Increasingly, customers are playing an active role in defining and determining the assortment. Consumers are no longer just passive recipients of what a retailer “thinks” they might want; they are active participants in the creation of the retail offer. From user-submitted ideas to voting on favorite products, retailers are ceding more control of the store to their customers. Or, allowing the customer to essentially drive product development to create a truly customized experience. Customers are creating “pre-tail” moments, helping retailers decide what products to make, what products to stock and even how they’re priced.
Let’s take a look at two cases on crowdsourcing from Retail Innovations 9.
Lidl, known for its product-driven and low-price strategy, changed its customer approach by putting its customers in charge. Lidl doesn’t select the products to put on promotion, its customers do via ‘Likes’ on Facebook.
The retailer vigorously uses social media to interact with its customers; and with its recent Facebook App, Lidl goes one step further. Customers can now freely express their desires as they can choose the products they want on promotion the following week. Every week a specific category is the center of the product promotion and customers can ‘Likes’ products in this category. The product with the most ‘Likes’ will be on sale the following week. The customized social media project not only resulted in more interaction but also contributed to an increase in sales.
The central idea of Lidl is that customers don’t have to search a number of promotional leaflets anymore for one particular product. They can now choose their own promotions.
With thousands of ‘Likes’ on product promotions the App gets more attention every week. Customers ‘Like’ products and in the end they ‘Like’ Lidl, which contributes to their overall customer satisfaction.
Quirky (USA – New York)
Quirky is a product company that utilizes crowdsourcing to not only bring inventors’ ideas to life, but also make them accessible in a relatively short amount of time. Quirky’s community members, inventors and product “influencers” all share in the product’s financial success.
Inventors submit ideas, community members vote on the best ones, users influence design while earning money along the way, and Quirky manufactures it for the world.
5 Steps to Creating a Quirky Product
- Inventors submit product ideas via the Quirky website
- Ideas are vetted by a community of over 200,000 users who vote for their favorites.
- Top-ranked ideas get reviewed by Quirky’s in-house team of experts, who pick one or two products each week based on design potential, differentiation and viability. The vetting process takes place in Quirky’s New York City facility and is streamed live to the Web.
- The winning ideas go through a series of developmental phases — research, design, branding, engineering, etc. — before being brought to market. Typically, it takes about 120 to 180 days to bring the product to market. That’s when the inventors, who originally submitted the ideas, are compensated, earning roughly 35 percent of revenues.
- The product is sold on the Quirky website and, if demand grows, by retail chains.
Quirky was founded on the belief that ordinary people have extraordinary ideas, and that invention should be accessible to everyone. Quirky branded products are found online and at America’s top retailers.
Quirky’s best-selling product is the Pivot Power, a flexible power strip invented by Jake Zien and 853 influencers, earning Zien hundreds of thousands of dollars for his influence on the project. Pivot Power is available at Quirky as well as Bed Bath and Beyond, Target, Barnes & Noble, and Amazon.com.
As consumers increasingly spend more of their time online and on various social media platforms, it only makes sense to solicit those opinions from your customers who are interested in having a voice. As the case studies above have demonstrated, crowdsourcing not only can lead to truly in-demand assortments but can also generate loyalty by establishing relationships through continuous customer interaction.
“…the world is becoming too fast, too complex and too networked for any company to have all the answers inside.” (Yochai Benkler, Professor at Harvard Law Business School and Author of “The Wealth of Networks”)
“The customer of the future wants to participate; they don’t want to be passive. This has been enabled by social media and the use of reviews. Smart retailers have already got the message.” (Maureen C. Atkinson, Senior Partner at J.C. Williams Group)
“Today it’s all about speed to market. Staying connected with your customers is one very effective way to do this.” (John C. Williams, Senior Partner at J.C. Williams Group)
About Retail Innovations 9
Retail lnnovations 9 is J.C. Williams Group’s and Ebeltoft Group’s (www.ebeltoftgroup.com) latest compilation of leading edge innovation, highlighting individual ideas and the key themes that emerge from studying the whole.
This edition features 54 of the best innovation cases from 23 countries and pinpoints the nine global innovation trends.
To obtain a copy of this publication, send an email with your name, company name, and telephone number to email@example.com.
Stay tuned for our next blog: Retail Innovations 9: Global Retail Trends 2013 Part 2—Curated Collections