Can ZARA’s live show go beyond the path of selling high-end products?

This article explores how ZARA attempts to take a different path to high-end sales by integrating high-end shows into live streaming. From innovative live streaming formats to sales strategies, ZARA's attempts have been successful in attracting viewers, but face challenges in conversion rates. The article analyzes ZARA's live streaming strategy and compares the current status and consumer preferences of live streaming sales at home and abroad.

Chinese consumers’ acceptance of online shopping, coupled with the convenience of shopping on mobile devices, has made live streaming a common way of shopping in the country.

A number of brands that were gradually declining have also made a great comeback through live streaming, especially domestic brands. For example, Huoli 28 was busy with live streaming on the verge of bankruptcy, and the comments in Erke's live streaming room were full of "buy whatever you have", and the boss of Fenghua "picked up" Li Jiaqi's fans, and gained millions of fans due to the eyebrow pencil incident...

Image source: TikTok

Even overseas brands have noticed the huge pie of the domestic live streaming market and have entered the market one after another. Brands such as ZARA, Uniqlo, and Coach have opened official flagship stores on Douyin, and some brands have several live streaming rooms.

But the live broadcast style of each brand is different. Among them, ZARA has developed a unique style of "high-end show".

01. Applause does not equal to box office success

The most popular live broadcast of ZARA was at the end of last year. It innovatively integrated the show into the live broadcast room and invited supermodel You Tianyi to walk the show. The live broadcast was held in a super luxurious live broadcast room with a height of nearly 8 meters and an area of ​​500 square meters. It was combined with top equipment such as 5 ARRI cameras and 3 Steadicams, plus a dolly and mechanical jib, and 12 ARRI 400w spotlights to create a light and shadow effect worth more than 500,000 yuan.

The camera followed the supermodels and the two anchors throughout the show, showing them switching between different scenes: either showing their elegant walk on the catwalk, or introducing products in detail and sharing fashion insights backstage, and even showing the small details of makeup touch-ups to the audience without reservation. The entire live broadcast, from the scene layout, camera use, to the process rhythm and overall atmosphere, provided a visual feast that was completely different from regular live broadcasts.

Image source: TikTok

This innovative attempt set the best record since ZARA started broadcasting on the Douyin platform. According to data provided by Douyin, the average number of viewers for ZARA's previous single broadcast was less than 200,000, while this five-hour live broadcast attracted nearly 1.22 million viewers, with the highest number of simultaneous online viewers reaching 13,000.

Entries such as "The scene in ZARA's live broadcast room is so high-end" and "ZARA's live broadcast reaches new heights" have successively appeared on the Douyin hot list.

There are generally two types of live streaming sales. One is corporate live streaming, where a company opens multiple live streaming rooms and different anchors sell goods at the same time, and the coupon amounts may be different.

The other is product promotion by influencers. Generally speaking, except for brand-specific sessions, a live broadcast will not only promote one brand, but multiple brands will be introduced one by one in the same live broadcast.

Image source: Taobao

ZARA has created a new live broadcast format, but from a business perspective, many netizens have complained: "How many live broadcasts can you make back the money spent on the camera?" "It's not high-tech, the equipment used is just expensive." "With so many cameras and people, the cost may be higher than that of Apple's lucky bags, but it doesn't have as much popularity as the lucky bags." "Even TikTok can't transmit such high-definition image quality."...

Judging from the transaction volume, the performance is indeed average. Douchacha data shows that the sales of ZARA's live broadcast were 250,000-500,000 yuan, and the exposure GPM (transaction amount per thousand exposures) was 100-200; while the sales of ZARA's previous live broadcast were 100,000-250,000 yuan, but the exposure GPM was 700-800. In summary, it is high investment, low conversion, and "well-received but not popular."

02. Try to take the high road

ZARA's parent company is Spain's Inditex Group, which owns many world-renowned fashion brands including ZARA, Pull and Bear, Bershka, Massimo Dutti, Stradivarius, Oysho, Uterqüe, Tempe, etc. The group's founder Amancio Ortega is a frequent visitor to the Forbes rich list, and even briefly surpassed Bill Gates to become the world's richest man in October 2015 and September 2016.

The current chairman of the board of directors of Inditex Group is Marta Ortega, daughter of Amancio Ortega. According to reports, she believes that it is very important to build a bridge between high-end fashion and high street fashion, past and present, technology and fashion, art and functionality. This is exactly the role she wants to build ZARA into. She is also the driving force behind ZARA's high-end and fashionable development.

Inditex Group CEO Oscar Garcia Maceiras once told Reuters that Marta Otega has been focused on redefining ZARA's brand and product strategy, targeting the wealthy class and increasing investment in flagship stores in prime locations while raising prices.

Thanks to this, Inditex Group's sales in 2023 increased by 10% to 26.05 billion euros, of which ZARA contributed more than 70% of the group's sales, with a gross profit margin of 57.8%, the highest level since 2016, and gross profit increased by 11.9% to 20.8 billion euros.

As of the first quarter of fiscal year 2024, Inditex Group's sales increased by 7.1% to 8.15 billion euros, an increase of 10.6% at constant exchange rates, and profits increased by 11% to 1.3 billion euros, compared with 1.17 billion euros in the same period last year, and gross profit margin increased by 13 basis points to 60.6%.

High-end means expensive. In the official ZARA flagship store on Douyin, many coats, windbreakers, and suits are priced over 2,000 yuan. The most expensive coat costs 3,999 yuan. It is hard to associate it with ZARA, which once focused on cost-effectiveness.

Image source: TikTok

In terms of live streaming, ZARA also wants to go the high-end route, which is understandable. However, judging from the reaction of the Chinese market, consumers like it, but are not willing to pay for it. In fact, it is easy to understand if you think about it. At present, the main highlight of live streaming in China is discounts and low prices. Consumers have already formed consumption habits, and they will be somewhat uncomfortable with the sudden change to high-end consumption.

However, ZARA is not willing to give up trying this important sales model. Not long ago, ZARA announced that it would expand the live streaming model to the UK, Europe and the US markets, and planned to broadcast live on its applications and websites, focusing on the specific series of ZARA Woman. In order to provide a more casual and interesting experience, the live broadcast time will be shortened to 45 minutes to one hour, and the audience can interact in real time through questions, comments and emoticons.

The European and American consumer markets may be more "high-end" than the Chinese market, but will consumers like this kind of live broadcast format?

03. How far has overseas live streaming come?

There is also no shortage of "shopping addicts" among European and American consumers. Currently, foreign live shopping platforms include Amazon Live, Instagram, YouTube, TikTok, Shoploop, etc. Live streaming is gradually "invading" the wallets of local audiences.

Open the homepage of Amazon Live, and you can see categories such as featured creators, recommended live broadcasts, upcoming live broadcasts, and current trends. Similar to China, clothing, beauty, games, etc. are always the most popular categories. With the arrival of Father's Day, many live broadcast rooms have also put up goodies suitable for fathers.

Image source: Amazon Live

Compared with domestic live broadcast rooms, European and American anchors look more casual and relaxed. Many anchors broadcast live at home, not in the office. Past live broadcast content will be displayed at the bottom of the homepage, and consumers can click on the link to buy. However, the anchors do not sell fixed categories. They may sell beauty products and clothing in the previous video, and sell water pipes in the next live broadcast.

Image source: Amazon Live

When consumers watch live broadcasts, in addition to listening to detailed explanations, what they care most about is price. In domestic live broadcasts, you can often hear "Today's price is...", "Buy one get two free", etc. Foreign live broadcast rooms will also give price discounts during live broadcasts. In the live broadcasts of "Amazon offers discounts" accounts, many discounts are marked in the shopping links below.

Image source: Amazon Live

Among the major live streaming platforms abroad, TikTok Shop is a rising star. At the end of last year, TikTok Shop, which had only been officially opened in the United States for three months, achieved a single-day GMV of over US$14 million.

During the US summer promotion from May 30 to June 10, the overall GMV of the TikTok Shop platform surged by 129%, with the GMV of the content field and shelf field increasing by 129% and 132% respectively. In addition, the single-day sales peak of this promotion broke the historical record of TikTok Shop in the US, even surpassing the sales level of last year's Black Friday.

In early June, the live broadcasts of well-known TikTok influencers Jeffre Star and Mandy Pena achieved single-game GMV results of US$665,000 and US$700,000 respectively, while Stormi Steele successfully broke the "single-game million-dollar" record in the United States.

If Amazon Live’s live streaming interface looks unfamiliar, does TikTok’s look much more familiar?

Image source: TikTok Shop

It can be seen that in the field of live streaming, the forms that people all over the world like to see and hear have a lot of similarities. The "high-end route" is not bad, but it may not be close to the people, and the form is a bit advanced. ZARA is expected to launch live streaming in Europe from August to October. By then, we will also see whether this well-known brand will choose to change itself to adapt to the market, or choose to stick to the high-end route and look forward to leading the new trend.