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Zara expands its live shopping experiment to Europe and US after China

by June 3, 2024
June 3, 2024

LONDON — Zara will expand its live shopping broadcasts to the United Kingdom (UK), Europe and the United States this year, testing a format that is already wildly popular in China but one with which Western shoppers are less familiar.

The fast-fashion brand, whose parent Inditex reports quarterly results on Wednesday, is investing in new ways to engage shoppers as analysts expect sales to grow less strongly after an extraordinary post-pandemic surge.

Five-hour long live shopping shows in China, broadcast weekly on Douyin, TikTok’s Chinese sister site, have helped boost Zara’s sales since they launched in November, according to retail analytics firm EDITED.

“We want to take this to the Western countries, where livestream is not as popular…but we think why not — from an entertainment perspective this is like an evolution,” said a Zara spokesperson for the initiative, which is expected to launch between August and October.

Shopping as entertainment isn’t new — TV shopping channels where viewers phoned in to buy featured products were popular for decades — but social media and e-commerce have triggered a new era of livestreaming, led by China where influencers sell everything from cosmetics to snacks at a frenetic pace.

Brands looking to create a more rarified experience have sought to do live shopping differently.

Zara’s show on Douyin features Chinese models wearing Zara dresses, trying on shoes and jewelry. It also includes catwalk sequences and “backstage” make-up shots, while its conversational, leisurely style is in contrast to the hard-sell livestreams that hosts like “Lipstick King” Li Jiaqi are famous for.

A team of 70 people works on the live show, which is streamed from a 1,000-square metre space in Shanghai, switching angles between seven cameras, Zara said. On average, it attracts around 800,000 unique viewers per show. “Zara’s livestream approach built significant brand awareness in China,” EDITED analyst Krista Corrigan said. Zara sold out of most sizes in 50% more products in China in the first three months of this year than in the same period of 2023, according to EDITED data.

The livestream also allows Zara to reach shoppers even as its physical presence in China has shrunk from 570 stores in 2019 to just 192 as of Jan. 31 this year. 

FRIENDLY, CASUAL AND FUN
In the UK, US and still to be announced European countries, Zara has chosen to host live shows on its app and website instead of a third-party social media platform to ensure control over aesthetics.

Alfonso Segura, who runs Barcelona-based fashion retail consultancy TFR, said this would also allow it to boost engagement and leverage its database of registered users.

The ad-hoc livestreams will highlight specific Zara Woman collections, and will be hosted by two “very well-known” fashion personalities, the brand said, without naming them.

Aiming for a “friendly, casual and fun” experience, the shows will be shorter than those on Douyin, lasting 45 minutes to an hour, but viewers will still be able to react in real time with questions, comments and emojis.

“We can’t always read across what has worked in China, to whether that’s going to work in western Europe or in the UK,” said JP Morgan analyst Georgina Johanan.

But, she added, Inditex’s investment in live shopping is an example of its momentum and ability to be at the forefront of experimenting with new formats.

“This is a business that, 10 years ago, most people were saying was behind in online, and here they are one of the first to trial this in the UK,” Ms. Johanan said.

Asos, L’Oréal and Puma are among brands to have launched on TikTok Shop in the UK in recent months, the platform said, while AliBaba platform AliExpress launched a UK livestream show in March called “It Girls” featuring influencers including Olivia Attwood.

Asos said its first order came within 30 minutes of launching, and new shoppers account for 57% of those buying its products via TikTok Shop.

Madrid-based Carmen Muley started out hosting AliExpress’ first livestream in China in 2016 and now advises brands on live shopping strategy through her company Paragon Social Commerce.

“Here in Europe, we don’t really like having someone selling something to us aggressively — of course the end goal of a live shopping event is to sell a product, but consumers don’t want to feel like they have the obligation to buy,” she said.

“Offering something the consumer would not normally find in stores is a good idea — you need to make the event special, otherwise why would they join?”

Inditex declined to say how much it is investing in the new format but the family-owned company is sitting on an 11 billion euro cash pile, giving it the firepower and a safety net to experiment with new ways of selling, even if success isn’t guaranteed. — Reuters

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