The Impact of Coupon Strategies on Live Streaming Decisions

Abstract

In recent years, an increasing number of branders are utilizing live streaming to attract more consumers. To promote sales, brands will issue corresponding types of coupons according to different live streaming scenarios, which will then have an impact on the normal sales stage after the live stream ends. This paper considers the randomness and fuzziness of consumer demand and constructs a two-stage model of live streaming sales and normal sales. In the live stage, we focus on analyzing the impact of not issuing coupons, issuing host-exclusive coupons, and issuing live-streaming single-item coupons on branders’ decisions during live streaming. We design a hybrid algorithm combining stochastic fuzzy simulation techniques and simultaneous perturbation stochastic approximation to analyze the impact on branders’ inventory strategies in both stages. The results show that issuing coupons in live streaming may not necessarily benefit brands; when the face value of the coupon is small, offering live-stream single-item coupons yields the greatest profit; and when the consumer’s demand is a fuzzy random variable, the feasibility of the hybrid algorithm is verified through simulation, and scientific management suggestions are provided for branders on what kind of coupons to issue in live streaming and how to maximize revenue from live streaming sales.

Keywords

Live streaming / random fuzzy demand / coupons / newsvendor model / inventory strategy

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Systems Engineering Society of China and Springer-Verlag GmbH Germany