Live streaming channel and product assortment with both national and store brand products

Abstract

To counteract the fierce competition in the online retailing market, retailers are increasingly adopting live streaming selling model and introducing store brand product to enhance their competitiveness. In this context, we attempt to examine whether and when a retailer should launch a live streaming channel. If launched, we further investigate how the retailer should assort both national and store brand products across available channels. To delve into these questions, we consider a supply chain consisting of a manufacturer and an online retailer, where the retailer resells the manufacturer's national brand product and also sells a store brand product. We examine the retailer's optimal channel strategy and product assortment strategy by considering six scenarios, differentiated by whether introducing the live streaming channel and various product assortment tactics. Our findings indicate that as long as the fixed setup cost of the live channel is relatively low, the retailer will always introduce a live streaming channel. The retailer's optimal assortment of both products across channels highly depends on the consumers’ additional value derived from the live streaming channel and the perceived quality of the store brand product. We also find that, the retailer's optimal channel strategy and product assortment may not always benefit the manufacturer, but there exist conditions that can create win-win situations for both players. Our study further shows that if the retailer launches the live streaming channel at the start, it may not always be necessary to introduce the store brand product under certain conditions.