds – from lipsticks to laundry detergent – in real-time videos.” And although CNN acknowledges that some people liken livestream shopping to the QVC shopping channel, the effective Chinese model is actually more modern, mobile, and interactive. That said, the overall draw is the same: to buy goods and/or services in real-time from online influencers who feel almost like friends. Of note, the most popular goods to purchase via livestream platforms in China include clothing and apparel (36.49%), cosmetics (36.14%), food (35.79%), daily supplies (30.18%), household decorations (27.02%), consumer electronics (23.51%), and other commodities (15.09%).
The Growth Of Live Shopping On A Global Scale
Beyond China’s borders, live shopping is making notable ground in South Korea and other APAC markets, and it continues to gain speed on a global scale. According to Market Research Future, “more than 67% of consumers globally have streamed live video content, and over 52% of that group preferred free, ad-supported live streaming over subscription-based and à la carte services.” And although the U.S. has been slow to shop via live online video vs. its Eastern counterparts, Bloomberg says that the COVID-19 pandemic sparked a fresh wave of interest: “the U.S. accounts for a tiny sliver of [global sales], less than $1 billion, but after taking off in China and other parts of the world, it’s growing quickly in America, including in apparel, makeup and even booze.” Experts agree the early explosion of live shopping was likely due to an expanding population, escalating urbanization, the adoption of devices, and rapid economic growth. But now, as brands scramble to discover new ways to connect with customers in an increasingly virtual world, the interest and willingness to try live shopping solutions has grown.
Where Does The United States Stand Now?
Humans crave connection – it’s a core need among friends, families, and brands that we buy from. To satisfy that need, 2020 forced brands to get creative with how they serve buyers, and to expand the human connection beyond physical proximity. Enter, virtual appointments and live representatives – a new way to communicate with company experts from home. Despite being popularized from necessity, experts predict that virtual appointments and live representatives are two tech-savvy services that will see long-term adoption. In fact, when asked to rate their level of satisfaction related to live video chat, 73% of consumers said they were happy with that channel vs. just 61% for email and 44% for phone.
When you consider that virtual appointments and live representatives are major factors in live shopping, it makes sense that U.S. consumers expanded their acceptance of live shopping during the pandemic. Traditionally, poor customer service has been a turnoff for online shoppers, especially since email exchanges and auto chat bots require people to wait for problems to be solved. But with virtual appointments and live representatives, shoppers can get the best of both worlds – the comfort of shopping from home AND the experience of real-time service. By acclimating shoppers in the United States to the modern convenience of virtual appointments and live representatives, the concept of live shopping no longer seems out-of-the-ordinary.
Two Examples Of Companies That Are Leading The Way
- Best Buy
Best Buy is well-known in the industry for its down-to-earth “Geek Squad” agents, who are available at a moment’s notice to come fix technology issues or help set up new systems in your home. However, since the desire for face-to-face interactions went out the window in the early days of COVID-19, Best Buy pivoted its plans to launch new ways for its customers to connect with technology experts: virtual appointments and a “we’ll call you” button on its website. Now, customers can easily connect with Best Buy agents by scheduling a virtual appointment via video or phone, or they can still schedule a traditional in-store or at-home appointment if they feel so inclined. With its live shopping solutions, Best Buy is all about making the buying journey as easy as possible, whenever and wherever that may be.
Another company that’s doing live shopping “right” is Macy’s with their “Chat With A Stylist” feature, which allows shoppers to get expert advice online or in-store for their wardrobe, home, and more. All a shopper needs to do is make an appointment, and then message back and forth with their personal stylist to provide information about what they’re looking for, whether that be “a statement look for that big meeting or the perfect gift to new décor for your space.” Macy’s also offers an incentive to first-time bookers in the form of a 20% off coupon, valid for finds from the first appointment. Another bonus to Macy’s Personal Stylist program is that it allows the traditional brick-and-mortar retailer to better compete with online-only, subscription-style boxes like Stitch Fix and Trunk Club.
So, What’s Next For Live Shopping?
Not every brand has the time, resources, or talent to adopt and implement a live shopping strategy overnight. That’s why some third-party solution providers like BDS are developing independent apps that allow any brand, anywhere, to take advantage of the benefits of live shopping. One technology is called Tap-A-Tech, which aims to replicate the traditional shopping experience via video with a simple tap of a screen. According to a press release, “shoppers can quickly connect to a knowledgeable brand expert by scanning a QR code affixed to product packaging or on an in-store display.” It’s estimated that 72% of customers have switched brands due to lack of personalized experience, so new developments like Tap-A-Tech are helping to improve customer service while also acknowledging the popularity of live shopping.
Beyond Tap-A-Tech, large-scale virtual events will be key to propel the live shopping movement forward. Unsurprisingly, China is also blazing that trail. China’s Singles Day or Double 11, is an unofficial holiday that gives single people the “excuse” to treat themselves to presents. According to Investopedia, “China’s Singles’ Day is by far the biggest day for internet commerce, easily surpassing the combined sales of both Black Friday and Cyber Monday.” Stateside, a new event is gaining momentum – “Hauliday.” According to Cosmopolitan, “it’s an exclusive 48-hour shopping event featuring amazing deals and discounts with Klarna’s impressive list of retail partners.” To make the experience even more extraordinary, Cosmopolitan partnered with ShopShops, a livestream app, so people can make purchases in real time “to give a virtual—i.e., as close to IRL—look at some of the discounted products.”
Live Shopping Will Define The 2021 E-Commerce Experience
Just like e-commerce transformed the retail industry 20-some years ago, live shopping is transforming the e-commerce industry today. And although live shopping looks a little different than it did back in 1982, the goal to create an unforgettable omnichannel experience that transcends brick-and-mortar retail remains unchanged. Not to mention, today’s version of live shopping isn’t limited to the TV. Social media apps like TikTok and Instagram are changing how brands connect with buyers; customer service solutions like Tap-A-Tech are enhancing the online shopping experience; and large-scale virtual events are helping to normalize live shopping in the media. If you need help developing your 2021 live shopping strategy, BDS can help. Not only did we pioneer the industry with the development of our Tap-A-Tech solution, but we have a whole hive of services that will take your sales strategy to the next level and beyond. If you’re ready to get started, contact us today: 800.234.4237.