117 / 2024-04-20 20:02:50

Selling via Livestreaming: Shopping Experience Enhancement and Integration with Traditional Channel

Livestream Selling; Dual-Channel Management; Shopping Experience; Pricing

Abstract. Livestream selling is rapidly gaining prominence and has become an integral component of the retail industry. Many brands have embraced this new selling format by collaborating with influencers. Livestream selling has the advantage of enhancing shopping experience for consumers and capitalizing on influencers’ sway over consumers’ decisions. However, it also incurs costs for brands as a significant portion of revenues is allocated to influencers. In this paper, we study a brand’s adoption of the livestream channel, exploring strategies for integrating livestreaming with the brand’s traditional selling channel, and the role of a key advantage of livestreaming, i.e., shopping experience enhancement, in shaping the brand’s dual-channel management strategies. We formulate a game-theoretical model that incorporates several significant characteristics of livestream selling, including shopping experience enhancement, consumer base expansion, influencers’ strong pricing power, and limited livestream inventory. We find that when the livestream channel is added, a higher shopping experience enhancement may harm the brand as more consumers switch to buying the product through livestreaming; also, the brand can benefit from alerting its existing consumers in the traditional channel to upcoming livestream events because this approach can make more existing consumers buy the product; and the brand should lower the traditional channel price because this can reduce cannibalization effect and lure new consumers from livestreaming to make purchases through the traditional channel. Additionally, the brand is better off by introducing a livestream channel with either high or low shopping experience enhancement, rather than a moderate one. Our results provide valuable guidelines for brands when contemplating livestream selling.



Key words: Livestream Selling; Dual-Channel Management; Shopping Experience; Pricing