Approaching the Spring Festival, it is time to buy New Year's goods once a year, but unlike the conventional configuration of melon seeds, peanuts, milk, meat and poultry, the first New Year's goods to sell this year come from the life service category. At the beginning of February, a "Eat, Drink and Play Festival" of Douyin Life Service gathered McDonald's, Starbucks, Banyan Tree, Marriott and many other life service businesses, and consumers also poured in to participate, winning food, drink and entertainment cards and coupons through sharing, and arranging the Spring Festival schedule clearly in the morning.
The Spring Festival has always been a marketing position for merchants to strive for, and various marketing activities in previous years have also been very lively, but if you think about it carefully, the so-called online shopping for the New Year's Festival, brand red envelopes and other involved methods are actually online-to-online marketing ideas, consumers have fun online, but there is little correlation with offline scenes. However, this year, Douyin focused its marketing on eating, drinking and having fun during the Spring Festival boom, that is, the life service sector, and the seemingly unpopular choice really covered the previously ignored "New Year's goods" consumption scene, so it found a differentiated breakthrough entrance in the Spring Festival marketing that was rolled up.
Of course, marketing tricks are just a spark to detonate consumption, and consumers are keen to participate in this kind of eating, drinking, and playing New Year's Festival, or because the industry itself has accumulated enough potential energy. Looking at the data, looking at consumers, and then looking at merchants and platforms, it is not difficult to find that the life service industry is undergoing a comprehensive upgrade from the demand side to the supply side, and it is this trend of upgrading that drives the industry to embark on the fast lane of growth.
The demand-side upgrade has driven the steady growth of the industry
Observing the changes on the demand side, that is, on the consumer demand side, it is not difficult to find some key drivers for the growth of the life service industry.
The resurgence of offline services has led to the growth of life service entities.
The enthusiasm for returning to offline is unstoppable. The young Lin Han has already arranged his offline life during the Spring Festival, before the festival, he and his sisters went to the hair and nail salon together, took his parents to watch a movie on the first day of the Lunar New Year, took advantage of the visit to relatives to check in the nearby Internet celebrity restaurant, and went out to the snow resort in the last few days......
It is not uncommon for people like Lin Han to yearn for a "full (real-life) life". According to iiMedia Research, in 2023, 45.0% of the surveyed users will purchase and use in-store services 4-6 times a week, and nearly half of them will place high-frequency orders for in-store life services.
Experience before consumption, and upgrade the pre-purchase experience to drive the growth of the industry.
As a life expert, the young Lin Han is actually very good at "doing homework". Whether it's staying in a hotel or dining out, checking word-of-mouth scores is a basic operation, but recently, she has taken one more step in her homework before placing an order, and that is to search for business-related store visit videos. The shooting explanation of the store explorer is very detailed, following the camera, and even without placing an order, it seems that he has experienced the whole process of consumption. This made Lin Han feel more at ease when consuming.
In the life service scene, behind the behavior of Lin Han who loves to do homework, there is a hidden emphasis on personalized experience. In addition to looking at the location, you also need to look at the decoration and supporting entertainment facilities......
Consumers' escalating demand for pre-purchase experiences is so small that it's clear that ratings and short reviews alone can't be satisfied. The emergence of short videos and live broadcasts has allowed consumers to meet their needs for upgrades. According to the Douyin Life Service 2023 store visit data report, in the first three quarters of 2023, there will be 1.27 billion short videos related to Douyin store visits, and store visit videos in attractions, drinks, Western food and other formats have attracted the most attention. At the same time, store explorers increased revenue by 193% year-on-year for merchants, and live streaming increased revenue by 10 times year-on-year. By meeting the needs of consumers for upgraded experience, the life service industry is ushering in a window of exponential growth.
Savvy consumption, preferential treatment is still an important driving force to attract orders.
Savvy consumers will not give up the opportunity to find discounts, just like Lin Han, before going to the restaurant to check out, they will also compare preferential group purchase plans on multiple platforms, and when buying milk tea, haircuts, and nail art, they will also search for coupons in advance. According to the data released by iiMedia Research, in 2023, among the directions of business improvement expected by Chinese in-store service users, "rich preferential activities" ranked first with 47.1%.
This also makes it easy for us to understand why the "New Year Eat, Drink and Play Festival" of Douyin Life Service can attract many consumers to participate. The gameplay of "getting free orders every day and winning big prizes" can get 100% preferential cards and coupons through simple sharing fission behavior, and it is possible to directly get tickets and overlord meals, and this kind of "hard currency" in the field of life services is still significantly attractive to consumers.
Overall, today's consumers are showing a strong demand for lifestyle services. At the same time, their decision-making process is escalated, requiring sufficient word-of-mouth input and pre-consumption experience. Plus, they're more shrewd and picky. Merchants who can capitalize on these upgrade trends will gain new growth opportunities.
The supply side is upgraded, and the new model responds to new growth
If you often watch short videos, you should have seen short video showdowns of cultural tourism in various places. In order to better attract tourists to local consumption, cultural tourism in various places has rolled up to a new height in the creation of content. And this is a typical microcosm of the supply-side upgrading trend of the life service industry, that is, good content creates good business.
Nowadays, many life service businesses are gathering on content platforms, such as Douyin, which released data that in 2023, the number of cooperative stores with dynamic sales of Douyin life services will exceed 4.5 million, and the number of Douyin life service stores will cover more than 370 cities. On this platform, which started with content, people share their daily lives, which naturally creates a touch point of life consumption, connecting content and life service consumption itself.
Of course, not everything will be fine once you land on a content platform, and creating good content is still a big challenge for merchants. Merchants still need a relatively mature content production system to help them operate.
This also explains the rapid growth of the "store explorer" group on Douyin. Douyin data shows that the number of influencers who will earn income in 2023 has reached 1.65 million. On the other hand, industries such as catering, hotels, travel, and beauty have released store visit needs through the Douyin platform. Building a content production system based on talents, and a platform for smooth connection between content and demand, has also become a major symbol of the gradual improvement of content supply infrastructure.
At the same time, the investment of life service businesses in the field of marketing is also continuing to upgrade, and the gameplay is constantly updated.
Before the Spring Festival, more than 50 brands and merchants joined in the "Get Free Orders Every Day and Win Prizes" event, arranging the supply of content, goods, and marketing methods to create a Spring Festival carnival that does not close. In terms of content supply, more than 100 official accounts of companies have joined the camp of marketing campaigns, producing rich and diverse content and planting grass for consumers. In terms of commodity supply, companies have made great efforts to come up with free order benefits, including the Chimelong Annual Card, Banyan Tree two-night stay, and Xiaolongkan All-you-can-eat Card. In terms of the supply of marketing gameplay, the interactive gameplay of fission has been well known to consumers, and under the stimulation of the supply of high-quality goods, consumers do not hesitate to click on the sharing button.
In addition, more brands are also trying to take advantage of the popularity of the life service scene. For example, among FMCG brands, some beverage brands will try to cooperate with catering merchants to launch brand-exclusive packages, and then combine the content communication of influencers to visit stores to form a "life + brand" communication model. In some popular local consumption scenarios, such as restaurants, ski resorts, campsites, etc., it is also common to see international brand drinks, well-known car companies, and 3C companies.
Many enterprises are vying to be "life partners", obviously seeing the growth trend of life service formats. According to iiMedia Research, the scale of local life services has continued to expand in recent years, and the willingness to consume has grown steadily, and it will continue to grow in the future, and the industry scale is expected to exceed 2.5 trillion yuan in 2025.
Nowadays, life service businesses have opened their stores on short video platforms, they have learned to make videos and live broadcasts, and a new content-based ecology and business chain is also being built. But in fact, both the market potential of the life service field and the potential energy of short videos and live broadcasts in the life service field have not yet been fully released, and there is still a lot of room for imagination. According to the "2023 Douyin Life Service Annual Data Report", Douyin users will search for life service-related content 59.3 billion times in 2023. The opportunities lurking in the data are clear. With the further improvement of strategies, tools, and ecosystems, the consumption potential of tens of billions and billions is also expected to be further developed, helping life service businesses to continue to chase growth.
Liu Yue | wen
Liu Yue is the planning director of the Chinese New Media Center of Harvard Business Review