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A fun fact you may not have known: although the internet has been around since the early 1970s, use of it for commercial purposes was banned up until 1991. Soon after, in 1993, the internet became available to the public domain, and with it came a bold new way for commerce to evolve.
And evolve it has. In just 30 short years, ecommerce revolutionized a way of life that existed previously for thousands of years. For all of the differences between an ancient marketplace and a modern shopping mall, the thread still existed of a physical space that was visited in order to purchase your goods, but as technology has advanced with increasing rapidity so too has commerce to meet with consumer demands. In a world where instant gratification reigns supreme, people now have the luxury to obtain practically anything that they typically would at a retail store. Between 2011 and 2021 global retail online sales grew from $680 billion to $4.280 trillion and more than 2 billion people now regularly make online purchases worldwide. What was once for the early adopter has reached the masses in groundbreaking numbers and overall sales growth.
Today, mobile devices have brought about another new era in the online shopping world. Having convenience at your home or office is one thing. Being able to purchase while on the go has taken the market to new heights due to constant accessibility. Nearly 73 percent of all ecommerce sales are expected to take place on mobile devices by the end of 2021, and as our smartphones and tablets’ capabilities have become more advanced, so too have our habits as consumers changed. With 5G technology giving us access to content at lightning fast speeds, the ability to create and share videos is easier than ever before. With acceleration comes expectations for quick orders and transactions to match their social media driven lifestyle. Consumers are now used to seeing videos as they scroll through our social media platforms –– not only in TikTok, YouTube or Twitch, but even platforms that were previously more image-based such as Instagram or Pinterest, and we are beginning to see these video apps as a platform not only for entertainment, but for retail.
Shopatainment: a new era
The term “shopatainment” was first coined by Connie Chan of the venture capital firm Andreessen Horowitz, who defined it as “when sellers leverage video over photo to sell products, and where buyers browse seller videos as if they’re switching TV stations, looking for entertainment.” In theory, it sounds like a cool concept that would be a game-changing combination when considering viewership and online purchases. In an ecommerce industry that utilizes shopatainment, online spaces will exist for customers to engage with sellers on an experiential level, where transacting is simply a by-product of being entertained. The two-way street between shopping and entertainment is infused in this genius idea turned paradise for consumers, brands and content creators alike. It’s all the practicality and reach of bygone TV shopping channels combined with the hype, swagger, and vision of creators, creating the most authentic user-brand experience in the commerce world. The future of shopatainment lies in livestream shopping.
As consumers have become more savvy, trends have reflected this search for an authentic and relatable experience when shopping. It is imperative to have authentic and relatable content aligned, since the element of in-person customer service has become less available to truly tap into the pulse of the culture in a company. Thanks to the internet, they are able to educate themselves on a brand or product more than ever before when deciding how they will spend their money, and are looking to buy with purpose. Through shopatainment, brands can leverage entertainment, enticing or exclusive deals and expertise and curation to capture these customers without them ever feeling “sold to.”
Livestream shopping with dropp has its merits
For Chan, the future of shopatainment lies in livestream shopping. It’s not difficult to understand why she would make this case – China has already turned livestream shopping into a $137 billion a year industry (for comparison, the entire United States digital ad spend for 2020 was $135 billion) with scripted content, high value production sets, and even professional makeup artists and sound editors. Frozen frames and still images are a thing of the past, with videos providing a real-time experience. If a picture is worth a thousand words, a video is worth a million or more. A new breed of influencer has emerged within the country as a result, those who have a natural ability in front of the camera akin to a Twitch star or YouTuber and can draw a crowd through their relatability, trustworthiness and entertainment value.
Although nowhere near the scale of what China has accomplished, the beginnings of a livestream shopping industry within the United States is starting to take shape. Amazon launched Amazon Live back in 2019 which introduced live shoppable shows to their platform, Twitch has recently begun to feature more than just gamer streams – Lexus recently hosted a Twitch stream to promote its new car, and there are U.S. native livestream shopping companies that have begun to crop up and make waves such as NTWRK, which bills itself as the Home Shopping Network for Gen Z.
Taking shopatainment’s value beyond livestream
At the end of the day, while its potential to generate revenue as an industry can’t be denied, viewing livestream as the end-all-be-all of ecommerce is limiting the scope of what shopatainment can truly achieve. Through shopatainment, content, commerce and entertainment can all be delivered to you in a single package on your mobile device, taking a streaming tech stack and extending it to create a truly immersive, engaging and informative space for potential and returning customers. “See it, want it, get it” simply explains the process in short, which is dropp’s company slogan.
At dropp, they combine the convenience and authenticity of shopatainment with hype and impulse. Rather than tether themselves and creators to just live streaming content, the patented “see it, want it, get it ” advanced artificial intelligence, smart video technology allows consumers to buy whatever they see on their screens in a single instantaneous click without disrupting the viewing experience. In the first shopatainment test-marketplace solution, dropp has focused on disrupting the music industry by allowing creators to monetize their music videos through the potential to make everything, from the clothes they wear to the set pieces, shoppable. In turn, brands are able to seed their products authentically in the confines of the video. In addition, by collaborating with brands to create demand for special release and limited edition products, creators are able to engage in a symbiotic relationship that utilizes product placement and influencer marketing while the viewer simultaneously enjoys entertaining content. The evolution of ecommerce and entertainment is right in front of us.
The applications of shopatainment can also go well beyond the music industry, and benefit more than just small creators. As the expectation grows that consumers will switch from binge-watching to binge-shopping, traditional streaming services can also gain from the application of a shopatainment tech stack. Netflix’s last earnings call showed that their subscription revenue model is starting to plateau, begging the question of how they can introduce a new revenue stream. Shopatainment could be the answer they and other streaming services may be looking for. Just imagine what the Disney brand could accomplish if they took a shopatainment-focused approach to Disney+ and integrated a shoppable screen. You’ll see monumental numbers of watch time and returning customers from impulsive buys due to emotional childhood connections.
There is no doubt that livestream shopping will play a role in what is to come for ecommerce, and commerce in general. If the United States market grows to even have of the scale that China has achieved, it would still be a massive industry. However, today’s information technologies such as artificial intelligence, big data and 5G have opened doors to a much wider interpretation of shopatainment’s value: one that places the most importance on a seamless entertainment and shopping experience.
