Dusseldorf Influencers and brand manufacturers have recently been able to sell their products in live videos on YouTube. Customers can ask questions directly, comment on the offer and discuss it with each other. But for the actual purchase, the customer still has to leave the platform and switch to the retailer’s shop.
That will now change: A cooperation with the software provider Shopify makes it possible to buy the products directly with a click on the video.
What at first glance seems like a detail is the next important step in the attack on Amazon in e-commerce for YouTube mother Google. By linking to Shopify, the subsidiary YouTube becomes a direct shopping channel.
With the new alliance, two companies with a powerful reach are coming together. “We have an incredible number of customers who deal with the topic of live shopping. With two billion monthly users, YouTube is a very important platform,” says Birk Angermann, who is responsible for the development of solutions for retailers at Shopify, in an interview with the Handelsblatt.
Top jobs of the day
Find the best jobs now and
be notified by email.
Youtube, in turn, opens up a large customer base. Last year, merchants processed sales of 175 billion US dollars via Shopify. That’s almost half the volume of Amazon Marketplace.
Amazon has a social commerce blind spot
Amazon is still the benchmark for all competitors in e-commerce. In the USA, the platform has a market share of more than 40 percent in online trading, and the situation is similar in Germany.
But Amazon has had a blind spot in the increasingly important sale via social networks. Amazon neither offers the possibility of selling products on the platform via videos, nor does Amazon allow third-party retailers to directly integrate Instagram, Facebook and Co. Shopify and Google now want to take advantage of this.
“Two very strong players are joining forces here,” says Andreas Hell, e-commerce expert at digital consultancy diconium. “Google has understood how to play e-commerce and is now taking the right steps,” says Hell.
Google is also increasingly linking its central search engine platform to online trading. The company has already introduced the “Google Shopping Actions” function. The customer has a shopping cart directly on Google, the search engine provider bundles the sales for several retailers and handles the entire sales process for them.
Next, among other things, an extension of the Google search will come, which is called “Checkout on Merchants”. This service is intended to enable customers to click on a desired product and place it directly in the shopping cart on the provider’s website. One of the first partners alongside Walmart for this new checkout feature will also be Shopify.
Orders via social media channels quadrupled
The cooperation with Shopify offers great potential for Google. “The Shopify stores together not only account for 45 percent of the sales of the Amazon marketplace, they are also growing much faster,” observes e-commerce expert Hell. Or as Shopify founder Tobi Lütke once said: “Amazon is trying to build an empire, and we’re trying to arm the rebels.”
Shopify offers a software platform that retailers and brand manufacturers can use not only to run their online shop, but also to integrate all other channels via interfaces, from brick-and-mortar shops to online marketplaces and sales on social media. “Our aim is to make the integration so easy that all of this can also be used by companies that don’t have a huge development team,” says Shopify manager Angermann.
“Shopify has a very good and flexible software architecture,” explains expert Hell. “With the connections to the social media platforms, they play to their strengths to the full.” This already seems to be paying off: According to Shopify data, orders via social commerce partner channels have quadrupled in the first quarter of 2022 compared to the same quarter of the previous year.
The Shopify manager wants to help brands and retailers to make better use of the potential in social commerce.
(Photo: Shopify)
“Amazon is certainly the benchmark in many areas, but we also have areas in which we deliberately differ,” emphasizes Shopify manager Angermann. “It is an important competitive advantage for us that we give retailers the flexibility to be able to sell across all channels with one shop software.”
Tiktok parent Bytedance is already making billions in China
Shopify was the first to open up the up-and-coming Tiktok network as a sales channel for retailers through cooperation in the USA and Europe. More and more brand manufacturers such as Fielmann, Volkswagen, Sennheiser or Lindt now have their own shops on Tiktok.
In a survey by market research firm Kantar, 83 percent of respondents said videos on Tiktok inspired them to make a sale. Retailers and manufacturers can now reach these customers even more directly by integrating a sell button directly into the Tiktok videos.
The model is the market in China, the home country of Tiktok. There, Douyin, Tiktok’s Chinese sister company, already handles e-commerce sales of the equivalent of more than 65 billion euros per year via its platform. Now the parent company Bytedance is preparing to transfer this success with Tiktok to Europe and the USA.
>> Read here: This is how Tiktok becomes the next-generation Amazon
Youtube wants to prepare for this with the help of Shopify. In addition to the option of placing links in the video, a completely new section is being added to the retailers’ YouTube shops, the shop tab. There he can show his complete product selection. Also, the retailer can attach a selected list of products below the videos.
In Germany, for example, the YouTuber Bodykiss, who has 654,000 subscribers on YouTube and sells sportswear and fitness items in her shop, will be there at the start. “Having a live shopping feature that connects my Shopify store to my Youtube channels in a smooth and hassle-free way will definitely improve the experience for my community,” says the influencer. The Manchester United fan article shop has been there from the start with 1.37 million followers on YouTube.
Great potential for Netflix and Amazon Prime
Shopify manager Angermann is also aware of how fast the development of social commerce is. “You never know what’s coming next,” he says. A few years ago there was no Tiktok, and now Tiktok has 100 million active users in Europe alone. “We always have to look at where the market is going and then give brands and retailers the right tools to seize the opportunities.”
For the e-commerce expert Hell, the next step could be the integration of streaming services into online trading. “It will be exciting to see how Netflix reacts now,” he says. “You’re looking for new income, and there are good opportunities here.”
The Amazon Prime streaming service would not only have its own marketplace for this, but also the technical requirements. The X-Ray function is already available there, with which viewers can import additional information on selected films, for example on the actors or the music used.
Amazon could use this to include direct links to shops in the broadcast. But the e-commerce giant is still leaving this billion-dollar market to the competition.
More: How James Bond can boost sales on Amazon’s marketplace.