The golden combination strategy for live streaming sales

Live streaming sales are in full swing, how will this industry develop? What new adjustments are those ahead of the curve making? Are there any new pitfalls to avoid? What strategy is best to use on which platform?

The answers to these questions can be found or referenced in a newly released report. In the past few days, Weibo released the "Evolution of the Live Streaming E-Commerce Ecosystem: 2020 Live Streaming E-Commerce Development Trend Report", which not only describes the current situation of live streaming with goods in detail, but also focuses on discussing key topics such as the analysis of live streaming with goods on major platforms, the golden marketing combination strategy of live streaming with goods, insights into the industrial chain and its key links, and trend outlook.

To facilitate reading, the contents of this report are organized under 10 issues of concern to the industry. You can think about your own strategies while reading the report. As follows, Enjoy:

Recently, Kuaishou and Douyin have introduced celebrities and entrepreneurs to create momentum, and professional live streaming hosts have also joined the market. The live streaming industry seems to be moving towards a new situation. What is the live streaming e-commerce industry chain like, and what platforms and links are involved?

From the supply side and the demand side, it is mainly divided into the supply chain end and the traffic end. The upstream supply chain end is on the source side, including wholesalers, brands, distributors, factories, etc. They are diverted downward to e-commerce platforms and short video live broadcast platforms, and finally output to users through content, stores, etc.

The process involves multiple parties and is quite complicated. The participants in the entire ecosystem can be seen through the map.

The Code of Conduct for Online Live Marketing came into effect on July 1. In addition to policies, the landscape of live e-commerce itself has also changed. What are the new changes for live broadcast participants?

Live streaming e-commerce is becoming more and more popular, and the choice of platforms and anchors is no longer as simple as in the early days, and there are differences in the selection methods.

The value that each anchor can bring to the brand is also different. For example, celebrity endorsement is for traffic and to increase brand awareness; entrepreneurs themselves say that they are more pursuing brand quality and brand value; professional anchors help product features penetrate better.

From entering the market blindly to facing up to the results, brands have gradually found the original intention of video marketing during the trial and error process . The long-term integration of brand and effect has allowed brands to regard live streaming e-commerce as a key link in the marketing chain, rather than all in at the initial stage.

Ultimately, the entire ecosystem has gradually matured from a focus on experience-based delivery to efficient delivery guided by technology and data, and from simply pursuing exposure, sales, and live broadcast room topics to paying attention to professional perspectives such as the professionalism of the anchor, product quality, and commodity supply chain .

The supply chain of Viya and Simba mentioned the matching relationship between people and goods. Is it possible to match goods with people as the core?

When people look for goods, the main approach is to replicate a sustainable model by top anchors. For example, the “super supply chain platform” built by Wei Ya has a rich variety of goods, allowing anchors to select products and brands based on the characteristics and feedback of their fans. This approach creates a new ecosystem of two-way matching based on meeting user needs.

However, compared with the overall ecosystem of live e-commerce, this approach is too narrow in scope, and based on the insufficient number of anchors, it is not friendly to brands. This state may gradually develop and mature in the future, and it will also require greater capital and platforms to promote it.

At present, goods finding people is still the core model of live streaming e-commerce. How to choose people who can communicate with users (KOLs) is the key link. The products provided by brands reach users through the content produced by KOLs, thereby forming purchasing power. Therefore, data delivery becomes particularly critical. The right KOL can accurately reach the target customer group and improve the marketing conversion rate.

So at present, for anchors who sell goods, how can they optimize the supply chain?

The construction of a flexible supply chain will be the biggest driving force for the continued development of live e-commerce.

For live streaming e-commerce, high-quality goods are an important resource for maintaining user loyalty and ensuring that live streaming e-commerce hosts continue to sell goods. Hosts with flexible supply chain capabilities can respond quickly to fan needs and gain recognition from consumers by reducing intermediate price increases and de-branding, and launching cost-effective products.

As mentioned earlier, not all anchors have the ability to build their own supply chain system, so according to the individual anchor's resource system, there are two optimization methods:

1. High-quality external brand supply sources: ① Including e-commerce platforms, merchants, brand owners, etc. If resources are limited, you must rely on high-quality trading platforms. For example, Weibo has deep cooperation with high-quality brands in various industries such as beauty, footwear, daily chemicals, and technology. It can help KOLs quickly connect with brands and provide stable brand cooperation opportunities; ② The price of selling goods is lower than most other channels. Improve your own professional capabilities, including content construction, professional content production, understanding of products, etc., and improve your own business capabilities through vertical and professional content.

2. High-quality factory resources or sources of goods: For top anchors, ① build their own brand; ② achieve scale, disintermediate and reduce channel costs, and improve logistics and distribution efficiency and accuracy. Improve overall control over products.

As live streaming has developed to date, how do you view the two terms "live streaming brings disaster" and "live streaming brings disaster"?

With the influx of entrepreneurs, celebrities, and various platforms, live streaming has become all the rage. Big data monitoring by the Ministry of Commerce shows that there were more than 4 million e-commerce live broadcasts in the first quarter of 2020. Most brands pay more attention to short-chain digital transformation. The brands’ extremely demanding pursuit of sales figures is a reflection of the anxiety of various industries.

Eventually, five chaos emerged: confused strategy, eagerness for quick success, blind live broadcast by all employees, superstition about self-media, and false propaganda.

The boom period of media forms has always been a double-edged sword. The opposite side of the highlight of live streaming is the voices of "bloody loss", "ineffectiveness" and "scam" that cannot be ignored. The extremes of both positive and negative sides, and the prominent contradictions of the "sorrow" of live broadcasting, have also brought about new rectification of the industry and a new integration of various media forms.

Amid the changes and problems, what guidance and suggestions can you give to brands entering the live streaming industry?

During the execution of the live broadcast, two sets of contradictions emerged:

1. The goal is to sell products, hoping to make money, but you keep losing money. Although they are chasing after celebrities with high traffic, the final live broadcast sales are less than half of the slot fee. The brand is losing money and it is difficult to make any profit.

2. The goal is to enhance the brand, but the long-term discounts and lowest prices during frequent live broadcasts have led to price disorder for products across the entire brand and industry. Users are indifferent to full-price sales, and the conversion rate for full-price sales is extremely low, which has caused great damage to the brand.

Therefore, building a diversified system of anchors to sell products and using short video platforms to deeply promote products and quickly reap the rewards through live streaming has become the only way to win the brand war.

The method of short video promotion + live streaming sales was mentioned. The investment will be greater. How to optimize it?

First of all, short video promotion + live streaming sales are a natural complementary pair. It not only meets the early stage of product content penetrating into the user's mind and influencing the user's purchasing decision, but also meets the short-term benefits of price reduction promotions, discount activities, etc.

Calculating the input-output ratio is more scientific than simply looking at the input, and brands need to continuously optimize the input-output ratio when doing video marketing. As mentioned earlier, in the era of data-driven short video distribution, accurate matching of influencers is a key link.

In addition, anchors who generally have the ability to continuously bring goods must have the ability to promote content and convert live broadcasts. Fans, content professionalism, and live broadcast conversion capabilities are all indispensable. Taking Li Jiaqi and Wei Ya as examples, cross-platform operation is the most basic channel means. According to different platforms, short video content such as emotional resonance, good product recommendation, and professional depth are formed, which adds value to individuals in many aspects such as word-of-mouth sedimentation and traffic accumulation, thereby promoting the conversion power of live broadcast.

In addition to the top KOLs, we also always see "unknown" KOLs with strong sales capabilities, mainly concentrated in the middle and lower KOLs in vertical categories with e-commerce genes. They are comparable to the top KOLs in word-of-mouth promotion and sales conversion.

The anchor’s e-commerce GMV is the result of a combination of factors, including:

(1) Fans’ positioning of the anchor’s “e-commerce” gene attracts very accurate fans, with a high transaction conversion rate;

(2) The anchor has obvious advantages in his or her profession and circle, with professional content, strong creative ability, and strong word-of-mouth;

(3) Supply chain capabilities determine the product’s cost-effectiveness, the fan repurchase rate , and the e-commerce monetization value of a single fan.

At the same time, in addition to mature anchors and Internet celebrities, the emergence of new roles in the Crazy Live Room is also changing the overall pattern, but different sellers have different performances under the maturity of different products, which are manifested in three major levels:

Match cost-effective live broadcast strategies according to the different current situations of the brands.

What kind of goods are easier to move? What are the methods and strategies used by anchors to select goods?

People and goods are often inseparable. For mature anchors, not all products will be accepted. The anchors' requirements for products are also the basic requirements of the brand for the goods in their own live e-commerce.

Live streaming with goods is a comprehensive and tough battle. Brand maturity, product price, matching degree of the KOL who sells goods, promotion strength, influence of the KOL who sells goods, team coordination ability, live streaming time, after-sales service, etc. all affect the conversion effect of live streaming with goods. Among them, the goods and price themselves are the biggest factors affecting the conversion rate.

Judging from the categories of live streaming hits, food and beverages, clothing/shoes and boots, beauty and personal care, and household daily necessities are the top categories to be bought. Among them, fast-moving consumer goods such as food and beverages have high repurchase rates and unique selling points, so a strategy of planting grass is very necessary; and new and unique products with interesting/healthy features are also likely to become hits. In short, rigid demand + massive inventory + products priced under a hundred yuan are easy to be ignited.

From the perspective of platform selection, Taobao Live is preferred for clothing matching, personal care, food, mother and baby, etc., while Douyin is the focus for trendy daily necessities, popular clothing, and Internet celebrity snacks. Kuaishou is preferred for trendy white-label products and domestic personal care products that are close to the supply end, and Xiaohongshu is a must-go for beauty and fashion.

Judging from the merchandising strategy of the live broadcast room, a variety of styles are combined to create a successful live broadcast, from low-priced models to high-traffic best-selling models, to high-profit models with strong supply chain advantages.

From the perspective of the anchor’s product selection strategy, understanding fans’ needs and getting the lowest price on the entire network are the most important. In addition, a comprehensive understanding of brand characteristics and possession of supply chain advantages, ensuring one’s own profits while ensuring quality are the basic guarantees for sustainability.

Are there any golden rules that can help brands launch products and create hits?

Content (people), channels, and products are all indispensable. Build a complete live broadcast system through different platform gameplay and strategies. At this stage, all companies are doing live streaming. Entry is no longer the most important thing. The most important things are how to enter, what method to use to enter, and what are the advantages compared to competitors after entering.

Every product has its own path to success:

1. Understand the product attributes and face the product's positioning in the market

2. Find people who are talking to users through data analysis

3. Match channels and integrate marketing environment

The model of short video seeding + live streaming has more regular patterns in the promotion of new products: short video seeding accounts for "7%" in the early stage, and live streaming accounts for "3%" in the middle and late stages. Through sufficient content influence and promotional gimmicks, a continuous harvest can be formed in a cycle.

In the next stage of live streaming e-commerce, what new changes will there be in terms of format, brand, and anchor?

The GMV of live e-commerce is growing rapidly, and it has the advantages of strong experience, low customer orders, and fast conversion. In 2020, brand attention and budgets are shifting towards short videos and live broadcasts. It is in a period of rapid penetration in popular tracks, and dividends continue to be released.

1. From the perspective of brand awareness, branding is the long-term development direction, and influencers are showing a trend of diversified development. Currently, live streaming e-commerce is still in its early stages of development, with most of the products being white-label, low-priced goods. However, branding is the right way to go. Specifically, traditional brands are using live streaming to expand their business to lower-end markets, while a group of expert brands and origin brands are emerging.

2. From the perspective of live broadcast formats, in addition to the currently popular celebrity live broadcast rooms and entrepreneur live broadcast rooms, the era of variety show sales 2.0: the era of large-screen entertainment and small-screen sales linkage model is coming. Not only is there a new model of live streaming selling goods in variety shows, but it is also a complete integration of live streaming and variety shows. Amid the cross-border craze, cross-screen development is also becoming a new means.

3. From the perspective of product digitalization, the evaluation and feedback of short video KOLs is a key link in the brand's digitalization process. According to user needs, the brand can improve its control over goods, constantly accept market voices, and advance from smart delivery to delivery intelligence.

4. From the perspective of digital delivery, improve efficiency and effectiveness in dynamically unbalanced platforms, fragmented content, and KOLs with explosive growth in base.

5. From the perspective of digital effect, analyze the key indicators that determine ROI, lock in the best delivery resources and influencing factors, and find the data characteristics of the best delivery type based on the impact of various delivery elements, such as daily account performance data, account audience data, etc. on KPI, as well as the effect differences between the performance values ​​of each element.

In the eyes of most brands, live streaming e-commerce is more about form than content, and is only perceived as something that "others have it, so I do it too." But in fact, driven by new brands, early players, and platforms, live streaming e-commerce is opening a new chapter. The live streaming boom has not passed, but luck is no longer enough to support brands and catch this trend.

Related reading:

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Use the buying volume mindset to sell goods through live streaming!

Ten thousand words reveal! The secrets of making money behind live streaming sales by influencers

The traps of live streaming sales and the skills of live streaming sales by celebrities!

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