The gameplay and routines of live streaming sales

There is a saying that goes: Wherever capital flows, there is hot land. Because capital has the most sensitive sense of smell, they will definitely go to emerging industries with the highest returns, resulting in a phenomenon of clustering. Just like capital, the direction of the enterprise is also the same. The enterprise will turn to where the hot land is.

Just like in the first half of the year everyone was discussing private domain traffic and recruiting community operators. At that time, private domain traffic was hot territory and everyone was trying to get into it. In the second half of the year, a business that had been dormant for many years took off because of its combination with e-commerce. This business is live streaming. After connecting with e-commerce, a new way of playing emerged: live streaming with goods . It is expected that live streaming e-commerce will be a traffic depression in the second half of 2019 and early 2020. By the second half of 2020, the bonus will disappear, and the depression will be filled, entering a red ocean where competition will be fierce.

This article will analyze the new traffic pool, the gameplay and routines of live streaming sales from the following four aspects.

What is live streaming?

Who are the participants in live streaming sales?

How to sell goods through live streaming in e-commerce

The future of live streaming

1. What is live streaming?

Live streaming sales refers to the model of selling goods through live video streaming platforms. Currently, the main platforms for selling goods are Taobao, Kuaishou, and Douyin. E-commerce platforms such as JD.com, Pinduoduo, and Youzan have also begun to test the waters for selling goods through live streaming.

The reason why live streaming with goods is currently a traffic depression is because the current stage of live streaming with goods is very similar to the early days of Douyin and official accounts. If you recall carefully, in 2018, Douyin and 2014, you could increase your followers by creating any content. But now, talking about increasing followers is as difficult as climbing to the sky. Today's live broadcast rooms are just at the stage of attracting fans, and following the live broadcast rooms to get gifts and sending vouchers is the current mainstream way of playing.

The era of competition among many players is beautiful, which means that the user's ownership has not yet been settled. Why can the top live streamers sell goods worth tens of millions in one live broadcast? Ultimately, it is determined by the relationship between supply and demand. For example, there are 1 million live broadcast users in the market, but there are only 10 broadcasters, and each of them can get 100,000 or even higher traffic. If a broadcaster has 1 million followers, you can imagine how fierce the competition will be.

As long as supply is less than demand, it is a bonus period and a traffic depression. During this period, a large number of players will enter, and it depends on who acts faster. When supply and demand are balanced, it will be too late to enter the market. If you see this article, then congratulations, now is the right time to act.

2. Who are the participants in live streaming sales?

There is a complete chain for live streaming sales, and the roles involved include: platform, e-commerce company, live streaming organization, and resource integrator.

Platform: The platform refers to the live broadcast platform. Live broadcast is not a new thing. It has been around since 2016, but the first year of live broadcast sales started in 2019. This is easy to understand. The initial way to monetize live broadcasts was through rewards. Rewarding is like recharging a game, it has a life cycle and can be understood as unsustainable. Once the novelty wears off, people will no longer spend money on rewards. Then live streaming must find a new profit model, otherwise the live streaming model will fail.

At this time, the emergence of live streaming e-commerce can be said to have saved live streaming and even reshaped it. I speculate that real live streaming will start with the popularization of 5G in 20 years, just like real short videos started with the rise of TikTok. The technology and market are immature, and all pioneers are cannon fodder. It depends on whether the responsibility of becoming the dominant player will fall on Taobao or Kuaishou.

E-commerce companies: E-commerce companies are the core players, beneficiaries, and financiers of live streaming e-commerce. Taobao’s success is inseparable from the millions of sellers across the country. In addition, the price of Taobao traffic has skyrocketed in recent years, making it increasingly difficult for merchants to afford it, forcing them to look for cheap traffic outside.

On Double Eleven 2019, Taobao Live’s one-hour transaction volume exceeded the one-day sales volume of live streaming on Double Eleven last year. It points out a new direction for every business: let’s do live streaming. Live streaming brings traffic, conversions, and profits. Whether it is a store with annual sales of over 100 million yuan or a small couple-run store that has just been launched on Taobao, they have all started their own live broadcasts or hired internet celebrities to do live broadcasts. There is only one goal: to sell more goods.

Live streaming organization: Live streaming organization refers to the organization that incubates live streaming internet celebrities like Li Jiaqi. We may only know Li Jiaqi, but we don’t know about the thousands of live streaming organizations of all sizes that have sprung up like mushrooms after rain in the second half of 2019. Some of them have transformed from MCNs, while others have directly recruited internet celebrities to sell goods through live streaming. Each has its own way of playing, but they are all being trained in the direction of selling goods.

Recently, there have been many training courses on live streaming sales, which shows how many people want to enter this industry. What should I do if I don’t understand and don’t know how to do it? Go to the class first, and you will be able to do it after the class. It will be another fresh crop of leeks waiting to be harvested.

Resource integrator: On one side is the live streaming influencer organization, and on the other side is the e-commerce seller. The two gears may not necessarily fit together. This gave rise to resource integrators, or intermediaries. On the left hand, there are a large number of internet celebrity resources, and on the right hand, there are some manufacturers who want to spend money on promotion. Make a profit from the price difference, so easy.

3. How can e-commerce companies sell goods through live streaming?

Now let’s get to the point. When we study live streaming e-commerce, we ultimately have to look at it from the perspective of the main participants in the game: the sellers. There are less than ten platforms and at most a few thousand internet celebrity organizations, but there are indeed tens of millions of sellers of e-commerce products. Every e-commerce seller needs to sell goods and also has the need to sell goods through live streaming. So, how do e-commerce companies sell goods through live streaming?

Method 1: Build your own live broadcast room and cultivate your own live broadcaster

Advantages: low cost, strong controllability, and the mainstream approach of e-commerce. Half of the e-commerce companies participating in Double Eleven have set up their own live broadcast rooms. Those who broadcast live in the live broadcast room are ordinary employees. There is a snack food company that has two anchors on each live broadcast, rotating every 4 hours, with one live broadcast per day. Suppose a company has 4 employees who are dedicated to live broadcasts, with a base salary of 5,000 yuan per month plus commission. The cost is more than 20,000 yuan a month, which is much more cost-effective than placing an advertisement once.

When building your own live broadcast room, remember to downplay the host’s personal characteristics and highlight the brand’s characteristics. We want users to come for the brand, not for the anchor. In this way, even if the anchor resigns or is replaced, it will not affect the fans. During a live broadcast of an e-commerce product, users kept asking, when will Miss So-and-so go online to sell products? This is a very dangerous signal and must be eliminated immediately.

It may be a bit difficult for traditional enterprises to set up live broadcast rooms, after all, some companies have almost no online operation capabilities. But if you change your mindset, just think of it as moving sales from offline to online. The masters of live streaming sales are not those who are good-looking or multi-talented, but those who have strong sales capabilities. Let me ask you, which company doesn’t have a few sales champions? Let them sell the products online and they will still sell well.

Disadvantages: low traffic and poor sales effect. Live streaming sales is a new thing and everyone is trying it, but few are successful. One reason is that they are not familiar with the platform rules and don’t know how to gain traffic and attract attention. The second is the lack of sales skills and inability to lead. Risks and opportunities coexist, it all depends on the company's operational level.

Method 2: Find an influencer to promote your product and pay for it

Advantages: quick results, sold out in minutes. This is something that e-commerce companies with advertising budgets do, and paid promotion is a science. It is not difficult to spend money, but the difficult part is to get the money back and make a profit. We have seen live streaming sales of goods, with tens of thousands of lipsticks sold in one show and millions of dollars in transactions. These are individual cases and are not representative of the situation. Normally, achieving a 1:1 input-output ratio is already very good. It is normal that you cannot get your investment back. You have to know that not all products can be sold by anchors.

When we are looking for an anchor to promote our products, we must find out clearly whether the anchor has promoted our type of products before and what the results were. For example, live streaming sales of electronic products is basically a losing business. The best products for live streaming sales are skin care products and fast-moving consumer goods. Other than that, if the target users are not accurate, even the biggest names in live streaming will not be able to sell them.

There are two ways to cooperate with experts: one is to only charge a slot fee, and the other is to charge a slot fee plus a commission. Now there is a cooperation model that charges purely based on commissions, but the points are not quite the same as we imagined. I talked to an organization that cooperates with them on a commission settlement basis, and they gave me a rebate of about 50 points, which is totally unsuitable for ordinary products, except for those high-profit products with super high profit margins. What kind of internet celebrity you look for depends on your products.

Disadvantages: high investment and no guaranteed effect. Since it is a promotion, it is certain that you will spend more money. Especially at a time when the live streaming e-commerce market is still not very transparent, there are many cases of inflated prices and falsified data. Do you remember the case of a big V with millions of followers who had zero transactions? Buyers are never as smart as sellers.

4. The future of live streaming sales

To give my personal opinion, the future of live streaming e-commerce may be bright, or it may just be a small hot spot. If the live streaming e-commerce model is a rigid demand, just like socializing, taking taxis, and eating out, then live streaming e-commerce will become a standard feature of businesses and will be enough for them to survive for decades. The future will definitely be bright. Maybe it will even go offline and be broadcast in real time in stores, playing the role of a physical store salesperson.

If the act of selling goods through live streaming is the same as the initial reward, which is just for the sake of novelty, and users no longer have the urge to watch live broadcasts and place orders after a long time, then selling goods through live streaming will just be a short-lived hot spot. We should not be led astray by temporary false prosperity, just like the shared bicycles before, how many people thought it was the future. However, history has proven that this is just a game of passing the parcel.

The biggest variable in live streaming sales is 5G. After the arrival of 5G, the clarity of the video will be greatly improved. At that time, the experience of live streaming sales will be completely different. When watching Taobao live broadcasts, the clarity of the picture quality in the live broadcast room of the number one anchor on Taobao is much higher than that of ordinary companies' live broadcast rooms. This can be considered as the Matthew effect. It is still difficult to draw a conclusion on how live streaming e-commerce will develop in the future. But since this is a traffic depression, it is better to strike first.

Author: Tiger Talks Operations

Source: Tiger Talk Operations