Warc Blog

Retailers incentivise WOM

18 July 2013
LONDON: Major online retailers in the UK, including Amazon, Argos and Tesco, are planning to introduce a scheme that will pay consumers to share product recommendations with their friends.

Shopa, designed by a start-up of the same name, enables consumers to make product suggestions via a personalised weblink. They will be paid if the recipients go on to buy that product.

Marketing Week reported that more than 5,600 ecommerce companies, including most of the biggest online retailers in the UK, had signed up to the scheme.

It operates by placing a Shopa widget button next to other social buttons on retailers' product pages, with brands able to customise the displayed text. Publishers are also able to include Shopa URLs in their marketing campaigns and get cut of any sales made.

Retailers can choose their level of incentive, while consumers can withdraw their accumulated funds from their Shopa accounts at any time.

Whether such paid advocacy is capable of constructing long-term relationships with consumers is another matter. Martin Hayward, head of global digital strategy at Aimia, argued in the latest issue of Market Leader that such relationships would be difficult to build in a data driven world of short-term offers and rewards where consumers were selling their personal data to the highest bidder.

But among the companies that have been trialling Shopa, fashion retailer Oasis called it a "game changer", while furniture retailer Feather & Black said the approach was "the future of retail".

A cautionary note came from Stuart Evans, UK general manager of loyalty marketing agency ICLP, who warned that consumers could try to monetise the opportunity.

He added: "The danger is denting the trust of the referral and also, for a brand, exposing how much you're willing to discount, which could mean [online retail] becomes a tactical, price-driven, competitive environment that drives down everyone's margins."

Rather than offering cash he suggested that Shopa technology could be placed within existing loyalty programmes and affiliate sites with points earned for each referral.

Data sourced from Marketing Week; additional content by Warc staff

 
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