After a brand is bound to a live broadcast room, how to retain traffic?

On October 20, Li Jiaqi and Wei Ya’s live broadcast rooms launched the first Double Eleven event of this year. The data from this peak PK is that the deposits generated by the two live broadcast rooms totaled more than 1 billion. The clarion call for this national shopping carnival has been sounded.

Prior to this, Li Jiaqi teamed up with his cousin Liu Boxin to release his first single "Buy It" on the 19th, and the number of views exceeded 7.6 million times. The buy-one-get-one-free promotion for Double Eleven hot products in Wei Ya’s live broadcast room is also climbing the hot search list.

With less than a month left until Double Eleven, topics such as "Li Jiaqi's Double Eleven Preview" and "Viya's Double Eleven Hot-selling List" have been on the hot search list on Weibo many times. The former has 1.57 billion views and 2.194 million discussions, while the latter has 1.33 billion views and 2.388 million discussions.

Those who participated in the discussion under the topic were either those who wanted to cheat on others' homework or those who shouted that their wallets had been emptied. Every time a Double Eleven product preview appears in their live broadcast rooms, it triggers a round of heated discussion.

Fans are concerned about the brands participating in the event, the extent of the discounts, and the methods of the event. The live broadcast rooms and every move of the two top anchors have almost become the focus of attention before the Double Eleven shopping spree.

In the past few years when live streaming has been at the center of the trend, many brands have become famous, made a comeback, or failed miserably through the live streaming rooms. New brands regard the live broadcast room as a new battlefield and continue to write their own history. With the irregular live streaming of goods, these brands are becoming increasingly dependent on the live streaming rooms. Is this good or bad for them?

1. Stay in the live broadcast room even if you lose money

At six o'clock in the afternoon, a friend sent Li Aija a WeChat message asking her to read it. After opening the link, the content was a preview of Li Jiaqi’s live broadcast that night. “Although I have never heard of many of the brand names, the discounts do look very tempting.” With this mentality, Li Aija opened Li Jiaqi’s live broadcast room that night.

Amid the rising "buy it" sentiment and fans' crazy rush to buy products, Li Aijia also felt an inexplicable urge to shop. That night, Li Aija placed orders at Yuze, Perfect Diary, and Huaxizi, stores she had never heard of before. It was not until the screen in the live broadcast room went black that Li Aija's mood gradually calmed down.

Before this, Li Aija had also watched several live broadcasts selling goods, but she often watched the live broadcasts specifically because of a brand that she was interested in. "I heard about many new brands for the first time in the live broadcast room. I never saw them normally. However, the discounts in the live broadcast room were very low, which gave me the idea that 'I would make a profit if I bought them, and I would lose money if I didn't buy them', so I impulsively followed everyone to grab them," said Li Aija.

Therefore, although she was not familiar with the brand, after Li Jiaqi's explanation and recommendation, Li Aija also placed an order. Even when one of the limited edition makeup products was sold out in seconds, Li Aija was so anxious that she kept refreshing the interface, waiting for an order to be sold, and she looked like a loyal fan who had been waiting for a long time.

She later discovered that these brands were those that had long been active in the live broadcast rooms of top anchors such as Li Jiaqi and Viya, and their popularity, sales and revenue were almost entirely dependent on regular promotions in the live broadcast rooms. However, the purpose of some established manufacturers and international brands joining the live broadcast room is more likely to be for regular exposure and to obtain public domain traffic.

Wei Ya and Li Jiaqi started the Double Eleven warm-up activities early

According to Zinc Scale, it is not easy for merchants to make a single investment in a live broadcast room.

Not long ago, an overseas dairy company where Trinity worked finally came to Wei Ya’s live broadcast room after some review. 1.5 million yuan in inventory, 30,000 yuan in slot fees, and 20% commission. These are the data provided by Trinity, and are also the basic conditions for entering Wei Ya's live broadcast room.

"After the product selection is approved, the company will sign a contract with Wei Ya's team and pay a deposit. Based on her experience and brand awareness, she will set a stocking quantity for us, at least 1 million pieces," Trinity told Zinc Scale. "Because we didn't have enough stock before, we were worried that it would be rejected because of the small amount of stock, because the value of the goods also directly affects the output of the anchor's slot."

Trinity also mentioned that top anchors like Viya are strict in selecting products and are worried about complaints, so brands often have to wait a long time after delivering samples. "We waited for a month for the order, and she kept such a large quantity of goods for almost half a month, but in the end it was a loss-making business, and we only made a profit."

Brands don’t have to worry about sales in the live broadcast rooms of Li Jiaqi and Viya. The model of slot fee + commission determines that the anchors will work hard to sell as many products as possible. But as Trinity said, in order to enter the live broadcast room of the top anchors, brands must offer the most sincere and low prices. After deducting the slot fees and commissions paid to the anchors, the profits are indeed meager.

This statement was also confirmed in the data released by Mengjie Co., Ltd., which often cooperates with Weiya. Among the seven live-streaming collaborations between Mengjie Co., Ltd. and Viya, the first three were in 2019, with total sales of 4.6925 million yuan, 1.04 million yuan paid to Viya, and revenue of 3.6 million yuan. The last four times occurred in 2020, of which the cumulative sales amount for three times was 8.1212 million yuan, 2.13 million yuan was paid to Viya, and the income was less than 6 million yuan. The revenue from 7 collaborations was less than 10 million, which is indeed not much compared to the manpower and funds required to prepare a live broadcast.

2. New Internet celebrities and national old brands cannot avoid live streaming

"For traditional companies like us, entering live broadcast rooms is more about showing our presence than boosting sales and profits. Even if an event loses money, what matters more is whether the influence and spread of the Internet is sustained," Trinity told Zinc Scale.

But at the same time, Trinity also believes that the close binding between some new brands and the live broadcast rooms of top anchors is more like mutual achievement. While the brand regularly gains large traffic exposure and sales growth, it can also give the anchor the advantage of launching new products. Over time, it will promote the growth of both the brand and the anchor.

Brands such as Perfect Diary, Yuze, and Huaxizi are frequent visitors to live streaming rooms, and are also new brands that have successfully emerged in the era of live streaming.

Data shows that Perfect Diary became popular thanks to live streaming sales, with sales exceeding 3.5 billion yuan across all channels in 2019. Huaxizi's sales on Tmall exceeded 1.5 billion yuan in 2019.

"These brands buy traffic from the public domain by entering the live broadcast room, and then transfer it to private domain traffic, gradually gaining the right to control the traffic." An e-commerce observer told Zinc Scale.

The observer cited the example of the Huaxizi brand, saying that Perfect Diary had previously gained a certain degree of attention and discussion by placing advertisements on Bilibili and Xiaohongshu, while Yunifang is an old national brand that has accumulated over time. The reason why Huaxizi has become a dark horse in the beauty industry among such a large number of competitors, from being ignored to having monthly sales of 200 million, has an important influence on its choice to cooperate deeply with Li Jiaqi.

Data shows that from January to February 2020, 40% of the sales of Huaxizi flagship store came from Li Jiaqi's live broadcast room. Among them, several products such as air loose powder and embossed lipstick have become popular items on the entire network under Li Jiaqi's live broadcast and full-platform recommendations, with monthly sales of a single item exceeding 300,000 pieces.

There are also cases of failure. The DPC air cushion, which was previously made popular by Li Jiaqi, turned to cooperate with other mid-level anchors because they violated the promise to give Li Jiaqi the lowest price. After the "falling out", not only did the popularity of DPC drop greatly, but many consumers also had the impression that it was "untrustworthy".

Another company that had a failure in the live broadcast room was Pechoin. During the Double Eleven period in 2019, Li Jiaqi originally planned to jointly launch a set of products with Pechoin. To this end, he preheated the market in the live broadcast room many days in advance, and many fans were successfully attracted by the super low discounts. But when it was Pechoin's turn to go on stage, a voice was heard from off-screen saying "Pechoin can't come." After standing up 30 million customers, Pechoin was besieged and criticized by a large number of consumers.

Unlike the mistake made by the brand, when promoting the Joyoung soymilk maker, Viya once said "I want you to change your spokesperson", which caused misunderstanding and dissatisfaction among fans of Joyoung spokesperson Deng Lun, and then triggered heated discussions among fans of Wang Yibo, Xiao Zhan and Deng Lun on Weibo. Although both Viya and Joyoung officials later clarified the matter, it still left a bad impression on fans.

Perhaps, when brands use live streaming, this superior weapon in the era of traffic, they must also bear the huge risks and challenges behind it.

Data on sales share of several major Chinese cosmetics brands on various platforms from January to April (Source: ECdataway)

3. How to retain traffic after deep binding of the live broadcast room?

A sudden epidemic has cast a shadow over countless industries, but it has also added fuel to the already extremely popular live streaming e-commerce industry. CEOs appear on stage, celebrities become sales representatives, and offline shopping malls also begin to work hard to develop online live streaming channels... The live streaming sales track, where stories are becoming richer and richer, has entered the second stage.

"As brands have developed to this point, they should take the attitude of breaking down the barriers between business, brand, marketing and communication, and rebuild an ecosystem with users at the core. The traditional channel thinking should be iterated with traffic thinking. Brands, users and big data may be more valuable corporate assets in the future." The above-mentioned e-commerce observer told Zinc Scale.

Entering the live broadcast room is the first step for a brand to embrace the new scene. It is undeniable that brands such as Hua Xizi and Perfect Diary have indeed used sales to declare the correctness of this move, but failures are difficult to completely avoid. How to turn traffic into retention is also a major problem after marketing.

Brands that are active in live streaming rooms for a long time will leave consumers with the impression that "you can't buy without discounts", and other consumers will often ask questions on their product consultation pages such as "Which live streaming room is cheaper?" and "How much did everyone pay for it?" Faced with transparent channels and prices, these brands are becoming increasingly dependent on live streaming rooms, and naturally flowing in customers are often directed to the live streaming rooms rather than the brand’s fan base.

In this way, on the one hand, the deep binding between brands and live broadcasts of internet celebrities will make consumers more fascinated by a personality and story in addition to simple buying and selling transactions. Once this cooperation is broken, it will have a significant negative impact on both the brand and the anchor. Therefore, how to build a balanced and long-term good cooperative relationship is the key to maintaining one's personal image.

On the other hand, standardized R&D processes and supply chains are gradually lowering the production thresholds in various industries, but they have also brought about convergence issues. A beauty industry practitioner once publicly stated that "everyone's production difference is not that big. In addition to finding a good supply chain and formula, the greater competition lies in the insight into consumers." This also indirectly reflects that in addition to relying on the live broadcast room as an important sales channel, brands must also find ways to turn traffic users into loyal users.

Whether it is a national old brand or an emerging new force brand, it is easy to get a chance to become popular by using the wings of live streaming, but perhaps what they should think about more is how to convert traffic dividends into user assets? How can marketing methods be transformed into brand genes that are infinitely close to users and create real differentiation?

Author: Zinc Scale

Source: Zinc Scale (znkedu)