We all know how great online shopping can be, particularly for mundane items. It's also great for crowd avoidance and provides a nice alternative to braving the elements during inclement weather.
But as any shopaholic can tell you, online shopping isn't much fun -- not as fun, anyway, as the retail shopping experience can be, from connecting with people to the discovery of new items.
Although online shopping isn't going anywhere, there is a more exciting shopping experience that consumers can do from home: livestream shopping, or video shopping, which is proving to be popular, as proven by one giant in the industry.
NTWRK, a livestream shopping platform that blends entertainment with commerce, recently raised $50 million in funding led by Goldman Sachs Asset Management (Goldman Sachs) and luxury group Kering. (Kering owns such high-end brands as Gucci, Saint Laurent, Bottega Veneta, Balenciaga, and Alexander McQueen.) Other participants in this round were LionTree Partners and Tenere Capital. Previous investors include Foot Locker, Live Nation, and Main Street Advisors.
COVID-19 lockdowns were the impetus to spur NTWRK to produce content to use for live commerce events, which are similar to home shopping TV shows but updated for a younger audience and allowing for real-time interaction. And NTWRK, indeed, appeals to millennials and Gen Z. The experience has been described as a combination of Twitch (a video live streaming service), Twitter, and QVC.
Sellers on NTWRK interact with shoppers to sell products in real time. Shoppers can also interact with other shoppers while they browse clothing, shoes, and whatever else is playing on the livestream event. Sometimes well-known entertainers are featured hosts, such as Billie Eilish, DJ Khaled, and the Wu-Tang Clan.
NTWRK also uses an old retail ploy that's been rebranded with a new name called the "product drop," which is a limited release of an item designed to create buzz and anticipation while also limiting supply to create more demand -- the buy-it-now-before-they're-all-gone marketing hype that's been a staple of home shopping TV shows. The target market for NTWRK is the younger consumer, who might not be wise to these sorts of tactics.
Virtual festivals are also part of the programming, and NTWRK already has its own flagship event, TRANSFER. These are typically high-energy online events scheduled for a particular time or sometimes spanning several days, featuring sellers pitching their wares, conferences with panels, interviews, and musical performances -- kind of like what people usually do at an in-person festival. Expect to see these events for all sorts of things: a toy or home goods experience before the holidays, perhaps.
With the funding it recently received, NTWRK plans to further its growth and establish a global footprint. Said NTWRK CEO Aaron Levant, "Our vision is to become the biggest, most culturally relevant livestream shopping marketplace for Gen Z and millennial audiences who are obsessed with pop culture."
The Millionacres bottom line
Livestream shopping is amazingly popular in China, where it was a $150 billion industry in 2020 and is expected to reach $300 billion this year. The expectation for the U.S. is that livestream shopping will be a $11 billion industry by the end of 2021 and by 2025 will hit $25 billion. NTWRK is well-positioned in this space, and has received multiple awards from the media, such as being a 2021 "Ad Age Hottest Brand." Retail and commercial real estate investors should take note and plan their own strategies accordingly.