YouTube announced its partnership with Shopify in July 2022 to improve the shopping experience for social media users. What this means, particularly for creators and merchants, is that they can sell products directly through live streams. Whereas for Shopify and YouTube, it is an opportunity to push the boundary of D2C commerce on social platforms.
They together want to leverage the creator economy to boost e-commerce purchases. So, what could be better than videos? Going by the data, consumer spending on social apps will reach almost $17.2 billion annually in 2025. And apps with live streaming as a prominent feature will account for the highest social commerce.
According to McKinsey Digital estimates, "live-commerce-initiated sales could account for as much as 10 to 20 percent of all e-commerce by 2026". Instagram, TikTok, and Amazon Live are contending to gain their market share since video is the best and more helpful way for product demonstration than written mediums.
But currently, a disconnect between content and commerce exists.
The collaboration of YouTube and Shopify aims to close this gap. YouTube content creators assist brands in engaging new customers and establishing a two-way dialogue in order to build customer trust and loyalty. It increases the likelihood of a purchase while also providing revenue opportunities for creators.
In the case of YouTube, its massive search engine (second largest after Google) stands in its favor. Its process of indexing products and its unrivaled huge daily user numbers makes it an ideal platform for creating unique shopping experiences for viewers.
But YouTube has a big battle ahead after its contemporaries like Meta announced the shutdown of its Facebook live shopping feature from October 1, 2022. It cited that it is shifting its attention to Reels on Facebook and Instagram, given consumers' shift towards short-form videos.
Also, TikTok, the world's 6th most used social platform, dropped its live-shopping plan last year as it failed to get consumers' attention and faced technical challenges. Notably, live shopping is still in a nascent stage in the USA and other European countries compared to Asia, where it is widely accepted.
But let us see how YouTube's partnership with Shopify can boost e-commerce purchases.
The journey to make YouTube a shopping destination began in 2020, when 55 percent of consumers preferred watching videos before making a purchase decision. If a viewer decides to buy a product after watching the video, he or she should go to Amazon or another site. To complete the final transactions, a customer had to visit multiple websites.
"When you think about things like unboxing and product reviews, those are a natural home for transactions as well," commented Google CEO Sundar Pichai on the potential of shopping on YouTube during Alphabet Q1 2020 Earning Calls.
It is in the last two years, YouTube has experimented with shopping by:
YouTube wanted its viewers to purchase products without leaving the platform. Because shoppers value word-of-mouth recommendations or information, YouTube asked content creators in 2020 to tag and track products featured in their videos. It transformed the YouTube video library into a product catalog, allowing users to click on items and purchase them directly.
Insights shared by YouTube show that nearly 75% of viewers agree that the video platform enhances the traditional shopping journey by delivering unexpected inspiration.
Robert Kyncl, the chief business officer of YouTube, explains in some of his videos how YouTube provides social commerce opportunities to D2C companies.
Because the creator economy has blurred the line between merchant and creator, both can use these three methods of social commerce on YouTube. It creates a new revenue stream for content creators by allowing them to sell merchandise or other products via their YouTube channel. A Shopify merchant can also set up a YouTube channel and import their inventory. Shopify currently has 1.75 million merchants worldwide.
The YouTube-Shopify integration isn't different from the Instagram- Shopify integration. In 2018, Instagram integrated with Shopify to reach more shoppers and shorten the path to purchase on the social platform. It allows merchants to sell directly to consumers through product tagging.
The main difference between Instagram and YouTube's social commerce strategy appears to be that Instagram allows creators to tag products from other brands, whereas YouTube (for now) only allows creators to tag products from their own store.
Furthermore, YouTube allows for links in the description unlike Instagram. It is still possible for YouTube creators to send followers to the brand's website.
Brands and creators can have their catalogs automatically synced from their Shopify store to YouTube. They can do a stoppable live-stream by tagging or pinning their products while the video is live. Shoppers can check out and buy the product while watching the videos picture-in-picture. On your Shopify admin, you can track sales and measure performance.
Creators can even add a trailer to their upcoming live event watch page to encourage users to set reminders, according to the YouTube blog.
YouTube, according to Kyncl, will not make any cuts unless it learns from community feedback. "For long-term planning, we are listening to and learning from community feedback. YouTube is currently not accepting any cuts "Kyncl stated in a YouTube video.
Get new blogs, case studies and our Market Landscape reports directly in your inbox.
We don't spam.