From seeding to conversion, how can brand merchants make e-commerce gold from social media platforms?

A commercial consensus has gradually been reached between e-commerce platforms and social platforms: shopping is buying, and buying is shopping. Consumers' decision-making chain will become more disordered. In this melee of attention grabbing, start-up brands, white-label merchants, mature brands, and lifestyle experts are all expected to get a piece of the pie. Under the leadership of the above forces, which consumer areas have the greatest potential for gold mining? Let's follow the author to find out.

Social platforms are creating new demands in our lives.

On Xiaohongshu, I saw a fashion blogger's street look, which also came with size recommendations for different body shapes and heights, and guaranteed returns after placing an order; the treasure snacks that used to require frequent sweeps of convenience store shelves to be discovered now have a large number of B station up hosts unboxing and tasting, and there are also discount channels; the beauty samples that used to require friends to visit counters to try, now there are countless anchors on Douyin who apply them directly on their faces; if I want to go camping on a whim, I can catch all the bad spots/sad points of the scenic spot after reading the guides and useful information on major platforms...

In the past year, unwilling to just play the role of promoting products, major social platforms have unprecedentedly accelerated their e-commerce development: Bilibili added a shopping section to the live broadcast section to prepare for Double Eleven; WeChat Video Account launched small stores and charged merchants technical service fees to start live broadcast sales; Xiaohongshu launched its own merchant mini-program framework; Douyin upgraded to a global interest e-commerce; Kuaishou cut off Taobao external links...

The huge market cake has attracted a spectacular number of players. According to the statistics of Guoji.com only for Douyin and Kuaishou, the total sales volume of social media e-commerce platforms in 2022 increased by 94% year-on-year, and the overall market size exceeded one trillion, an increase of 87% year-on-year.

A business consensus has gradually been reached between e-commerce platforms and social platforms: shopping means buying, and buying means shopping. Consumers' decision-making chain will become more disordered. In this melee for attention, start-up brands, white-label merchants, mature brands, and lifestyle experts are all expected to get a piece of the pie.

Under the guidance of the above forces, which consumer sectors have the greatest potential for gold mining? How to select influencers and efficiently produce seeding content in different consumer sectors? After influencers seed the content, how can merchants and brands receive traffic and achieve conversion with maximum efficiency?

The Community Marketing Institute will combine the "The Way for Social Media E-commerce Brands to Break the Circle in 2023" recently released by Guoji.com to provide answers to the grass-planting and conversion performance of the Douyin and Kuaishou platforms.

1. What is the current e-commerce ecosystem of the Douyin and Kuaishou platforms?

In the past year, social platforms, especially Douyin and Kuaishou, have been the dominant force in accelerating e-commerce.

As for Douyin, Douyin Store was upgraded to Douyin Mall and changed to a first-level entrance, providing a "people looking for goods" service, and upgraded to a global interest e-commerce; as for Kuaishou, Kuaishou cut off all external links of Taobao Alliance products and used Kuaishou Store to complete sales transactions, taking a further step towards self-built e-commerce. Not only that, Douyin and Kuaishou are also creating shopping festivals, using more normalized promotions to attract traffic.

Douyin and Kuaishou have also launched their own business management methodologies, using FACT+/STEPS to empower business operations. With their strong support for e-commerce businesses, the following forces have grown strongly in the past year:

The number of merchant stores increased by 78% year-on-year, and the number of products increased by 79%; the number of influencers increased by 15% year-on-year, totaling over 100 million; only about 2% of the existing influencers are above the middle level of the pyramid, and the proportion of top influencers with the best interaction with consumers (average interaction volume of 2,600+) is only 0.37%; the number of live broadcasts on the platform increased by 71% year-on-year, and the number of live broadcast influencers increased by 45% year-on-year; as of the second half of the year, self-broadcast sales of Blue V certified accounts in all categories accounted for about 50%, and self-broadcasts under brand certification accounted for 30%.

It can be seen that in the past year, social platforms represented by Douyin and Kuaishou have been more focused on attracting businesses rather than influencers to share a piece of the pie. Although only 2% of influencers can efficiently harvest traffic, the number of influencers is still expanding slightly. The change is more structural, that is, a larger proportion of existing influencers have invested in live streaming, trying to monetize traffic, the live streaming cooperation between merchants and influencers has become more mature, and brand self-broadcasting is becoming a routine from a small proportion.

Under the dominance of the above forces, the best performing consumer areas on the Douyin and Kuaishou platforms are: clothing and underwear in the first tier, with sales accounting for as high as 34%; and food and beverages, household goods, beauty products, jewelry, shoes and bags, mother and baby pets in the second tier, each accounting for about 5% of sales.

In terms of clothing and underwear, which accounts for the largest sales share, more women are paying the bills. The best-selling items are women's clothing (77%), men's clothing (15%), and underwear and leggings (7%). Moreover, the CR10 is only 5.41%. The brand with the top sales volume, YaYa, mainly makes high-cost-effective down jackets priced around 500 yuan - whether from the perspective of market concentration or the best-selling categories, there is still much room for brand merchants to develop.

Clothing products are highly non-standard, and the majority of consumers are female. Therefore, brand merchants on the Douyin and Kuaishou platforms are in great need of experts who are good at emotional incitement and camera explanation to accelerate consumer decision-making.

In the second tier of sales, take beauty products as an example. Since influencers can vividly show the contrast effect before and after applying the product, as well as the applicable skin types, applicable scenes and facial application details of beauty products in front of the camera, they have also won the cooperation favor of many brands, especially those lacking in category education.

The highest sales share is in skin care (74%), makeup/perfume (20%), and personal care devices (6%). Moreover, since skin care products account for a large proportion of sales and are more functional than emotional, their market concentration is higher than that of clothing, with CR10 reaching 12.62%, which is more worthy of brands' careful layout.

2. From influencer recommendation to traffic generation and sales conversion, what is the focus of the layout of different links?

Whether it is FACT+ released by Douyin or STEPS released by Kuaishou, their core essence points to a complete set of consumer decision-making links. We will use specific brand cases to explain how different decision-making links can be applied to different business strategies.

First of all, the essence of the seeding link is to accelerate consumers' cognition of categories and the mindset that categories are brands. When brands cooperate with influencers to create seeding content, they must do two things right:

• Screen influencers who match the brand tone, and have a reasonable level and proportion of influencers with different appeal and different creative types;
• The grass-planting content should match the influencer's consistent creative style, and appropriately create consumption scenarios for the brand in the grass-planting content to stimulate user interest.

When screening influencers, three mature indicators have been formed: the degree of fit with the brand, the influencer's own popularity, and the influencer's ability to bring products.

The indicators that can be broken down into the following include: the overlap between the fans and the brand's target audience, the influencer's expertise in the category/the attributes of the content they have created in the past, and the brands they have cooperated with in the past;

The popularity of research experts is very intuitive. It mainly looks at the number of fans, number of works, interaction rate, potential for increasing fans (such as the speed of increasing fans in the past week/month) in the short video dimension, and the number of fans, number of online users, average stay time, and PV per hour in the live broadcast dimension.

To examine the ability to bring goods, a systematic calculation is needed, including the number of sales sessions, average sales per session, ROI, live broadcast transaction density, UV value, brand reinvestment rate, conversion rate, etc.

After screening influencers based on the above indicators, the structure ratio of the influencers cooperating with Estee Lauder, an international beauty brand that has always ranked among the top three in Douyin's beauty product sales, is: stars (1%), top (3%), mid-level (9%), and tail (87%).

Among them, celebrities are mainly used to increase brand awareness and improve the overall brand endorsement ability; top influencers have certain product promotion capabilities and are more convenient to promote products; mid- and tail-level influencers are more capable of planting grass and endorsing the actual effectiveness of products with more lifelike scenarios and language.

Under this structure of cooperation with influencers, Estee Lauder's live broadcast sales contributed by KOLs in 2022 will account for 80%, with only 20% being the brand's own live broadcasts. Moreover, Estee Lauder cooperates with influencers of different creative types, emphasizing different consumption scenarios and content focuses:

• Beauty experts emphasize face-to-face chats, directly discussing product ingredients and effectiveness, and using their expertise to highlight product value;
• Drama experts emphasize staying up late to play with mobile phones, as well as the contrast between before and after product use, using drama to bring out the value of the product;
• By cooperating with experts from shopping malls, Estee Lauder will directly highlight the efficacy and ingredients of its products, as consumers themselves have certain shopping attributes.

Secondly, after having the above-mentioned grass-planting content/grass-planting capabilities, brands need to consider the ability to undertake and convert traffic. In this regard, in the past year and in the future, brands need to pay more attention to store-broadcast integration, that is, brand self-broadcasting.

Let’s take YaYa, the best performing brand in apparel and underwear, as an example. In addition to the above-mentioned routine operations of cooperating with influencers, it also logged into the community media offline, especially on the eve of Double Eleven, to occupy/dominate the smart screen in the elevator of Xinchao Media, and use matching catalysts to reach its potential target customers in all directions.

After the water storage, how did YaYa handle the huge traffic? In the construction of the store/broadcasting integration (venue), YaYa has 319 self-broadcasting accounts, and the average number of products per store is 694. It can handle traffic with rich goods and a large number of store touch points. In 2022, the sales contribution of store broadcasting reached 81%.

These huge touchpoints for communicating with consumers are not scattered, but are finely classified and operated according to different population portraits, category characteristics, product attributes, and payment attributes. They also unify the visual scenes in the live broadcast room and match them with the image of offline counters, thereby accumulating coherent brand assets.

For example, in terms of people, YaYa has opened flagship stores for men's clothing/children's clothing/mother and baby/parent-child clothing; in terms of goods, YaYa has stores for outdoor sports (high functionality and professional scenarios), as well as stores for lightweight down jackets for spring and autumn and daily outings; in terms of payment, there are both regular outlets and women's clothing outlets; in terms of categories, in addition to down jackets, YaYa also has special flagship stores for sports bags, shoes and other categories.

In addition to the advance preparation of the above-mentioned "people, goods and venues", YaYa's strong conversion capabilities in the live broadcast field are also obvious to all: not only does it have a complete system of live broadcast scripts and product uploading processes, the roles of anchors and assistants are clear, and the delivery arrangements and customer service Q&A have very detailed speech arrangements.

The Community Marketing Institute once pointed out that its live broadcast scripts are specially optimized for women in the sinking market. Not only is the host's dress very consistent with the aesthetics of small town girls, but it also demonstrates different models of clothing/poses for the camera/intensively outputs the product value points in front of the camera/performs fabric and velvet fluffiness tests in front of the camera, and finally gives a record low discount of 2,000 yuan for the tag price and 400 yuan for the live broadcast room discount price. It's hard not to be tempted.

3. Trend summary: Shopping is buying, buying is shopping, social media and e-commerce are inseparable

At the end of the report, Guoji.com pointed out that under Douyin's global interest e-commerce format, planting grass, raising grass, and pulling grass are integrated into one, and the multi-level and complex grass planting format is the future trend.

In fact, this coincides with the trend we pointed out: shopping is buying, and buying is shopping. In the next 1-3 years, the boundary between the content seeding field and the product sales field may completely disappear.

In this context, businesses need to deploy interest touchpoints across the entire region:

• In the passive traffic field, do a good job in search display and optimize keywords; in the active traffic field, deepen cooperation with influencers and build a marketing methodology;
• In the detonation field after the traffic is accumulated, we should make a good brand self-broadcasting matrix, use 24-hour circular store broadcast, match the crowd's flow materials and consumption scene construction, and undertake the traffic;
• In the trading market, enrich the pallets, optimize the store decoration, display the product details page, search for product keywords, etc.

In this battle for attention, the compatibility between consumer categories and social media platforms may be the biggest deciding factor.

Author: Editorial Department

Source: WeChat public account "Community Marketing Research Institute (ID: Community_Marketing)"