Imagine running an online store, where you don’t even need to hold the stock in order to make the sales. That’s the concept behind new social marketplace Wisemarkit.
Recent research found that Pinterest referrals are not only the second social-media traffic driver for e-retailers (behind Facebook), but pinners are also 10 per cent more likely to make a purchase and they spend 10 per cent more on average. While pinners are motivated by showing off their current or aspirational style, what would Pinterest look like if members received commission for sales of the items they recommended? That’s the business model behind US site Wisemarkit, which launched on 2 July 2012.
What is Pinterest?
Pinterest is an online pinboard site, where members can create boards and pin images they like. They can also comment, like and re-pin images from other members’ boards. Common themes include fashion, travel, health, interior decorating and recipes.
Harnessing social media
As the internet offers us more and more choices, curation is becoming increasingly important. In a recent Nielsen Global Trust in Advertising survey, 90 per cent of respondents said that they trust recommendations from someone they know. This makes social networks incredibly powerful marketing mechanisms, if someone is willing to promote your product or brand.
Shopping on Wisemarkit
Head to the virtual Wisemarkit high street and you’ll immediately be engaged by the quirkily illustrated shop fronts, with images of sample products in the windows. Click on a store and the shop owner’s 10 Wisemarks – product recommendations – are displayed. These items have been selected from Amazon and ShopSense and can include anything from books and computer games, to fashion and home accessories.
While shop owners as the curators can choose to recommend anything they like, many of them have chosen a shop theme, setting themselves up as a book shop, bike store or fashion boutique. They also get to choose a 16-character name for their store. This echoes what we experience in a real-life high street and makes it easier for browsers to know what to expect.
At first, every shop owner can display only 10 products at a time. However, successful sellers will earn the right to showcase additional products or add floors to their shops. Sellers can keep additional product choices in their virtual storeroom, allowing them to swap items to suit seasons or events.
Sales and commission
Shop owners promote their choices to their social networks, as well
as browsers on the Wisemarkit site. This means that if you have a large network, you have a better chance of someone making a purchase and earning the commission. If a browser on the Wisemarkit site likes your store, they can also choose to follow you, so they’ll be kept up to date with your selections.
If a customer decides to buy something, they click on the item and
are taken through to the ShopSense or Amazon checkout. This
means that Wisemarkit hasn’t had to build its own checkout system, plus many shoppers are familiar and comfortable with the checkout systems of these well-known retailers. For Amazon purchases, the seller and Wisemarkit split the commission on the sale 50–50, with the total commission varying from 4 to 15 per cent. At present, sellers who list ShopSense items are rewarded for generating clicks rather than purchases.
Limitations and possibilities
It’s early days yet for Wisemarkit. While the curation-and-commission concept is exciting, some commentators have pointed out that sales could quickly dry up for sellers who don’t have large social networks. There are only so many purchases you can expect family and friends to make, so “influencers” and gurus who have a huge social-media presence stand to benefit most from the current model. Ultimately, the success of the site may come down to how Wisemarkit, Amazon and ShopSense market the site, so that sellers can expect sales from people outside their circles who simply like their selections.
How could this work for my business?
Low-tech options: Offering loyal customers a gift or discount if they recommend you to a friend (who also gets an introductory offer) is a tried-and-trusted acquisition mechanism. Why not print some branded cards explaining the special, which loyal customers can give to interested friends and colleagues?
Social media: You might offer a discount if a product is re-pinned on Pinterest 20 times, or you might offer customers with 100 Twitter followers a special deal or gift with purchase if they tweet about your business. An app like Splurgy can help you manage incentives linked to social media.
Useful tools and resources
Wisemarkit is a new online retail site, where people can create their own micro-stores to recommend products. Sellers may earn commission if someone clicks on or buys a product.
The views expressed in this article are those of the author and the interviewees, and not of Australia Post.
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