In preparation for Double Eleven, what is the underlying logic behind live streaming anchors’ product selection?

With less than a month to go before the annual Double Eleven battle, all relevant links have entered a state of "combat readiness". Of course, the word live streaming cannot be avoided. Nowadays, when we talk about live streaming to sell goods , I believe everyone will be familiar with it. After experiencing the rapid development brought about by the emergence of Li Jiaqi and Wei Ya in 2019, and the accelerated surge in black swan events at the beginning of this year, related topics such as celebrity live-streaming debuts, corporate presidents’ live-streaming self-rescue, etc. have become frequent hot searches, dominating everyone’s attention.

Since its launch in 2016, live streaming e-commerce has become a "national sport" in just over three years. Its development is actually inevitable.

On the one hand, in the era of mobile Internet, the popularity of smart phones, 4G networks, and now the development of 5G have greatly improved the convenience of users' web browsing.

On the other hand, users have already developed the habit of mobile online shopping. According to statistics, in 2019, more than 707 million netizens shopped via mobile phones, accounting for 78.9% of mobile phone netizens. Compared with pictures, texts, short videos and other media, live streaming can display products in a more comprehensive and three-dimensional manner. Through the host's explanations and recommendations, it can achieve a companion shopping experience without leaving home. Users can buy while watching, with strong real-time interactivity.

By breaking through the limitations of time and space, live streaming has become a vehicle with greater advantages in bringing goods.

As the trend of the industry becomes increasingly fierce, competition in live streaming e-commerce is bound to become increasingly fierce. Take Taobao Live as an example. In 2019, the platform gave birth to 177 anchors who sold goods worth over 100 million yuan. Behind this is the demand for hundreds of billions of goods quantity, product quality, and product service guarantee.

Today, we would like to talk about the underlying logic followed by "goods" among the three elements of "people, goods, and place" in live streaming e-commerce?

1. Four dimensions of live broadcast product selection: brand + product + price + user

In live streaming sales, not all products can enter the live broadcast room. Many merchants have revealed that the product selection rate of some top-stream anchors generally does not exceed 5%. Anchors often form their own relatively fixed product selection ratio. In an interview, Huang He, CEO of Jiao Ge Pengyou, summarized a product selection rule for Luo Yonghao's live broadcast room: food accounts for about 30% of a live broadcast, daily chemicals and daily necessities account for about 30%, digital home appliances account for 20%, and new and unique products account for 20%.

Looking into the underlying logic, when selecting products, anchors usually consider four dimensions: brand, product, price, and user . They also arrange the order of product broadcasts according to the rhythm of the live broadcast, and ultimately determine which categories of products, such as traffic-generating products, best-selling products, profitable products, and specialty products, will enter the live broadcast room.

First of all, when selecting at the brand level, anchors usually consider three aspects: brand awareness, brand origin, and brand supply chain . High-profile brands can increase the volume of the live broadcast room and have a traffic-attracting effect; products with regional characteristics, such as fruits, are often affected by their place of origin. A complete brand supply chain is the basic guarantee to ensure the smooth operation of products from pre-sales to after-sales.

From the product level, within the two major categories of standard products and non-standard products , anchors often hope to have a richer and more diverse product portfolio in their live broadcast rooms. For example, the same live broadcast may include new products, hot-selling products, and inventory products . New products can exist as featured products, hot-selling products as profit products, and inventory products act as hook products to attract customers at low prices.

When live streaming e-commerce was just starting out, standard products were more popular among anchors. Clearly marked prices reduced the difficulty of live streaming to a certain extent, and user purchases were more dependent on the product itself. As the industry gradually matures and the professionalism of anchors improves, non-standard products with high unit prices and low repurchase rates are gradually increasing in live streaming sales. For example, expensive jewelry and jadeite have become a billion-level market in the live streaming industry that cannot be underestimated.

Note: From left to right are Douyin Live, Kuaishou Live, and Taobao Live

From a price perspective, low prices are recognized as the best way to attract traffic. The anchors often hope to use price differences or greater discounts to attract users. In addition, they may also use gifts, gift packs, etc.

From the user's perspective, when the anchor recommends products, there is also a distinction between products with urgent needs and products with non-urgent needs. They will select products based on their fans' user portraits, usage scenarios, consumption capabilities, interests and hobbies, etc.

Taking Wei Ya’s latest daily live broadcast as an example, there were 38 products in total in the live broadcast, and the proportion of products in each price range was almost the same. These include the internet-famous low-fat sweet potato, dried sweet potato and yam at 19.9 as hook products, as well as the same Ordos cashmere sweater as Liu Wen, priced over 3,000 yuan, to enhance the brand value of the live broadcast room. The quantity proportions of products in the price ranges of 100-300 yuan, 300-500 yuan, and 500-1,000 yuan are consistent, and the commodity price structure is balanced.

Data source: Zhigua Data

In addition, Viya’s live streaming sales started with clothing, and gradually expanded to various categories. Today, a stable product selection strategy has been formed. However, based on considerations of fan attributes, in today’s product distribution, women’s clothing/ladies’ boutique products still account for the highest proportion.

2. The influence of anchor and brand maturity on live streaming sales performance is very different

There are huge differences in the effectiveness of live streaming sales among anchors with different influences and brands with different levels of maturity. They can be mainly divided into four categories:

1) Product effectiveness = high visibility/social popularity + top anchors, such as Li Jiaqi + Perfect Diary; 2) Product effectiveness = low visibility/social popularity + top anchors, such as the popular products recommended by Wei Ya; 3) Product ineffective = low visibility/social popularity + employees/shopping guides/tail anchors, such as shopping guide live broadcasts in shopping malls; 4) Both product effectiveness and high visibility = high visibility/social popularity + mid-level anchors, such as Li Ziqi snail noodles + Meike Food (Taobao live broadcast, number of fans: 64,800), with a GMV of over 300,000.

3. Future development trend of live e-commerce “goods”

Live streaming e-commerce is in a stage of rapid development, and anchors and users are becoming more and more picky in their choice of "goods". A few days ago, Taobao Live officially held a "Double 11 Anchor Product Selection Conference" to meet the anchors' higher requirements for product quality, cost-effectiveness and other aspects.

In the future, the “goods” in live e-commerce will show the following trends:

1. Everything can be broadcast live, and the penetration rate of non-standard products is gradually increasing.

With the development of live streaming e-commerce, our stereotypes about products have been broken. Categories that could only be sold offline in the past, such as cars and real estate, now have more possibilities. Viya has already sold rockets, so what will happen next time? We can boldly use our imagination.

2. Goods are standardized and anchors form their own product selection strategies.

As the industry continues to mature, local governments will introduce relevant support and planning documents, and all aspects including "goods" will be standardized. Nowadays, the top anchors who have concentrated resources have already formed a unique product selection methodology, which will also serve as a model for small and medium-sized anchors.

3. Product and effect synergy makes it more rational for products to enter the live broadcast room.

The selection process between anchors and products is a two-way process. After the initial trial, brands have a more intuitive understanding of the impact of live streaming on product quality and effectiveness, and will be more rational in choosing live streaming rooms. To a certain extent, it also plays a positive role in promoting the industry.

Author: Facing

Source: Mianchaoyjy Research Institute