With the rapid growth of livestreaming e-commerce, many physical retailers have turned to selling e-vouchers through livestreaming on social media platforms. This strategy can stimulate unplanned purchases and expand the market, while also driving cross-selling opportunities in-store. However, due to the streamer’s persuasion and price discounts, consumers are usually more impulsive in livestreaming rooms. They may choose not to redeem the e-vouchers when calming down, which leads to great losses to physical retailers, such as the service-technical fee paid to social media platforms. This paper investigates how unplanned purchases and e-vouchers non-redemption influence physical retailers' price and channel strategies.
This paper establishes theoretical models to explore physical retailers’ equilibria with and without a livestreaming channel. It identifies the conditions under which a livestreaming channel should be adopted and determines the key factors that influence the optimal strategy.
Adopting a livestreaming channel for selling e-vouchers doesn't always benefit physical retailers, which depends on unplanned consumer percentage and the service-technical fee. Interestingly, when there are more loyal brick-and-mortar (BM) consumers in the offline channel, physical retailers may be more willing to add a livestreaming channel. Moreover, the percentage of loyal BM consumers is an important factor affecting the operational strategy for physical retailers. Finally, the forms of redemption rates play significant roles in pricing strategies.
This paper offers a novel perspective on livestreaming e-commerce for physical retailers, highlighting unplanned purchasing and stockpiling behaviors. Moreover, this paper shows how combining livestreaming with e-vouchers can boost online-to-offline conversions, enhance the cross-selling effect and help physical retailers navigate digital transformation.
