Video-based e-commerce

Video has been used to help sell products, through advertising or in the use of product placement. But there has been a rise in consumers using video for purchasing decisions. In the United States, the usual monetization system for video is limiting, where the use of advertising on videos is the largest generator of income for creators or influencers. While the overall growth of consumption of shot-form video on content platforms such as TikTok, Instagram, YouTube, and Pinterest offer a new avenue for e-commerce.

The growth of video included on product pages for e-commerce sites is increasing and already happening on a larger scale in Asia. China's largest e-commerce platform, Taobao, has video on 42 percent of their product pages. These videos have an estimated 40% increase in organic search traffic and an estimated uplift of 80% of time spent on a page or e-commerce website. These videos also offer a place to sell items directly from the video to increase sales through posting a video on multiple content platforms, outside of a single e-commerce site.

In China, Douyin (the Chinese version of TikTok) and Kwai work to develop entertaining videos to capture and audience and drive interest in products. These companies focus on fashion tutorials, how-to-dress videos, and beauty tutorials to market and sell products.

An example of YouTube's Video Action Campaigns which offers video shopping.

In 2020, during the COVID-19 pandemic, there was an increase in the United States of video e-commerce, including Google's incubated Shoploop, which allows users to shop beauty and fashion products by scrolling through 90-second video, and The Lobby, which offers a video-centric marketplace with brands selling products through content makers. And more traditional video content platforms, such as YouTube and Instagram, have introduced features to make their videos shoppable.

In a kind of return to 1980's commerce similar to the Home Shopping Network, live streaming e-commerce has increased emerged and increased in popularity. Previous to 2020, live streaming e-commerce was popular in China, and Asia in general, with the market for live streaming e-commerce in China estimated to be worth $60 billion annually, capturing about 9% of all online retail sales. About 30% of China's population is estimated to have viewed livestreams in 2020, a number which is expected to grow year over year. The overall Chinese e-commerce market is estimated to generate $1 trillion dollars in 2020, up from the $862 billion generated in 2019, and capturing the over 700 million Chinese consumers expected to shop online each year.

An example of a live stream in which users can comment and interact with the host and purchase products in stream.

Live streaming e-commerce emerged in 2014 when Chinese fashion e-commerce platform Mogujie began to experiment with live streaming e-commerce and Alibaba's Taabao Live followed. Both of these platforms allow viewers to interact with the livestream host as they market and model products, including asking questions to understand the products better. Alibaba's Taobao Live has 80% of the Chinese market, while companies such as Baidu and JD.com have developed shoppable live streaming. This live streaming e-commerce has even included watching someone open oysters to reveal their pearls and then bidding on purchasing those pearls, to following farmers while they pick strawberries or harvest honey and being able to purchase or bid on purchasing those products.

Meanwhile, despite the increase in e-commerce and live streaming during the COVID-19 pandemic, the introduction and adoption of live streaming e-commerce has been slower. Amazon, Facebook, and TikTok are all working on developing live streaming e-commerce options. This includes Amazon's Amazon Live which allows consumers to purchase products demonstrated by content marketers, or hosts. Facebook has announced the development of purchasing features to the Facebook Shops videos. In 2019, TikTok launched in-app shopping features where brands could sell products through video. While in 2020, Walmart announced a partnership with TikTok to test a new shoppable experience in which consumers would be able to shop from Walmart's fashion items during livestreams in the TikTok app.

Similar to video and live stream e-commerce, augmented reality (AR) and virtual reality (VR) commerce is growing as a way for consumers to interact with products and brands in new ways. Including offering trying products on or placing them in a specific room to see what it would look like, to made-to-order finishing through body scanning. Goldman Sachs estimation for the market for AR and VR commerce is that it will reach $1.6 billion by 2025. Statistics have shown two-thirds of individuals using the internet would be interested in virtual reality shopping, with a further 63% saying such technologies would change the way they shopped.

Example of Home Depot's augmented reality application in which users can preview furniture in a space before purchasing.

Augmented reality applications have grown, offering a "try-before-you-buy" experience which includes previewing furniture or home décor products within a space, to trying on sneakers, glasses, or luxury fashion items to see how they would look on an individual. These options have been integrated into online and in-store experiences, with the online experience helping customers preview items, develop shopping lists in the same application, and offering customers the quickest way of purchasing those products. Similar to that, other augmented reality e-commerce solutions have offered customers the chance to virtually experience cosmetics and, when they approve, purchase those products without leaving the application.

Example of a virtual store.

Virtual reality e-commerce technologies are in a more initial stage when compared to augmented reality e-commerce technologies. This is due, in part, to the need for proprietary electronics in order to engage in virtual reality e-commerce, which have driven a large part of these shopping experiences to in-store experiences, while most augmented reality e-commerce technologies can be run off of a smartphone. An in-store example of virtual reality includes Amazon's opening of 10 virtual reality kiosks in shopping malls across India which allowed customers to take hot air balloon rides and walk through rooms with products on display which could be purchased during the experience. This experience included the Oculus Touch controller, which allow customers to handle products and try them on in the experience. Meanwhile, Alibaba has used virtual reality to allow shoppers to explore a virtual store during "Single's Day" where the shoppers could examine and interact with products in 3D before purchasing them. This experience was available from a customers home.