Optimal marketing strategies for live streaming rooms in livestream e-commerce

Abstract

With the rising popularity of live streaming e-commerce, live streaming rooms and merchants are keen to explore and understand successful cooperative models. Some merchants require live streaming rooms to guarantee a minimum sales threshold in order to ensure their earnings. Based on certain variables, live streaming rooms can opt to utilize a "guaranteed sales" marketing strategy or a "breakthrough sales" marketing strategy. This study focuses on the live streaming e-commerce supply chain and considers factors such as streamers’ social influence and the live streaming room’s slotting allowance. We have developed a Stackelberg game model and designated the live streaming room (LSR) as the leader with partner merchants as followers. Optimal marketing effort level decisions and optimal discount rate decisions are studied under both the "guaranteed sales" and the "breakthrough sales" marketing strategies. We then consider whether variations in the slotting allowance charged by the LSR to the merchant have an impact. Our results indicate that the LSR’s optimal marketing strategy is mainly determined by the streamers’ social influence. When the streamers’ social influence is low, the LSR benefits more from the "guaranteed sales" marketing strategy; when it is high, the room benefits more from the "breakthrough sales" marketing strategy. For merchants, if there is no difference in the slotting allowance, then the merchant always makes more profit using the “breakthrough sales” strategy. If there is variation in the slotting allowance, the merchant's profit under the two strategies is uncertain. The greater the difference between the two marketing strategies, the greater the probability of choosing the "breakthrough sales" strategy. The research conclusions of this paper provide references for the strategy selection of live streaming e-commerce supply chain members and contribute to the further development of live streaming e-commerce.