Amazon Takes Tip From TikTok with Beta Test of Shoppable Videos | Shopify and YouTube launch YouTube Shopping | Shein points arrows at Europe
Amazon Takes Tip From TikTok with Beta Test of Shoppable Videos
Watch out, TikTok. Amazon is pushing into your territory. As reported by The Wall Street Journal on Wednesday Aug. 17th, the retail and tech giant is testing a feature in its mobile app that would show shoppers shareable, TikTok-style photos and video feeds of products. Right now, the feature is currently available only to a small number of employees the paper said, citing someone familiar with the beta.
Reportedly codenamed “Inspire,” Amazon’s internal beta test is the latest nod to the selling power of short-form video, now also being pursued by Google and Meta’s family of apps, including Instagram and Facebook.
The lure of short-form videos to influence consumers and move merchandise is one of the hottest topics in eCommerce, and all platforms are evaluating it for good reason.
In the study Benchmarking The World's Digital Transformation, a PYMNTS and Stripe collaboration based on surveys of over 15,100 consumers in 11 countries, “activities built for digital are capturing a high level of consumer engagement, with video streaming and social media activities among the two top-ranking of all those we studied,” with 61% and 56% of the populations across the 11 countries we studied engaging in those activities — 31% and 25%, respectively, on a daily basis.
The hat trick of discovery, engagement and purchase is the ultimate goal of these various tests, with U.S. social and eCommerce sites trying to replicate TikTok’s sales success in Asia.
The Livestreaming Wars.
Amazon is already using video to some extent. According to the Journal story, “The retailer posts live videos from creators on its website, who promote items available for purchase. It has attempted to court elite social-media users to its influencer program, which allows creators to build personalized pages on Amazon and earn money when followers make purchases through customized links.”
At present, Alphabet’s YouTube is the most commanding platform for short-form video consumption among younger demographics in the U.S. In an August blog post, Pew Research said a new survey “of American teenagers ages 13 to 17 finds TikTok has rocketed in popularity since its North American debut several years ago and now is a top social media platform for teens among the platforms covered in this survey. Some 67% of teens say they ever use TikTok, with 16% of all teens saying they use it almost constantly.”
However, Pew added that “YouTube tops the 2022 teen online landscape among the platforms covered in the Center’s new survey, as it is used by 95% of teens. TikTok is next on the list of platforms that were asked about in this survey (67%), followed by Instagram and Snapchat, which are both used by about six-in-ten teens. After those platforms come Facebook with 32% and smaller shares who use Twitter, Twitch, WhatsApp, Reddit and Tumblr.”
Ironically, TikTok is backing off plans for livestream shopping in the U.S. and UK. According to a July Financial Times story, “TikTok had planned to launch the feature in Germany, France, Italy and Spain in the first half of this year, before expanding into the US later in 2022, according to several people briefed on the matter. But the expansion plans have been dropped after the UK project failed to meet targets and influencers dropped out of the scheme, three people said.”
In an interview with PYMNTS’ Karen Webster, Pinterest senior vice president and head of engineering Jeremy King talked up video plans, saying “Once they discover, they want to be able to make that transaction happen — we call it inspiration to action. The action part is what we’ve been working on in the last couple years.”
Tambo's View: Amazon product recommendations are extremely popular on TikTok and the tag #amazonfinds currently has 25.6 billion views. Some influencers have gained millions of followers solely by finding interesting Amazon products to recommend to their audience. So, it makes sense that Amazon wants its customers to find these products natively on its app rather than through TikTok. However, whether or not a broad roll-out of Amazon's shoppable videos could take place -and in which markets- is still uncertain and depends primarily on the evaluations of the testers and their feedback.
Shopify and YouTube launch YouTube Shopping
Ecommerce software Shopify and online video streaming platform YouTube are launching YouTube Shopping. The feature offers multiple options for live shopping, where users can purchase products directly on YouTube’s website.
Shopify gained a lot of new users during the pandemic and has been moving into the influencer market recently. Live shopping, where users shop during a video live stream, is mostly popular in Asia. In Europe it has not been widely adopted yet.
Available worldwide this week.
With YouTube Shopping, users can purchase products from Shopify merchants while watching a video or live stream on YouTube. The entire payment process will also take place through the video streaming platform. As of this week, the feature is available worldwide. To use it, merchants will need a minimum of 1000 subscribers.
Retailers can tag products in a live stream or show a list of products under videos. They can manage which products are featured through the ‘Shopping’ label in YouTube studio. Creators can also add a ‘Store’ tab on their YouTube channel.
All product information such as name, price and inventory is synced with your catalog on Shopify. If a product is out of stock, for example, it also disappears from YouTube.
Shopify continues influencer strategy.
Shopify has been focussing on the influencer market recently. In spring of this year, the software company acquired influencer marketing startup Dovetale and launched its own creator linking tool.
“Commerce today is multichannel, and YouTube is one of the most influential channels on the planet,” says Vice President of Product Kaz Nejatian from Shopify. “Shopify’s new YouTube integration will fundamentally change what opportunity looks like for independent brands in the creator economy.”
Live shopping not popular in Europe yet. Although live shopping has been taking off in Asia, in Europe it is not very popular yet. According to a survey in the Netherlands, only 13 percent of consumers participated in live shopping in the past year.
YouTube currently houses over 2 billion monthly users. Competitor TikTok, which is surpassing YouTube in popularity and watchtime, launched their own live shopping tool in Europe late last year. Last month, though, the company pulled their Western launch after disappointing results. An employee told the Financial Times: “The market just isn’t there yet.”
Tambo’s View: This partnership benefits both the creators and YouTube as it keeps users onsite due to the seamless shopping experience it offers. What's more, there is a high level of trust between viewers and YouTube creators which has been built over time, and that unique relationship will allow for low-risk, informed purchases by the viewers. Although live shopping is not yet popular in Europe, it will be interesting to see if there will be a higher uptake via the YouTube platform.
Shein points arrows at Europe
Chinese fashion retailer Shein is looking to expand in Europe. At the same time, the company’s value has fallen around 30 percent as it has been under scrutiny about its labor conditions and environmental impact.
Shein, founded in 2008 in China, is known for offering fashion at very low prices. The company grew incredibly fast, with sales going from 50 billion dollars in 2012 to 10,000 million in 2020. In that year, Shein grew by a staggering 250 percent.
Aiming for Europe.
The Chinese retailer ships across 220 countries worldwide, with most customers in India and the United States. Now, Shein is pointing its arrows at Europe. Shein recently opened European pop-up stores in Madrid and Barcelona for click-and-collect. The company has set up temporary shops in London and Paris before.
Moreover, the company appointed Jacobo García Mi?a as European director of business development, Moda.es reported. Garcia is based in Dublin and formerly worked for H&M and Zara as well as Burberry and Salesforce. The director is meant to build relationships with European companies and improve Shein’s image in Europe.
30% valuation drop
Shein’s concerns with its image are not unjustified. After its fast-paced growth in the past few years, the third most valuable startup in the world is facing a 30 percent valuation drop. In the run-up to an IPO, investors are now looking to sell their shares. More companies in the tech and ecommerce industry have seen lower valuations due to global economic uncertainty.
Shein under criticism
In addition, Shein has been involved in numerous controversies concerning copyright, labor conditions and environmental impact. Shein has also been criticized for a lack of transparency in these areas.
Most recently, TikTok videos on Shein went viral showing brand labels with the word ‘help’ on them. According to Shein, the videos contain ‘misleading and false information’, saying the retailer takes supply chain issues very seriously.
Tambo’s View: It is unsurprising that Shein wants to break into the European market. Brands with similar offerings like H&M and Zara are highly popular and the continent has a sizeable demographic of young people who are cash-strapped and on the lookout for bargains. As an example, our 2021 report on Gen Z shopping behaviours, Add to Cart, highlighted that price was the number one factor when making purchase decisions for our Gen Z participants. The demand is there, however, if Shein wants to improve their image and re-attract investors, they will have to make real, meaningful change to some of their business practices.
That's all for this week. For more news on Amazon and updates about Tambo visit our blog.