Optimal sales strategies for an omni-channel manufacturer in livestreaming demonstration trends

Abstract

In practice, online livestreaming demonstration and in-store demonstration services for product sales have experienced rapid development. In response to consumers’ cross-channel access to product demonstration and showrooming behavior of purchasing products at the lowest price via each channel, manufacturers increasingly offer consumers more comprehensive product demonstration services by establishing an omni-channel market. Considering this emerging trend, this paper analyzes the optimal sales strategies for the livestreaming demonstration modes and the pricing strategies for an omni-channel manufacturer. Additionally, this paper further digs into the manufacturer’s dilemma under the influence of omni-channel retailing and consumer showrooming behavior when adopting livestreaming demonstrations. Initially, we consider a scenario where a manufacturer sells a product through the omni-channel, demonstrating its products in the offline store and hiring an online shopping influencer as the sales agent for the livestreaming demonstration. Subsequently, three modes are examined: non-livestreaming mode, basic livestreaming mode, and time-limited livestreaming mode. Through game theory modeling, we compare each mode’s optimal pricing strategies and analyze the omni-channel manufacturer’s preference for livestreaming demonstration modes and the influencing factors. The results indicate that while livestreaming demonstrations enhance consumers’ product valuation, the manufacturer cannot always achieve higher profits through the livestreaming demonstration. Besides, the time-limited promotion measures of the livestreaming mode are not always beneficial to the manufacturer. Furthermore, the impact of the livestreaming demonstration effort level of the sales agent, the browsing cost of different channels, and the impact of the livestreaming demonstration on product suitability are analyzed.