Explosiveness and crisis, where will the future of live streaming go?

In recent years, live streaming has become very popular, but it has also experienced various crises. This article deeply explores the operational logic behind live streaming from the perspective of the essence of live streaming evolution and the trend of Dabo, and proposes methodological suggestions for brand live streaming. It is recommended for students who are interested in the live streaming e-commerce industry.

In August this year, Yu Rui talked about the risks and problems of Douyin influencer live streaming in Douyin influencer live streaming: outbreak, chaos and crisis. As expected, during this year's Double Eleven, there were fights between top influencers, between influencers and platforms, and various live streaming failures, which even surpassed battle reports and became the hottest topic in the industry.

Faced with the increasingly complex situation of the entire live broadcast industry and the situation of multiple interests competing, as brands and marketing operators, it is necessary for us to further explore the essence and development trends in order to correctly formulate the brand's live broadcast strategy.

Therefore, today's article will further explore live streaming and sales, divided into three parts:

1. The essential issues of live streaming evolution
2. The evolution of Dabo's trend
3. Strategies and methods for brands

1. The essential issues of live streaming evolution

It is a consensus in the industry that live streaming is difficult this year.

A few months ago, a live streamer came to us to discuss cooperation. He liked a product. I said that this product was not good. The platform was very strict and I couldn't lower the price. Moreover, the gross profit was not high and I couldn't give you the commission rate you wanted. He said, "Then make me a customized version of this product. Just change it casually, change the packaging and name, and double the price. I am confident that I can underwrite 100,000 units for you."

We didn't agree, thinking it was too unreasonable. Later, I thought that Huaxizi actually had the same logic, except that it was not customizing products, but reverse customization of the entire brand.

This model ultimately hurts consumers, who seem to be getting a bargain, but actually pay the price. The fundamental reason is:

Brands want to rely on live streaming to achieve growth while maintaining profits, and they cannot cut prices and offend other platforms. It seems that there is only one way: to make changes to costs and quality control.

In fact, at the beginning, the game was not so intense. Live streaming by experts is a two-sided game. It can be done as soon as the anchor and the brand hit it off. For the anchor, it is just the right time for the platform to promote the anchor, and they can start broadcasting as long as there is profit; for the brand, the discount and commission account can be calculated, and it was given the name of "integration of brand and effect" at that time. Compared with other placements, it has exposure and ROI promise. The industry applauded and shouted that a new marketing model has come, which guarantees that "half of the advertising fee" will not be wasted again.

However, as the pie gradually grew and the number of stakeholders increased, it began to evolve from a bilateral game to a multilateral game.

First, more and more anchors and brands are pouring in: with more anchors, the cost of getting traffic has increased, and with more brands, the price has to be raised again and again. In the past year, to be on many live broadcast rooms, not only the commission and price mechanism are required, but also the brand side has to buy traffic to feed the live broadcast room. Commission + slot + price reduction + gifts + traffic, the cost has increased significantly.

Secondly, the tug of war between different platforms has also come into play. Ever since Taobao and JD.com began to vigorously promote the low-price mentality, they have been keeping a close eye on the Douyin anchors all year long. They either directly reduce prices, break prices, or even directly remove products from the shelves. This makes it clear to you that now, every platform is strictly guarding against the "low price" mentality, which is the bottom line and moat for every platform.

For brands, it seems that no matter what choice you make now, it’s wrong:

If you don't go on live broadcasts by experts, not only will your traffic and popularity drop, but competitors will also be able to easily harvest the brand's crowd at a low cost: if this brand doesn't go on, it is common to switch to a similar brand to fill the gap, and as I just said, brands sometimes have to invest traffic in the live broadcast rooms of experts, which means that the precise crowd that the expert has obtained through the investment of brand A will be smoothly transferred to the pool of brand B.

If you bite the bullet and go for it, you can’t keep the price of a certain type of e-commerce platform unchanged, and you will fall into a cycle of constantly lowering prices. Once the prices are messed up, consumers will also be confused about what price the brand should sell at. It seems that you can harvest some users in a short period of time, but after a few months, you will find that the explosive power of the real big promotion nodes has significantly weakened. In the end, users will never know whether this time is really cheap, or it will be more cost-effective to wait for the next live broadcast.

At the same time, the competition for traffic between business and content has also intensified. A few days ago, Yu participated in Douyin’s brand sharing session, and the entire sharing session emphasized two words: "entertainment". Next year, we will focus on entertainment content and return to the positioning of an entertainment platform.

Therefore, by the end of this year or next year, Douyin is likely to make another major adjustment to the traffic weight of organic content and e-commerce content. After all, the current Douyin is becoming less and less watchable (there are a lot of ads, live broadcasts, and soft ads when you open it), and the loss of high-net-worth users is particularly serious. Looking at the top 5 beauty products on Douyin and Tmall during Double Eleven this year, you can find clues:

As a result, with the intensified competition for traffic (entertainment and e-commerce, anchors and anchors, merchants and merchants), serious low-price internal competition, and fierce platform competition, it is becoming increasingly difficult for brands at the center of the live broadcast vortex to define the value of live broadcasting, especially live broadcasting by experts:

• Using it as a channel requires paying both price and traffic costs
• As an advertisement, it cannot be effectively remembered in a high-density rhythm.
• Using it as an endorsement, the anchor is uncontrollable and the persuasiveness is weakening

So, how do we go about live streaming?

2. Evolution of Dabo’s Trends

In our opinion, live streaming will return from crazy GMV to a normal and reasonable state. It will not dominate by monopolizing price and traffic, but exist in a posture of balancing the interests of multiple parties. The popularity and voice of super-head anchors will decline. The reasons are:

Platform side: Super head anchors have always been a double-edged sword for the platform, and in the current period of stock users, the siphoning effect of their traffic is not conducive to the platform's resource allocation (it cannot maximize the platform's profits). Therefore, the traffic equalization strategy is being implemented and will definitely be intensified.

Brand side: For brands, the live broadcast room of the last top anchor will bring a large number of invalid one-time recognition and purchasing users. In the period of capital bubble prosperity, the effect of increasing GMV is significant. However, when returning to the period when profit is king, a healthy high-repurchase customer base will be truly effective.

When live streaming returns to normal, it may be mainly in three states:

1. Discount store model

For merchants with planning and supply chain cost advantages, they attract price-sensitive consumers with normalized low prices on a daily basis; during discount or promotion seasons, they obtain better brand mechanisms and undertake the promotion and clearance needs of brand merchants.

You can pay attention to the "Crazy Live Broadcast Room" opened by JD.com during Double 11. It clearly says "No commission and slot fee". The main theme is a 50% discount, which actually blurs the line between live broadcast and big promotion. Live broadcast is another carrier of big promotion.

2. Buyer store model

For products with high brand premium, niche, and high unit price, the focus is on discovering and sharing good things to attract high-net-worth individuals. The e-commerce live streaming that Xiaohongshu is currently doing is taking this path, bypassing price involution and traffic competition. People don’t pay for “the anchor can negotiate a low price”, but because “the anchor’s recommendation is really useful.”

3. Specialty store model

They are mainly vertical track anchors who are long-term bound to certain brands. They rely on their professional personalities to promote products with corresponding attributes on a daily basis and have a fixed fan base or people with strong demand.

3. Strategies and methods of brand live streaming

In the process of changes in the live broadcast industry, it is not easy for brands (note, this does not refer to white-label brands) to gain profits, but there are solutions.

In Yu’s opinion, the underlying logic is: use incremental thinking to do live streaming.

Some people say that live streaming is all about increasing sales. In fact, in many actual live streaming implementations, the mindset is no longer incremental. Live streaming has become a game of " getting potential users who already have purchasing intentions at a low price ."

In other words, brands send their existing users to influencers to increase their sales. They push users who might have purchased at full prices to influencers to harvest at low prices:

"Look, we've lowered the price and saved you money."

This is the typical logic of stock involution.

The logic behind the increase is to turn those who are "almost becoming brand users" due to difficulties in selecting product categories, inability to make up their minds due to slightly high prices, or insufficient understanding of the actual product quality or experience into real users.

The key to the incremental model is to truly identify and convert these "almost" users .

To achieve this, two approaches can be considered in the design of live broadcast strategy:

(1) Dabo has adopted self-broadcasting and uses “price discrimination” rather than “network-wide promotion” to classify users.

(2) Self-broadcasting and multi-broadcasting, focusing on incremental user acquisition, accumulation and conversion

First of all, the path for Dabo to become self-broadcasting is: to bind vertical anchors and experts for long-term cooperation (franchise store model), not to give discounts lower than the platform, but to cooperate through differentiated gifts.

Because the influencers themselves are not so big, they do not have the final say like the top anchors. Brands can leverage cooperation through long-term binding, giving gifts instead of easily lowering prices, which is proven to be feasible. They can also consider signing an incentive mechanism with anchors. For example, if a certain GMV level is reached, the commission ratio can be appropriately increased, or the rights of short video implantation cooperation can be added.

If the brand awareness is not high or is still in the period from 0 to 1, in order to leverage cooperation, you can increase the commission ratio or make some grass-planting videos to attract traffic in advance, but do not change the price easily.

The reason is that "price discrimination" can distinguish between users who are willing to buy at full price and those who must pay a discount to place an order. Let's recall that when KFC and McDonald's issued coupons, they often needed to find a discount path, download an app, complete sharing tasks, etc. In the early days, they even needed to print coupons. This allows those who are more price-sensitive but have time to buy products by looking for coupons. The key here is that "there is a certain threshold to get discounts" or "the information is somewhat hidden." For those who are willing to buy at full price, doing so is a waste of time and energy, so they can just buy directly.

The same is true for cooperation among vertical anchors: if someone is willing to buy at full price, they can go directly to the mall, but if they want gifts or live broadcast room benefits, they have to spend some time to find these live broadcast rooms and wait in the live broadcast room.

Note that the cooperation with top anchors is different: because top anchors have a large number of fans, large traffic, and they make a large traffic announcement before the live broadcast. Let everyone know that yours is cheap. In this way, users who could have bought at full price are also drawn into the live broadcast room to buy at a low price.

Therefore, we should be " restrained " when cooperating with top anchors. It only plays the role of harvesting infrequent promotions, rather than harvesting every day or every week. It is best to put it in the time before each platform promotion (618, Double 11, Double 12) or the brand's own node. The assets of the crowd that originally accumulated likes can be realized in a centralized manner, and you can also take the opportunity to harvest the crowd that needs the category.

The second point is the self-broadcasting (store broadcasting and self-broadcasting). It includes two parts:

1. Build your own talent matrix.
2. Imitating Dabo, it attracts and maintains fans through content.

Before we talk about this, let's take a look at the live broadcasts of Taobao stores during this year's Double 11. Yes, Taobao is heavily supporting store live broadcasts to consolidate the "low price" mentality and compete with Douyin. According to platform statistics, in the past year, there have been more than 27,000 live broadcasts of stores with transaction volumes exceeding one million on Taobao Live, and nearly 4,000 with transaction volumes exceeding ten million. ‍‍

In addition to Taobao, we can see that platforms such as Xiaohongshu, Video Account, and JD.com have all increased their support for store self-broadcasting this year. Therefore, doing a good job in self-broadcasting is an opportunity point in the past two years.

So how to do it specifically?

There are two types of products, search-based products and experience-based products , with different selling points and marketing methods. Similarly, for self-broadcasting (store broadcasting), these two types of products also have different focuses:

(1) Search-based products (referring to products that require searching for information to understand their value)

The focus of self-broadcasting for this type of product is to build the own matrix , because it can maximize the number of people in need.

For example, many 3C products will allow employees to open their own live broadcast rooms. What are these live broadcast rooms used for? They are used to do live broadcasts similar to objective reviews. That is, to recommend products of various brands from an objective standpoint (of course, they are more inclined to their own brands). This can not only get category traffic through search results, but also get competitor traffic through targeted information flow delivery.

(2) Experience-based products (products whose value can only be understood after experiencing them)

The focus of self-broadcasting of this type of product is to imitate Dabo’s account management, attract fans and retain fans through content . That is, attract users through content scenarios, and convert them after repeated contact.

Here, let me talk about another implementation detail. The specific implementation adopted by the two major store broadcast platforms, Douyin and Taobao, this year should also be different. In Douyin, the focus should be on improving the quality of content materials rather than expanding the investment budget (to be honest, it is really too expensive now); in Taobao, it can appropriately increase commercial investment and do a good job in member conversion.

Douyin belongs to content e-commerce, and the focus should be on creating attractive content (Qianchuan materials) to actively "attract" users. Those who have put in ads know that the materials that perform well now are generally those with price cuts and discounts. However, as the e-commerce traffic market further tightens and involution occurs, the efficiency of such materials will inevitably decrease. Therefore, creating scenes around the product itself and using emotions to guide behavior are content optimization directions that must be paid attention to.

Taobao is a shelf e-commerce, and store broadcasts in the past mainly served as detail pages and customer service. But this year, the platform is focusing on store broadcasts, and brands have more opportunities to use store broadcasts to support public domain traffic. Therefore, now it is possible to appropriately increase the budget for this part of the traffic, or create some differentiated and stylized features in the live broadcast room. More importantly, it is important to focus on converting store members through live broadcasts. To be honest, the value of Taobao store members is much higher than that of Douyin fans - high-frequency contact and differentiated operations, so as to increase the probability of conversion and further become a high-repurchase group.

After talking about the short term, let’s talk about the long term.

Let’s start with a concept called “planting and harvesting in one” or “planting and harvesting closed loop”.

To be honest, this concept is very clever, and many people think it is a perfect marketing closed loop. However, there is a problem here: cost.

Planting costs money, harvesting costs money too - products need to be sold at a lower price, traffic needs to be purchased: Qianchuan, CID, search after watching, product specials...

But in fact, if planting is effective, harvesting does not have to cost money, or cost that much money. In other words, the cost of live broadcasting as a harvesting tool should be more strictly controlled.

Money should be spent on "planting". The "planting" here does not mean "planting grass", but truly planting the product into the hearts of users - memory, cognition, recognition, trust, so that they become high-potential users, rather than "crowd assets" that can be lost at any time.

How to do it? As the old saying goes, slowly accumulate (profits) through intensive marketing, so as to invest capital to support the brand, and pay attention to the long-term shaping and careful maintenance of brand values ​​throughout the process.

As I write this, I suddenly find it quite interesting that every new marketing concept seems to be able to attract attention and represents a shortcut. Everyone fantasizes about "winning by surprise" and "integration of brand and effect". After the carnival of social fission, live broadcasting appeared. After the carnival of live broadcasting is over, other similar methods may appear. ‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍‍

But what really works is always the simple truth:

We conduct refined marketing across the entire chain based on human nature, and in the process, we focus on long-term branding; we do not easily bet our business on traffic, but insist on accumulating users and building our own influence.

Author: Lan Lan

WeChat public account: Taro and Cat Talk (ID: taro_cat)