Joint Optimization Decision of Online Retailers’ Pricing and Live‐Streaming Effort in the Postepidemic Era

Abstract

The isolation requirements of the coronavirus epidemic and the intuitive display advantages of live-streaming have led to an increasing number of retailers shifting to social live-streaming platforms and e-commerce live-streaming platforms to promote and sell their products in real time. However, the provision of live-streaming services will also incur high live-streaming effort costs. In this paper, we develop two decision models for retailers to sell goods through a single online shop and both online shop and live-streaming room; we also present the optimal decisions of pricing and live-streaming efforts. Furthermore, we identify the profitability conditions for retailers to determine when to provide live-streaming services. In addition, we examine the impact of the provision of live-streaming services on the optimal price and live-streaming effort. We obtain three findings. First, there is a unique optimal decision on the price and live-streaming effort under certain conditions. Second, when the effect coefficient of the live-streaming room reaches a certain threshold, there are enough customers who enter the live-streaming room to watch and buy and it is profitable for retailers to provide live-streaming service. Finally, the optimal price and live-streaming effort increase with the increase in average return loss, the effect coefficient of live-streaming effort, and the extra return rate and decrease with the increase in the proportion of customers who choose to buy in the online shop and the price discount coefficient in the live-streaming room.

A Comprehensive Bibliometric Analysis of Live Streaming Commerce: Mapping the Research Landscape

“…as well as explore the development of an optimal/equilibrium price strategy (L. Guan et al, 2022; J. Liu et al, 2022).…”

How the Characteristics of Live-Streaming Environment Affect Consumer Purchase Intention: The Mediating Role of Presence and Perceived Trust

“…Visibility means that live streaming allows information to be communicated to consumers through visual channels [54]. High-definition live video enhances the visual aspect of shopping, provides more realistic and comprehensive product information, and minimizes information inconsistencies for consumers [55], [56]. Enhanced visibility can increase the perceived tactile experience, thereby increasing consumer presence [22].…”

Research on the impact and optimizing strategy of live streaming on the Chinese FMCG market

“…According to Liu's research, 66.2% of Chinese consumers prefer purchasing goods through live streaming, and 17.8% of customers spend over one-third of their expenses on live streaming purchases [20]. Among these, 68% of consumers are willing to purchase FMCG goods through live streaming since 52% think live streaming offers price discounts and 43% are easily enticed by interactive recommendations to have impulsive consumption [20]. Therefore, FMCG companies should design more interactive or creative introductions to attract more consumers to place orders immediately.…”