Tech

Does Amazon-owned Twitch have a leg up on live shopping?

The streaming platform says its hyper-engaged audience positions it to outpace tech giants in e-commerce’s next big trend.
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· 5 min read

Streaming platform Twitch is best known for its dual-camera livestreams of gamers narrating their forays through virtual worlds. But the platform may also be the dark horse of live shopping, which, despite meteoric success in China, has so far struggled to get off the ground in the United States.

In December, Twitch (which was acquired by Amazon in 2014 for $970 million) brought back its holiday livestream shopping events—a series of shoppable game shows showcasing products ranging from underwear to headphones.

An infomercial-style stream featuring gamers clad in Christmas sweaters with the word “ad” across the front might not seem like a big revenue generator, but Twitch said live shopping is a natural space for it to be in.

“Twitch pioneered the online patronage models we’re seeing across the creator economy today,”  Adam Harris, global head of Twitch’s Brand Partnership Studio, told Retail Brew via senior communications manager Adiya Taylor. “As a leader in livestream entertainment, we build authentic ways for Gen Z and Millennial consumers to engage in live shopping.”

Setting the scene

There’s been a lot of talk about the promise of livestream shopping, but changing shopping habits takes time, and so far the format has struggled to gain traction with American consumers, said Sky Canaves, a senior analyst focusing on retail and e-commerce at Insider Intelligence.

“Around half [of US consumers] have no interest or haven’t heard of livestream shopping,” Canaves said, pointing to Insider data, which indicates that only 6% of Americans shop from livestreams regularly.

  • Compare this to China, where live shopping makes up nearly 12% of retail e-commerce sales, and where Insider data predicts that by the end of 2023, more than 45% of digital shoppers will buy via livestream.

“When you look at the 18-to-24 demographic [in the US], we get a much different picture—there’s a lot more interest…and familiarity with livestream shopping,” Canaves said.

That’s why platforms like Twitch or TikTok (which partnered with TalkShopLive in October to enable live shopping capabilities on the platform) may have the most potential for livestream shopping to take hold, she added.

“You have new, young shoppers, who don’t yet have fully formed buying habits, who are still open to experimenting and buying things and shopping in different ways,” Canaves said.

Value add: Karol Severin, senior analyst at entertainment intelligence firm MIDiA Research, said that while live shopping on Twitch is an intuitive way for parent company Amazon to sell more products, it may help keep content creators (and their audiences) on the platform, too.

“There’s actually a bit of a competition going on between platforms like Facebook, YouTube, Twitch, to keep the creators happy…so that they keep streaming,” he said. “It’s essentially giving them an additional way to make money.”

  • Whether live shopping moves the needle for creator earnings will be important when it comes to determining Twitch’s success, Severin added via email.
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Twitch’s positioning: The US live-shopping arena is a crowded one, but while Twitch faces competition from other tech giants, the platform itself is confident in its approach.

“Because of the tight-knit bonds our viewers build in real time with their favorite streamers, engagement on our service stands apart from overly-produced content elsewhere,” Harris said.

  • “Of course, being a part of Amazon, tapping into commerce felt like a natural progression for us, and we’re able to help to create interactive experiences for advertisers with a more engaged community than other services,” he added.

Brand considerations: One key consideration that may give Twitch a boost is the fact that gamers are some of the highest spenders on digital entertainment, said Severin, pointing to data from MIDiA surveys.

“Gamers are incredibly valuable in this sense,” he explained. But they’re not always easy to reach:

  • MIDiA’s research indicates that Twitch users are more likely to use ad blockers than the general population. That’s an issue for brands looking to engage high-spending gamers, but shopping in livestreams may help, he said.
  • That being said, it’s important to note that Twitch is still fairly niche, Severin added. Only around 11% of gamers (which MIDiA defines as people who play PC, console, or mobile games at least every month) use Twitch every week, according to MIDiA data, he said.

But brands that want to reach gamers via Twitch streams have to carefully consider the context, Pano Anthos, founder and managing director of accelerator XRC Labs, said.

“Most of Twitch [is] still gamers watching other gamers play games,” said Anthos, who isn’t convinced Twitch is perfectly positioned for live shopping. In expanding beyond gaming and further into livestream shopping, Twitch is “trying to turn the Titanic around,” he told Retail Brew.

“I think you’re going to find the upper bounds of how far they can get,” Anthos said. “That audience is there for a reason.”—MA

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