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Livestreaming has become a huge consumer craze in China, and the trend is making its way to the US
Many social media and retail platforms now offer live shopping experiences for US-based shoppers, including eBay and Poshmark, both of which added live shopping to their platforms this year.
“We see live selling and shopping as a natural part of our social marketplace and something our community really wants from us,” said a spokesperson for Poshmark, which is currently testing live shopping in beta.
As a shopper, the excitement of an instant, interactive shopping experience hosted by a celebrity like Kim Kardashian, Drew Barrymore or Deion Sanders may draw you to a live event. But before you get involved, consider how the trend could affect your wallet.
What is Live Shopping?
Online shopping takes the human element out of shopping, but in-person shopping brings it back. Kind of.
During live shopping events, customers can participate in interactive videos where celebrities, influencers and other retailers present their new product lines, offer demos and questions for local viewers in real time.
If you see something you like, you can bid or buy it on the spot. Some consumers may find information such as watching shopping television channels such as QVC or HSN.
“For consumers, live shopping creates an opportunity to learn more about the products they want, discover the latest trends, and see real-time updates from content creators they trust, such as whether a top item is featured, or a staple. the shade matches their skin tone,” explains David Sykes, chief commercial officer for postpaid (BNPL) Klarna apps.
Klarna is among the few platforms that now offer virtual shopping, a live option where you can video chat with a store representative or stylist one-on-one, and see what they recommend.
During the holidays you can also expect to see an increase in one popular type of live event: seasonal shopping festivals. According to a Klarna survey, 66% of Millennials and 54% of GenZ are interested in attending live shopping events this holiday season.
How to Buy Live?
Each platform has its own process, but in general you’ll need to follow these steps to purchase during a live stream:
- Upload your payment information to the platform. The platform may accept various payment formats, including debit cards, credit cards, PayPal and buy now payday loans from Klarna or Affirm.
- Join the event. You may need to RSVP or pre-register, or you can simply watch the video once it’s live.
- Click the product link or make a bid. Click on a product tag, buy button, or link to place a bid or add an item to your shopping cart. For auction items, there is usually a starting price and a short time limit for bidding.
- Complete the checkout process. Visit your shopping cart to view shipping fees and other terms and complete your purchase.
3 Reasons to Avoid Live Shopping
For retailers, live events can mean quick fundraising. But for consumers, the benefits are not readily available. Watching a live stream may give you access to a rare item or information on product quality, but it may also encourage bad spending habits.
Here are some reasons you might want to stay away:
1. Encourages Impulse Shopping
Live shopping creates a perfect storm of careless spending and buyer’s remorse.
Items often featured in live shopping videos—especially fashion and beauty products—are some of the things consumers say they buy most often without hesitation, according to research from the website SlickDeals.
The fast-paced format of live events also gives consumers a sense of urgency, which retailers reinforce with limited-time deals, promo codes and timed sales, meaning you’re less likely to check the actual value of a product before buying.
For example, Poshmark auctions only last 60 seconds. Also, all bids are binding and the platform does not allow returns.
Research shows that the social nature of online shopping is not conducive to making informed decisions. “We know that people are more inclined to make risky decisions when they are part of a group than when they are alone,” said consumer behavior expert Michael Solomon.
“Livestream buyers need to be vigilant because they are victims of the same forces that affect anyone interacting with other buyers and influencers during the selection process,” he explains.
His best advice is to make a shopping list before joining the live show.
Solomon says: “Before you go down the slippery slope of dear influencers who tempt you with all kinds of sugary gifts, have a clear sense of what you really need.” “The promoters will come back tomorrow with another option.”
2. Don’t be fooled
According to the Federal Trade Commission, fraudsters benefit more from social media than any other method they use to achieve their goals.
Each platform has its own vetting or approval process for sellers, and some require sellers to have active business accounts before going live. But others make selling too easy.
For example, it only takes a few clicks to change your personal account to a business account on Instagram, and once you’ve changed, you can tag and sell products with a live reel.
A fraudster can use social media to pose as a brand representative, create a fake store and sell fake products or goods that don’t exist.
Before trusting a seller with your payment information or buying something you can’t return, take these steps to vet the seller:
- Find out if and how the platform approves sellers.
- Review the platform and/or seller’s return policy. If applicable, ask the seller if there is a product warranty.
- Check for red flags of a scam, such as misspelled brand names or links to similar websites.
- Read dealer customer reviews and search online for dealer reviews or alerts.
- Review all payments, including those for shipping to your area.
3. You May Feel Pressured to Take on Debt
Several live streaming platforms accept new payment methods such as buy now pay later, and this particular payment method is heavily marketed by social media influencers.
But BNPL can be bad for your finances, in part because it turns your purchase into a loan.
As with any loan, missing a BNPL payment can mean late payments and damage your credit. On top of that, BNPL’s interest rates can be as high as 36%. The audit also found that BNPL loans encourage overspending and that some users find it difficult to repay.
Unfortunately, many buyers are tempted to pay for sales using these loans. In a Forbes Advisor survey, 64% of respondents said they plan to use BNPL to buy holiday gifts this year, and 70% said they will use BNPL to spend more than they originally planned.
If you plan to use streaming purchases, try using a cash-based payment method. If you use a credit card or loan, make sure you have a plan to pay off the loan within your payment cycle, which is usually 30 days.