Here at Showroom, we have over 300 independent merchant partners, and we hear all the time how difficult and expensive it can be for independent brands and retailers to attract traffic via traditional forms of advertising.
In this post, we wanted to explore some of the issues we hear about and tell you about an alternative created specifically for independent retailers.
WHY TRADITIONAL FORMS OF ADVERTISING ARE FAILING INDEPENDENT RETAILERS
Take one look at the Shopify and Woocommerce discussion forums, and you will see that they are littered with thousands upon thousands of questions like “how do I attract traffic to my site” “why is SEO so expensive” and “I don’t understand programmatic ads”.
One thing rings out: it is difficult and expensive for smaller merchants to attract traffic via conventional ad platforms, affiliate networks and programmatic networks. And, if you look at these forms of advertising, it is not hard to see why this might be.
Consumer fatigue and ad blockers mean that display ad click rates have fallen off a cliff – down from 10% in 2000 to under 0.05% in March 2017. Though click rates from paid search are somewhere better (around 2% average), as anyone who has tinkered with Facebook ads and Google Adwords knows it’s a costly endeavour. Likewise, organic search and SEO take a long time to pay off and can be very hard to compete with the likes of Google and Amazon on; it requires significant internal resources and expertise to do properly.
Affiliate networks are often hard to use as they are not built with independent retailers in mind, tracking of sales can be a problem, particularly on mobile, and tracking of engagements and interactions lower down the purchase funnel even harder.
And, if you’re one of the thousands of advertisers running programmatic ad campaigns, you’ve likely had to evaluate more vendors than you ever imagined possible – the latest intelligence suggests that the average programmatic campaign requires more than a dozen partners – across data, workflow and measurement, to execute successfully.
So, understandably, many up and coming brands resort to attempting to strike deals with mainstream department stores, or well-known online marketplaces. But although there are benefits of the emerging brand/ big retailer relationship in terms of exposure and trust, there are significant downsides – most notably the high commission but also payment terms and logistics.
THE RISE AND RISE OF INFLUENCER MARKETING
All of which in part explains one of the advertising’s key trends of 2016: the boom in influencer marketing.
So what is influencer marketing?
In brief – where consumers look to fellow consumers to inform their purchasing decisions – that ‘fellow consumer’ usually being someone with a following on one or more social media channel.
And why is this a good thing for independent retailers?
Because, in short, it removes the reliance on traditional forms of advertising and department stores/ online marketplace.The key point here is that influencers not only have an audience, but that audience trusts them, and that is the MOST powerful type of recommendation. And it is why influencer marketing brings many of the same benefits for brands in terms of direct exposure to audiences and the credibility that comes with being recommended by a trusted source but without the punitive cost of signing up to an online marketplace or a multichannel department store.
And, unlike traditional forms of advertising, influencer marketing is proving its value as an effective marketing tool for small and medium businesses: there are few things that drive a sale more effectively than a warm word of mouth recommendation. A recent study by McKinsey found that not only did marketing-induced consumer to consumer word of mouth generate twice the sales of paid advertising but those that were acquired through word of mouth had a 37 percent higher retention rate.
It also has various other advantages: it’s native advertising which doesn’t interrupt the consumer experience, it’s still relatively cheap in comparison to other ads, and it helps with SEO.
Where Showroom fits in this
It is not news that 2016 was a bumper year for the influencer marketing industry and there are a number of influencer marketing platforms that aid influencer discovery, payment and campaign management. However, there are very few are targeted at independent retailers.
Most influencer marketplaces are aimed at large retailers and brands who have sizeable budgets to spend on sponsored content. Their influencers tend to be those who will not ‘get out of bed’ for anything less than a four-figure sum (or more), and many of them charge joining fees commensurate with that. Hence they are not accessible to many smaller independent brands.
By contrast, Showroom is the only influencer marketplace which has been built specifically for independent retailers. We do not charge sign-up fees, and because our influencers have signed up to Showroom precisely because they love discovering unique, high callibre content from non-mainsteam brands, many of them will work for budgets that work for smaller merchants.
Furthermore, one of the key trends in influencer marketing in 2017 to date is the ability of brands to work smaller ‘micro’ influencers that have built very deep relationships with their niche audiences. Micro-influencers can be particularly important if your campaign is targeting a very specific set of audience, for example, location-based. And, crucially for smaller brands, who might not have the huge budgets of high street brands to allocate to influencer campaigns, micro influencers tend to work for much less, but because they have a very deep relationship with their niche audiences drive better engagement. A recent campaign by Bloglovin’ found that this drove over 2x more engagement than comparable campaigns with larger influencers. Showroom services this trend well with its long tail of smaller and mid-size influencers.
Is it hard to join?
In a word, no. We know, because we have been there ourselves, how precious time and resources are when you are a small business owner, and Showroom has been built to make it as easy as possible for everyone from sole traders upwards to join.
It takes just a few minutes to join and you can then immediately start searching for and reaching out to influencers that fit your brand, and who are likely to match your budget.
And, unlike most affiliate platforms, we offer a full technical integration to most of our partners (depending on the e-commerce software you use, but we work with most). This gives you the option of allowing your products to be put directly in front of our influencers’ audiences and sold directly via one shopping cart. This avoids many of the tracking problems associated with affiliate marketing and means you can truly measure the effectiveness of your sponsored content campaigns, across influencers and across sectors.