10 thoughts on live streaming sales in 2020!

Someone suggested that I talk about live streaming sales before, but to be honest, I have never spent a lot of time watching live broadcasts, and my thoughts on live streaming sales have always been scattered.

Several major events have occurred in the live streaming circle recently. First, on April 1, there was a live broadcast war among the three major platforms of Taobao, Douyin, and Kuaishou. Luo Yonghao made his first live broadcast to support Douyin, and Taobao's live broadcast queen Viya started selling rockets. Kuaishou Simba's female apprentice Xiaolu also publicly declared war on Luo Yonghao. This is known in history as the "First Live Broadcast War."

Afterwards, major events such as Viya selling houses live, Ctrip's Liang Jianzhang selling travel products live, and Li Jiaqi and Zhu Guangquan teaming up to form the "Little Zhu Peiqi" group, all triggered a series of discussions. The popularity of "live streaming with goods" remains high. Some people say that these major events have brought live streaming e-commerce to a new stage.

Today I’m going to organize my previous scattered thoughts on live streaming sales. They may not be correct, but I would like to discuss them with you.

01. The essence of live streaming sales is the "lipstick effect"

Many people are discussing why live streaming with goods is so popular now. There can be many reasons, such as the advent of the 5G era, the popularity of smart phones, etc. But I think that from a more macro timeline, the rise of "live streaming with goods" at this point in time is largely because the global economy has entered a new recession cycle.

Therefore, the essence of live streaming sales may be a "lipstick effect". The "lipstick effect" refers to an interesting economic phenomenon in which lipstick sales become hot due to economic depression, also known as the "trend of preference for low-priced products."

When people give up spending on expensive goods such as buying houses and cars, traveling abroad, etc., they will use their spare money to consume substitutes for those expensive goods - "cheap non-essential items", which is a substitution effect. This substitution effect is far greater than the income effect of reducing consumption due to reduced income, so the "lipstick effect" is produced.

As we all know, the average order value of live streaming sales is generally not high, and impulse consumption accounts for a large proportion. On the surface, the rise of live streaming sales is due to the popularization of smartphones and mobile payment as infrastructure, but in essence, we are all consuming "cheap non-essential items."

If you think about it carefully, isn’t the rise of live streaming of delivery of goods a bit of a coincidence against the backdrop of the global economic downturn?

02. Brands love live streaming because traditional marketing has become difficult

A while ago, there was a very popular term called "marketing link". Why do brands love live streaming to sell products? Because live streaming shortens the marketing chain to the greatest extent. Taking Li Jiaqi as an example, the live broadcast duration of non-beauty products is about 10 minutes. That is to say, from brand promotion, product introduction to ordering, the entire marketing chain is compressed to 10 minutes.

In contrast, under traditional marketing methods, users generally have to click on more than 20 ads before they can make a purchase, not to mention display ads that have no way of measuring conversions.

More importantly, in the era of "media decentralization", no channel can achieve the status of CCTV. From a macro perspective, the marketing chain that reaches users is long and wide. Even if the digital capabilities of online advertising are getting stronger and stronger, it is still difficult for us to determine which channel the purchase behavior comes from.

Traditional marketing has become difficult, and everyone is wasting advertising money. Who doesn’t like the simple and straightforward live streaming of products? Whether it works or not, the results will be immediate.

03. When Li Jiaqi and others promote products, is it the quality or the effectiveness?

The hot marketing word in 2019 is brand-effect integration. The purpose of marketing is nothing more than brand promotion and conversion effect. I had a heated discussion with my friends some time ago. When brands and top anchors cooperate to sell goods through live streaming, are they pursuing "quality" or "effect"?

It seems that this question is meaningless, because Viya and Li Jiaqi can sell out in minutes with just a call. If this is not "effectiveness", what is it? But I don't think so.

First of all, those who are chosen by top anchors like Li Jiaqi are basically top brands. The annual GMV of top brands is basically in the hundreds of billions or trillions of levels. In comparison, the 10 million sales brought by a live broadcast is really not comparable. But if the e-commerce department wants to achieve its own KPI, then finding Li Jiaqi is the safest and least brainstorming option. For many brands, "xx items sold out in x seconds" and "Same style as Li Jiaqi's" are good topics for communication.

Secondly, Li Jiaqi is famous for his strict product selection, which he claims to be "the best of the best." Regarding product selection, the following are Li Jiaqi’s original words at a sharing session:

First of all, we only choose products from Tmall flagship store and Tmall Global flagship store. At this threshold, the source and quality of the products are guaranteed to a certain extent.

In addition, we have a professional investment promotion team and QC quality inspection team for each category. They will collect and investigate the brand product information in detail in accordance with national policies and regulations, so they will conduct the first round of product screening.

Then the live broadcast core team will conduct a second round of product experience and trial. After passing the test, my assistant and I will try it ourselves. After we have tried all of them and confirmed that there are no problems, we will finally enter the live broadcast room for sales.

In this context, the top brands matched with the top anchors obviously have a stronger effect in promoting the brand and demonstrating strength.

Finally, from the perspective of brand public relations, the exclusivity of top anchors is also very important. The signing conditions of top anchors are harsh, and top brands often "sell goods at a loss." But even so, if you don't cooperate with Li Jiaqi, your competitors will come on the market. In this case, most brands with a budget will consider cooperation, after all, there are only a few top anchors.

04. It is best for brands to enter the live streaming market with two legs

The rise of live streaming sales has made almost all brands eager to try it out. Basically, there are two ways for brands to enter the live streaming industry. One is to continue to cooperate with different anchors and use anchors with different influences to reach different audiences.

The other is the brand’s own official live broadcast room. Many brands have begun to set up their own "live broadcast departments" and recruit and incubate their own anchors.

It is undeniable that the second method requires more investment, but I would recommend that brands that want to seize the benefits of live streaming should walk on two legs and explore more possibilities of live streaming.

In fact, there is a model in between the two. Last year, Taobao began recruiting live broadcast service providers to help brands that do not have the conditions for their own live broadcasts to enter the live broadcast sales market. For example, after the Dong'e Ejiao flagship store cooperated with a certain broadcasting agency, the number of people entering the store increased by 200%, the store gained more than 50,000 fans, the average daily increase of more than 120 fans, and the ROI reached 1:10.

05. Brand live streaming brings goods, let the boss go first

Recently, in addition to Luo Yonghao’s live broadcast, the live broadcasts of Fosun’s Guo Guangchang and Ctrip’s Liang Jianzhang have also been ridiculed by everyone as "adults putting aside their pride to make money, which is the greatest decency."

Although it’s a joke, I agree with one point very much. If a brand wants to invest energy in live streaming to sell goods, it is recommended that you let your boss try it first. As the saying goes, it’s easier said than done. Letting your boss know the advantages and difficulties of live streaming sales will help you carry out the next work, and you may even develop an internet celebrity IP by accident. To put it bluntly, when it comes to live streaming of product arrivals, the boss should take the lead. After all, who knows the advantages of his products better than the boss?

In fact, on Double Eleven last year, more than 100 presidents and executives entered Taobao's live broadcast room to sell goods. The president’s live broadcast should be something that the marketing department and the public relations department should work together to do. In the long run, it is also a way to shape the brand’s personality. Regardless of whether it succeeds or not, it is of great significance.

06. What is sold in a live broadcast is more important than who sells it

I always believe that there is only one prerequisite for live streaming sales, and that is price, or discount.

To put it bluntly, people who shop through live streaming are generally price sensitive. Are Li Jiaqi and Viya really good at selling goods? What if his price is not the lowest on the Internet? How many people will insist on buying it? Of course, the IP attributes of the top anchors are the reason why they can force brands and supply chains to provide price guarantees. This is their strength.

Another example is Lao Luo. The only topic left behind by Luo Yonghao's first live broadcast was probably "lower than Lao Luo". You see, even with a strong personal IP like Luo Yonghao, it becomes extremely difficult without the blessing of the lowest price on the entire network. Although there is no data, it is estimated that the return rate of Luo Yonghao’s first live broadcast should be quite high.

07. Lao Luo’s live broadcast marks the Three Kingdoms era of live broadcast sales

April 1st should be one of the most significant days for the live streaming industry. After Lao Luo announced that he would become a live streamer, Taobao, Kuaishou and Douyin all extended olive branches to him, and Douyin eventually snatched Lao Luo away with 60 million followers.

Douyin snatched Lao Luo, making the story more interesting. In the field of live streaming of goods, Kuaishou has always been the first to make efforts and has the strongest ability to bring goods. Top anchors such as Simba and Erlu have thoroughly developed the sinking market, and Li Jiaqi and Wei Ya, who were trained internally by Taobao, have also shined in the past two years. Tik Tok is the weakest of the three platforms. Before this, Tik Tok has always relied more on advertising revenue.

The emergence of Luo Yonghao gave Douyin an opportunity to compete with Kuaishou and Taobao. So from this perspective, Douyin needs Luo Yonghao more, and the price of 60 million is totally worth it.

The entire Toutiao system used almost all of its resources to help Luo Yonghao’s first live broadcast achieve 110 million transactions and 48 million views. Did Luo Yonghao succeed in selling the goods? He brought the entire live streaming e-commerce industry into the Three Kingdoms era overnight.

08. There are thresholds for live streaming sales, but there are also no thresholds

When live streaming became popular, the most popular saying was that there was no threshold to it. As long as you had a mobile phone and an internet connection, you could do live streaming. The same was true for live streaming with goods. All the tools and platforms you needed were ready for you.

But is there really no threshold to live streaming sales? Then there wouldn’t be so many “car rollover incidents”. During the live broadcast, Luo Yonghao's unfamiliarity with tools and brands, as well as calling Xgimi a "nut", are telling you that live streaming and selling goods is really a technical job. Internet celebrities may be able to do live streaming, but they may not be able to sell goods.

There is another interesting thing recently. LV launched its first live broadcast in the LV flagship store in Shanghai Henglong, focusing on the 2020 summer series of new handbags and ready-to-wear clothes. Zhong Chuxi and Cheng Xiaoyue served as the hosts.

No one expected that what LV would bring was such tacky scenery and live sales promotion with a rap-like style. LV is not the first luxury brand to fail. Luxury brands are clearly not ready to embrace digitalization.

I would not regard LV’s live broadcast failure as “intentional” by the brand. This can almost be considered as crisis public relations.

Previously, a photo of "Viya and Li Jiaqi in two years" went viral. After all, there is still a threshold for live streaming sales, and the threshold is not low. What you see is Li Jiaqi saying “OMG buy it buy it” in front of the screen, but you don’t see their private efforts. It’s not that they can sell things just by saying a few words to the phone.

09. Live streaming can sell rockets, but it can’t sell houses?

Taobao live streaming queen Wei Ya has also been involved in a lot of incidents recently. First, she sold rockets on April Fools' Day. This incident attracted a lot of attention because it indicated a greater possibility of selling goods through live streaming.

If you pay attention to the cause and process of this incident, as well as who sold and bought the rockets, it is obvious that this was a public relations event promoted by Taobao Live officially.

Among the crowd who were discussing and paying attention to Viya selling rockets, few people even figured out what Viya was selling. In fact, what is sold in this live broadcast is rocket launch services and brand services, including mission naming, rocket body and launch vehicle body advertising. Buyers can go to the site to watch the launch in person. It's not about buying the rocket itself. Even if you want to carry items on the rocket, you still need strict approval from relevant departments.

The company that took the photo of the rocket is Jilin-based Chang Guang Satellite Technology Co., Ltd., which has successfully launched 19 satellites and built my country's largest commercial remote sensing satellite constellation.

The day after Wei Ya sold rockets live, Wei Ya also started selling houses live. In fact, what was actually sold were equity certificates priced at 521 yuan, which could be refunded at any time. Ultimately, more than 600 equity coupons were sold, and more than 200 were refunded within one day.

Before this, Wei Ya also tried to sell Rolls-Royce through live broadcast. Although the discount was more than 1 million, in the end, not a single car was sold. The Rolls-Royce Phantom Extended Edition became Wei Ya's lowest-selling product.

So my point is that the essence of live streaming sales is due to the "lipstick effect", and houses and cars are ultimately not "cheap non-essential items". Those who really buy houses, cars, and rockets in the live streaming room may just be buying a "topic".

10. Selling goods is not the only answer to live streaming

Zhao Yuanyuan, the former head of Taobao's live broadcast operations, held several live broadcasts during the epidemic, and I also listened to a few of them. What was interesting was that during the live broadcasts, listeners often asked questions, "I sell xxx, how should I do a live broadcast?" They even asked about many products I had never heard of. I suddenly realized that they really didn't know how to promote their products.

Perhaps selling goods is the best result of live streaming, but it is definitely not the only answer. The essence of live streaming is a new channel to engage with users. For certain To B products (such as commercial dishwashers), niche products (such as fertilizers), and products with low frequency of use (such as confinement centers), establishing connections with users may be a more important task of live streaming.

During the epidemic, we have seen many new forms of live streaming, such as cloud disco, cloud tourism, cloud flower viewing, and cloud museum visits... If you also want to try live streaming, you may want to put the words "bringing goods" aside first, and let live streaming become a part of the user experience. Then, bringing goods may become a natural result.

Related reading:

1. Short video live streaming sales skills

2. A brief discussion on the rules of Kuaishou live streaming sales

3. 10 Trend Predictions for Internet Celebrities/Live Streaming in 2020

4. New methods of selling products through live streaming in 2020, strategies for selling products through short videos!

5. Self-help guide for “live streaming sales”

Author: Jun Xiaobao

Source: Jun Xiaobao