Livestream Marketing Model
Livestream Marketing Model
Livestream Marketing Model
Volume 14 (2021)
1. Introduction
The knowledge of consumer behaviors is the root of all kinds of marketing decisions [1]. Knowing
and predicting how consumers behave and why they make buying decisions are significant for
companies and brands to improve marketing strategies and achieve business success in the market
[2]. With the emergence of technological advances and new shopping platforms, the COVID-19
pandemic has deeply changed consumers' shopping and buying habits with new regulations and
procedures [3]. The boundaries between stores and homes have been blurred, deeply influencing
consumers' shopping habits and consumption experience. Statista stated in the U.S. Consumer 2020
Report that 88% of consumers used digital video content in the past 12 months, and most consumers
will conduct online research before making major purchases [4]. To capture the increasing demand
for online shopping and home entertainment, marketers are thinking about new ways to better engage
in consumer decision-making. The accelerated development of digital marketing catalyzed the thrive
of new marketing models: livestream marketing strategy.
As Craig and Lv defined, "Livestreaming is broadcast video streaming services provided by web-
based platforms and mobile applications that feature synchronous and cross-modal interactivity" [5].
Livestream marketing is an evolution of digital marketing strategy that connects anchors, brands, and
consumers to achieve the value exchange between enterprises and customers [6]. It helped thousands
of companies survive during COVID-19 and created a business breakthrough in the e-commerce
industry. Taobao T-mall 2020 "Double 11" shopping festival hit the highest gross merchandise
volume (GMV) of 498.2 billion yuan in history [7]. Thirty-three Taobao livestreaming showrooms
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reached the gross merchandise volume of 100 million Yuan or higher, and almost 500 studios
achieved a GMV of at least 10 million Yuan during "Double 11" [8].
The livestream marketing model has become a new economic engine driving revenue growth from
big companies to small brands. It intertwines brands and consumers with livestreamers and digital
technology. The mechanism and strategies behind livestream marketing deeply influence how
consumers perceive, learn, access, and purchase products and services, which may also change some
traditional recognition of consumers' decision-making process.
The consumer decision-making process is a hot research topic in marketing, economics, business,
and psychology. As B Mullen and C Johnson described, consumers are the individuals who use the
products, goods, or services of some organization or company [9]. The stimulus situation is the
complex of conditions that collectively act as a stimulus to elicit responses from the consumers, and
the consumer behavior can be described as the consequence of patterns or constellations of stimuli
[9]. The consumer decision-making process starts from the beginning of any possible stimulus
situation that consumers try to satisfy their needs, then flows across different stages until purchase,
and continues to exist even after consuming products or services.
In 1965, Anderson published the oldest model that comprehensively described the consumer
behavior patterns throughout the consumer decision process [10]. This model emphasizes the
important roles of intrinsic attributes, extrinsic attributes, and price availabilities in the early decision-
making stage and the significance of information in the filtration stage, which may change decision
makers' beliefs, feelings, and disposition [11]. Middleton proposed an adapted stimulus-response
model of buying behavior based on the communication filters, including learning, perception, and
experience across communication channels, and the complex motivation in the dimensions of
demographics, psychographics, needs or goals, and attitudes [11].
As Alina Stankevich introduced, after years of research development, marketers then agree on a
traditional funnel model and try to reach the "touchpoints" or "moments that matter". The Funnel
flows from awareness, familiarity, consideration to purchase and loyalty [2]. With the development
of the Internet and media technology, consumers are trying new ways to gather information and
complete the purchase action. The traditional funnel model is insufficient to reflect those changes and
catch the "touchpoints" in different stages. As Kumar et al. analyzed, "Consumer's decision-making
patterns are changing rapidly due to the ease of information transmitted through online facilities, and
hence the marketers should keep a unique marketing mix in the process of formulating strategies for
consumer attraction, loyalty and retention" [12].
The penetration of the Internet and new technology has provided consumers with tremendous
options of searching recommending options that tremendously impact their online buying habits [12].
According to Stankevich, "Researchers are also beginning to understand the role of controlling the
information flow about consumers' decisions, as increased control leads to increased performance.
These new insights promise to be particularly important in the new online environments, where
controlling the information flow can particularly influence the quality of consumers' decisions,
memory, knowledge, and confidence" [2]. However, only a few researchers and scholars investigate
the consumer-making process behind livestream marketing mechanisms and the influence of COVID-
19 on consumer behaviors in the e-commerce and media industries.
Sang analyzed the impact factors of livestream marketing from a perspective of the digital
transformation of enterprises. Under the big environment of the digital economy, livestream
marketing enables more accurate data collection, more precise client portraits, various private traffic
pools, and marketing model transformation with online value exchange [6]. From cultural and
economic perspectives, Craig and Lv discussed rising trends of livestreaming, e-commerce, and the
wang hong economy in China. The beauty vloggers, livesteamers, and game players, who enjoy a
higher degree of economic stability and opportunity than online content creators in the Western
countries, are combining their loyal fan communities with multiple e-commerce platforms, such as
Alibaba's Taobao and T-mall, to transfer traffic into revenues [5].
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However, only a few studies investigate the consumer decision-making process behind the
mechanism of livestreaming and explore the significance in media, marketing, psychology, and
economics industries. Can traditional decision-making models still be effective in the newly emerged
livestream marketing strategy? How does livestream marketing strategy influence different stages of
the consumer decision-making process? What kind of effective strategies do livestreamers utilize to
attract consumers and encourage the action of purchase? Theoretically, this article will extend the
understanding and evaluation of the mechanism of livestream marketing and its influence on the
consumer decision-making process. Practically, this study will help marketers and companies better
adapt to the new shits of "moment that matters" and create more "touchpoints" during the consumer
journey of online shopping. It will empower organizations and brands to achieve revenue growth by
improving marketing efficiency and precision, especially amid the COVID-19 pandemic.
2. Methodology
"Five-Stage Model of the Consumer Buying Process" will be utilized to conduct a case study of
the 2020 T-mall "Double 11" livestream marketing model with secondary data and content analysis
approaches.
The case study of T-mall "Double 11" in 2020 refers to the online shopping festival in China with
a timeline from October 21, 2020, to November 11, 2020, which usually was compared as the Black
Friday in the U.S. The content analysis will focus on Ya Wei's livestream contents and strategies
(viya), who individually created the highest gross merchandise volume among other livestreamers.
Kotler and Keller proposed the "Five-Stage Model of the Consumer Buying Process" model
(shown in figure 1) to describes consumer decision-making with five stages: need recognition,
information search, evaluation of alternatives, purchase, and post-purchase behavior [13].
Problem Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior
The first stage of problem recognition will describe triggers and stimuli that help consumers
recognize unsatisfied mental or physical needs in certain products or services, including current and
potential problems. The information search is when consumers take advantage of personal sources,
commercial sources, public sources, or experimental sources to gather information and consider the
feasibility of purchase options. Evaluating alternatives will analyze a significant stage of selecting
"the best one" from different dimensions, such as qualities, performance, user experiences, discounts,
recommendations, or comparisons with other brands. The purchase decision is a critical moment
when consumers find the most promising and cost-effective product or service and accomplish the
buying action, influenced by product stories, brand reputation, quantity set, timing, shipping, and
payment options. The post-purchase behavior reflects consumers' post-purchase satisfaction and
advocacy possibility and contributes to forming a close loop and repeat purchases.
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Table 1. Top 9 Best Selling Product Categories in 2020 Taobao T-mall Livestreaming
Top 9 Categories in Total Gross Top 9 Categories in the Growth Rate of Gross
Merchandise Volume Merchandise Volume
1 Cosmetics Watch & Eyeglasses
2 Women Clothing Floral and Pet Supplies
3 Consumer Electronics Local Life/Events
4 Major Appliances Luggage and Accessories
5 Food and Beverage Underwear
6 Jewelry and Accessories Shoes
7 Small Appliances Small Appliances
8 Mom and Baby Care Products Outdoor and Sports Goods
9 Personal Care Products Food and Beverage
The T-mall Double 11 consists of two stages: Presale (October 21 – 31 and November 4 – 10) and
Final Sale (November 1 – 3 and November 11). The presale stage has become the best time for
livestreaming to draw market attention and pave the way for the next information search step. Weiya,
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as one of the most popular livestreamers in China, attracted a total number of 34,580,000 followers
and offered 1669 different merchandise available for purchase in her live showroom during the 2020
T-mall Double 11. In early October, she promoted the shopping list of those 1669 products and
successfully warmed up discussions across other social media platforms. This strategy can guide
consumers to actively think through different goods categories, form initial purchase intent by
themselves, and generate their ideal shopping list. The social media sentiments, comments, and topics
feedback will also prepare the brands and livestreamers to segment consumer groups and refine digital
content.
During live broadcasting, livestreamers utilize special discount and context storytelling strategies
to stimulate consumer needs. For example, to promote pop-up sticky notes with pads in various shapes,
livestreamers described the consumption context in daily usage and told a persuasive and intriguing
story based on personal experience. The small note pads were described as a multifunctional tool for
children's study, Mom's kitchen assistant, Father's work reminders, grandma's home notetaker,
addons to calendars, or a love message to the one you care about. Consumers then "take a seat" in
some of the vivid scenarios of consumption described by the livestreamer and become clear about
their unsolved problems. Most special discounts are only available in live showrooms within a short
period, which transforms the "potential and future" purchase intent into "strongly related and urgent"
consumer needs.
3.2 Information Search
The livestream marketing model directly engages in the information search stage by providing
consumers with comprehensive product information and price options, which largely shortens the
decision-making process. When facing overwhelming information online, consumers will try inner
or external channels to gather information and support purchase motivation, including the personal
source (friends or families), commercial source (sales or stores), media platforms (TV or social
media), and experimental sources (testing results).
Livestreaming marketing can build a communication tunnel between brands and consumers
through extracting effective content and summarizing the information of products or services. By
analyzing the broadcast contents and performance of Viya, the result shows that in the 22 days of the
T-mall Double 11 shopping festival, 30 sessions of livestreaming were launched by Viya, the average
length of livestreaming is 4.86 hours per day and a total number of 1.09 billion viewers accumulated
in her showrooms. The highest length of daily livestreaming happened on October 21, the first day
of presale, and reached a viewership of 140+ million. Unlike the rising popularity of short videos
ranging from seconds to minutes, livestream marketing usually takes hours to condense effective
information of one or multiple products. The sharing contents will include the following: Product
basic function and characteristics, brand introduction, target customers, ways of usage, usage
scenarios, price with limited-time special discounts, how to apply the discounts, choice sets, gift
options, feedback from current customers, strengths and weaknesses compared with alternatives, etc.
Three important principles are commonly applied in successful livestream marketing: Honest,
precise, and intriguing. Livestreamers can also be viewed as the key influencers or celebrities on the
live broadcast media platforms. Honesty is the key factor in livestreamers building up a reliable
reputation and becoming the best source for consumers' information search. It is the necessary
condition because people follow, watch, trust, and buy products they recommend in the live
showrooms. For example, when introducing a homemade instant noodle product, Viya conducted the
product test from unpackaging, cooking, tasting, and evaluating in front of millions of viewers. Then
Viya shared the authentic experience with tons of close friends of consumers. She precisely described
the tastes of noodles and soup, and be honest that the noodles might be a great choice for people who
dislike spicy flavors. To intrigue more consumers, Viya posted the discount coupons in the beginning,
organized lottery activities for lucky audiences, and invited celebrities to join them in different time
slots to attract different consumer segments in different time slots.
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In this case, livestreamers have become a trustworthy and multifunctional source integrating
personal, commercial, media, and experimental information in the information search stage of
consumers' decision-making process.
3.3 Evaluation of Alternatives
The livestream marketing filters information of alternatives and offers cost-effective purchase
choices to support the consumers' decision. The digital content creators in the livestreaming
showrooms will feature speakers for both brands and consumers and evaluate by following criteria:
The performance and unique features of products, the reputation of brands, benefits or discounts
offered in the livestreaming, ratings and feedbacks from other consumers, comparison with similar
products or brands, add-on values, such as longer warrantee.
The content analysis was conducted on Viya's most popular live sessions during the 2020 Taobao
Double 11 presales, introducing the Crema Nera Extrema Supreme Reviving Cream of Giorgio
Armani shown in Figure 2.
The interface of live showrooms displays user information of the livestreamer, Viya, with real-
time viewers of 102.7 million people. In the middle of the page, official recognition by Taobao and
partnered brands indicate the authenticity of products and the credibility of the livestreamer. On the
right-hand side, consumers can easily learn detailed information about the Double 11 festival. They
can pay a small deposit to preorder the products they like with discounts only available during the
presale campaign and then pay the rest between November 1 to 3 to accomplish the purchase action.
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At the bottom, the live showroom displays the direct link to the detailed description and purchase
page of the products, which largely saves time researching the products or payment page. The original
price of the Armani reviving cream is 2950 RMB/50ml. Viya unpackaged the cream and tried it on
face to experience the features for consumers. She also calculated the math, compared the discount
rate during other shopping festivals, and informed the audience that the final special discount of the
product is 2930 RMB/95ml with a free, well-designed cosmetic bag. Consumers can also interact
with the livestreamer to ask any concern or problem and receive an immediate response.
The livestreaming strategy aims to find and solve any possible needs for consumers and negotiate
a lower price with partnered brands. It can guide consumers through evaluating alternatives stage
filtering valid information, and recommending the best value of products in a shorter time.
3.4 Purchase Decision
The integration between livestreaming showrooms and e-commerce platforms, brands and
consumers, empowers the livestream marketing model to convert the private and public traffic into
purchase action. The target audience can accomplish the purchase action with great benefits and
quality guarantees from the official brands. Product quality or performance metrics, benefits offered
by brands, timing, quantity or choice set, payment methods, and post-purchase services are critical to
accomplishing the final buying decision.
In the case study of Taobao Double 11, livestream marketing designed a frictionless and
entertaining purchase experience from the following dimensions:
a) Multiple discount waves across different sessions of livestreaming
b) The presale campaign encouraging the early action
c) The final sale campaign completing the traffic conversion and repeat purchases
d) Clear descriptions on how to apply special discounts
e) Special price only available within a limited period
f) Discount rate of 20%-60% offered in a limited amount
g) Celebrities invited to increase the credibility of user experiences
h) Direct website link to the product e-commerce store page in all livestreaming showrooms
i) Discount automatically applied on the final payment page
j) Cashless payment to complete transactions
k) Free 1-3 days shipping option available
To support the livestream marketing campaigns, Estee Lauder partnered with Viya during the
Taobao Double 11 shopping festival and offered the historical lowest discount rate to Chinese
customers. Estee Lauder opened their e-commerce store on Taobao T-mall. Consumers can purchase
promoted products in Viya's live showroom with a quick website link directing to the corresponding
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T-mall online store. As shown in Table 2, the average transaction value per customer on Estee Lauder
products in Viya's livestreaming showroom is 865.24 RMB. The gross merchandise volume of Estee
Lauder with Viya during the Double 11 festival is 291.8 million RMB with 379996 units of products
sold [7]. All the transactions are supported by a cashless payment system, Alipay, built in the e-
commerce platform of Taobao.
3.5 Post-purchase Behavior
The livestream marketing model offers secure post-purchase services and advocacy for repeat
delivery to generate a close loop of the consumer decision-making process. Within 7 days after
purchase, consumers can return or cancel their order by unconditional return policy (excludes foods
and a certain type of cosmetics and personal care products). Further discounts and benefits will also
be available for repeat purchases and friend invitations, which largely transforms the public and
random traffic into a more private and precise traffic pool. The digital content creators will also collect
consumer feedback to optimize the next round of livestream storytelling and gradually build up their
fan community.
After the livestreaming on November 10, 2020, Viya attained 450,000 new followers and a gross
merchandise value of 110 million RMB. The total number of followers or fans reached 37,913,000
people by the end of November 2020 [15]. From supply chain, brand partnerships, livestreaming
contents to e-commerce stores, cashless payment system, post-sale services, and logistic systems, the
2020 T-mall Double 11 shopping festival deeply impacted five stages of the consumer decision-
making process and turned the purchase experience into a new option for home entertainment in the
21st century.
In conclusion, livestream marketing strategies can help create a multi-win situation for brands,
consumers, livestreamers, streaming media companies, and e-commerce platforms. It shifts
consumers from a passively waiting and listening mode to the frontline, actively looking for products
and platforms to fill their unsatisfied needs. It plays a critical role of filters to decide the information
consumers receive, evaluate the problems and tell the purchase decisions for consumers in interactive
and entertaining ways.
3.6 Implications
As Galloway pointed out, we all live in a culture of consumption, and the world economy and
prosperity are largely predicted by how and how much we consume [16]. Understanding the stimulus
and motivations behind consumer behaviors is beneficial for stakeholders to make effective decisions
in the digital economy and information technology age. Scholars and researchers may use this article
for further study in consumer behavior, decision-making model, online retailing, pricing model,
digital marketing, and new media. The applicable subjects include marketing, psychology, economics,
business, and sociology. This article can also be insightful guidance for marketers and companies to
practice livestream marketing strategies to lower consumer decision-making barriers and increase
purchase conversion rate in a more precise and efficient way.
More importantly, the overall performance of the livestream marketing model in the 2020 T-mall
Shopping Festival breaks a common phenomenon of the Long Tail Curve. Anderson described that
the future business is selling less or more because a small number of hits usually attain the majority
of popularity or market share. In contrast, digital contents or products in niche markets only attract a
little popularity and generate far fewer revenues as heavily-tailed distributions [17], as shown in
Figure 3. However, based on a rank of gross merchandise volume, the top three livestreamers
achieved 21.34 billion RMB but only occupied 4.28% of the total gross merchandise volume.
The Long Tail Curve may appear after years of intense competition and new evolutions of
livestream platforms, but three critical factors prevent the quick forming of Long Tail Distribution.
Firstly, livestream marketing provides every product with a relatively equal opportunity to tell stories
on their tailored- presentation stage (showroom). To a certain extent, consumers determine popularity.
They care about quality, function, entertainment, and innovation of products more than brand
reputation, which nourishes niche markets to thrive. Secondly, low barriers to entry in the livestream
marketing model encourage livestreamers and e-commerce stores to participate. Customers choose
showrooms from various categories and become active consumers in a highly segmented traffic pool.
In other words, there are abundant information and options for the target audience to decide, and
consumers undertake certain responsibilities to segment markets in a more precise way. This kind of
consumer behavior is an interesting prerequisite to increase later conversion rate and prepare niche
market success. Thirdly, Taobao T-mall has a mature ecosystem to support livestreaming from
comprehensive channels. Top livestreamers cannot monopolize the markets because brands also have
self-operated e-commerce stories and livestream showrooms, fully independent of livestreamers.
Table 3 displays the livestreaming performance comparison between Viya's showroom and Estee
Launder official e-commerce store during Taobao T-mall Double 11 Festival [7]. Undoubtedly, the
brand partnership between Viya and Estee Lauder has brought considerable revenues and public
interest to Estee Lauder, but it only contributes to 12.14% of the gross merchandise volume of Estee
Lauder's official online store on T-mall.
Table 3. Performance Comparison Between Viya Showroom and Estee Lauder T-mall Store
2020 Taobao T-mall Double 11 Average Transaction Value Gross Merchandise
Shopping Festival per customer Volume
Viya's Showroom Performance
on Estee Lauder Products 865.24 RMB 291.8 million RMB
(livestreamer-cooperation)
Estee Lauder Official Brand
E-Commerce Store Performance 711.42 RMB 2404 million RMB
on Taobao T-mall (self-operation)
Taobao T-mall also launched Presale and BigSale campaigns to initiate wider consumer
consideration and multiple purchase actions outside livestream showrooms. Social media and search
engine advertisements play an important role as an amplifier to spark public discussion, inform
livestream plays, enhance conversion rate in consumer decision-making. Those factors and the
ecosystem behind the livestream marketing model mutually achieve business success in online
retailing and livestreaming industries.
4. Conclusions
COVID-19 has accelerated the development of information technology and the digital economy.
The case study on the 2020 Taobao T-mall Double 11 shopping festival demonstrates that the
livestream marketing model can deeply affect five stages of consumers' decision-making process and
shift the emphasis that marketers and researchers focus on. Livestream marketing provides consumers
with both a frictionless shopping journey and a productive, entertaining experience.
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The problem recognition stage begins much earlier than the official launches of livestream
showrooms. Social media, e-commerce platforms, and livestream storytelling mutually guide the
target audience to recognize current problems in daily life and provoke potential consuming needs.
The engagement of the livestream marketing model in the information search stage is to become a
competent assistant on condensing comprehensive product information and price options for
consumers and reduce time spent on information-search and decision-making processes. Moving to
the stage of evaluation of alternatives, digital content creators in livestream showrooms filter high-
quality, trendy, and innovative products from a variety of niche markets, which are not commonly
available in physical stores. They help consumers make cost-effective purchase choices with
advocacy mainly based on creditable user experiences and reliable official brand partnerships.
Livestream showrooms are highly integrated with e-commerce platforms to convert audience into
followers, public traffic pools into private fan communities, entertaining content consumption into
actual purchase action. The majority of transactions are supported by direct linkage back to official
e-commerce stores with an authenticity guarantee and a cashless payment system. The mature
ecosystem behind livestreaming, such as supply chain, social media, Presale and BigSale campaigns,
two-day shipping, reciprocally generate a close loop after purchase action is accomplished and extend
the influence of livestreaming outside showrooms.
This article conducted in-depth research on a case study of the Taobao T-mall Double 11 shopping
festival in 2020 using the Five Stages Model, which might not be applicable in all situations. The
findings and insights may change in other situations, such as different cultures or regions. Newly
developed media technologies in the future may change the extent and methods that livestreaming
impacts each stage of the decision-making process of consumers as well. Further studies on
consumers' decision-making models, global livestreaming strategies and statistical big data analysis
are recommended.
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