Whether and how to use live stream for the retailer considering consumer preference? The impact of platform traffic pricing decisions

Purpose Although the trend of livestream sales has become more prevalent due to expanded consumer awareness, choosing a livestream channel may not invariably present the optimal choice for consumers with different value preferences. Design/methodology/approach In this study, we construct a game-theoretic model to investigate the impact of a platform's traffic pricing decisions on different channel structures (single online channel, single livestream channel and hybrid channel) in a supply chain consisting of a platform and a retailer. We classify consumers into two types, shopping-preferred (SP) and content-preferred (CP), and identify vital elements to assess livestream sales performance according to the sales conversion rate of traffic, the streamer’s influence and consumers’ preference value. Findings We find that traffic pricing increases with the improvement of sales conversion rate of traffic in both single livestream and hybrid channels and that three-channel strategies can be the best options, respectively, under different situations. SP consumers prefer a single online channel with a high sales conversion rate of traffic and low streamer influence, a single livestream channel with a low sales conversion rate of traffic and a hybrid channel with a moderate sales conversion rate of traffic and high streamer influence. CP consumers prefer a single online channel under a moderate sales conversion rate of traffic, a single livestream channel under a low sales conversion rate of traffic and a hybrid channel under a moderate sales conversion rate of traffic, low streamer influence and high cross-channel effect. Originality/value This study enriches the literature on platform and retailer strategies for SP and CP consumers, examining the impact of the cost of consumer watching live streams on equilibrium outcomes and emphasizing the need to incorporate cost considerations in the supply chain.