As online social connections multiply, traditional retailers are seeking out new ways to tap into the potential of word-of-mouth marketing. One referral system rapidly gaining popularity is the “earned advertising channel”—a model that, like direct selling, rewards consumers for becoming advocates of the brand.
In the digital world, many brands are incentivizing customers to recommend products to their social connections through white label referral sites. UK-based MarketingWeek recently reported on the growth of white label sites such as Shopa, a service launched at the beginning of October that currently boasts 9,100 participating retailers, up from 5,600 just three months ago.
The article points to research showing that 81 percent of consumers said friends’ social media posts influence their choices (Word of Mouth Marketing Association). When it comes to brand advertising, more consumers—84 percent—trusted “recommendations from people I know” than any other form (Nielsen’s Global Trust in Advertising and Brand Messages report). Less effective forms of advertising include branded websites (69 percent), TV ads (62 percent) and emails (56 percent).
Through Shopa, consumers can log in to “share and earn” by recommending participating brands to their friends and social contacts—something people tend to do anyway. “It’s not a new behavior. What we provide for retailers is the ability to financially incentivize and amplify that action,” said Shopa chief executive Peter Janes.
The advent of Shopa and similar digital offerings reflects how “traditional retail is beta-testing new growth models and shifting the cash they spend on store openings into these beta tests,” as J.Hilburn CEO Hil Davis points out in his recent Top Desk feature. For traditional retail brands attempting to further their reach by turning consumers into brand advocates, the necessary expertise lies in direct sales—a model that Davis compares to “franchising on steroids.” Davis also frames the looming shift in retail practices as an opportunity for direct sellers to mutually benefit from the resources and technology of their mass-market brethren.