Business & Finance⟩Strategy
A Business Lesson from Modern Musicians: Focus on Emerging Markets to Increase Profit
Alan Draper Last updated: March 2, 2016
As social media took off over the last decade, retail marketing professionals celebrated a new era of customer outreach and subsequent discoverability, but things didn't quite turn out the way any of those professionals thought.
Douglas Holt writing for the Harvard Business Review perhaps put it best: "In the era of Facebook and YouTube, brand building has become a vexing challenge. This is not how things were supposed to turn out. A decade ago most companies were heralding the arrival of a new golden age of branding. They hired creative agencies and armies of technologists to insert brands throughout the digital universe. Viral, buzz, memes, stickiness and form factor became the lingua franca of branding. But despite all the hoopla, such efforts have had very little payoff."
This is because virality doesn't actually institute trust. This is because consumer attention spans are so incredibly short. This is because marketing and advertising no longer function in our traditional understanding of those mediums. After all, consumers can easily opt out of ads no matter where you place them. in this sense, word of mouth marketing only works if consumers continue the active, sharing action loop instead of passively consuming. In short, if it doesn't compel consumers to share with their own audiences , your efforts likely won't pay off.
And here's the kicker: it isn't just businesses feeling this crunch. These days, everyone is a brand. Personal branding has taken to new heights, with some niche experts becoming easily as popular as well known artists, musicians and other creatives. And this poses problems for those creatives –– many of whom are needing to find outlets other than their creative medium to actually turn a profit.
Embracing Emerging Markets
It is no coincidence that music festivals and concerts are the big buck moments of our day. Musicians, in fact, rely on them –– as well as brand sponsorships and influencer opportunities –– to make money. This is part of a larger trend in which musicians, as well as other creatives, dig into emerging markets for new profit.
Certainly streaming services has impacted this. With less money to be made on record sales, musicians need a new outlet. But, the music festival and concert industry growth is much larger than to be attributed to only one source. Festivals provide the photo-worthy moments consumers are increasingly demanding.
There's a lesson to be learned here, though, and by no means is all hope lost in working to build brand recognition. Yes, it's a competitive world out there. Yes, the speed of technology pivots companies more quickly than in the history of commerce. Yes, that strains the oft needed time requirement behind the most well thought out, and thus successful, creative strategies.
But no –– not everything need be viral or have mass social proof to increase discoverability, loyalty and ultimately revenue. Instead, you can do as the musicians: focus on emerging markets to increase profit. Below are the top emerging markets in the commerce space. These are the arenas in which your brand has the opportunity to quickly grow and scale, to become the first adopters for a generation of consumers who want documentable-worthy moments.
Long heralded as the anti-small business platform of the day, Amazon is becoming much less competitor and much more ally for businesses of all sizes. This is because nearly half of all online product searches begin on Amazon. Similarly to Google, if your products are not on Amazon, then your brand doesn't even compete for that purchase.
Mid-market brands like FUGOO and Son of a Sailor are already actively selling through a couple of Amazon's newer initiatives, aimed at bringing on completely unique SKUs. In addition, luxury brands, a target retailer Amazon has long tried to bring on board, are finally placing products on that marketplace. And one thing is for sure in the commerce industry, trickle down trends are real, and the trickle can almost always be traced back to luxury fashion brand initiatives from years ago. In other words, fashion retailers typically lead the pack in terms of industry trends.
Amazon can be tricky though and it's smart to test out multiple strategies to see which works for you best. For instance, if you have your own warehouse, you could save money by opting out of FBA and shipping from your own facilities. Fees can certainly add up. Then again, opting out of FBA often means you opt out of Prime customers who typically have higher average order values than the rest of the Amazon customer base.
It's a toss up –– and ultimately one your brand must learn to balance. But get it right, and your profits could skyrocket. It's a worthy bet to make.
With more than one billion visitors to Facebook Pages every month, Pages give businesses a mobile presence to connect with customers and communicate with them more easily. Facebook is now rolling out a prominent, dedicated Shop section on Pages where merchants can feature their products and create collections of products (e.g. "fall collection," "gifts for him," etc) to increase product discoverability.
The new Shop section on Facebook Pages is an improved experience over existing third-party Facebook Store apps because it works on mobile devices versus only on desktop. More than 1.3 billion people access Facebook through mobile devices each month, making the case for the mobile showcasing of products. The Shop section on Pages also provides a subscribe feature, where customers can receive notifications from stores when additional products and collections are published.
Best yet: all sales will be pushed back to your site. So, unlike on Amazon, where the transaction occurs on their platform, Facebook will push users back to your independent website. This should increase traffic, especially from consumers already further down the funnel than other traffic sources.
The Pinterest platform has more than 100 million monthly active users currently cataloging ideas and curating products they would like to purchase. Before Buyable Pins, users had to click through a Pin to a merchant's site in order to checkout. Now, customers can purchase an item without ever leaving the Pinterest platform. This allows for an increase in impulse purchases –– a behavior studies have found plays a critical role when consumers are shopping online.
For retailers, the introduction of Buyable Pins means Pinterest is now an opportunity for merchants to grow revenue by expanding into new and innovative sales channels, reaching consumers wherever they naturally discover products. Pins will be a crucial part of a multi-channel marketing strategy –– and its best to get started now. Why? Because the feature is still relatively new and many brands are still onboarding. Being ahead of the curve can give you an upper hand and help close the deal with consumers over competitors.
NEW!! Fresh squeezed juice for your skin. Meet my Vibrancy Argan Oil Foundation Fluid today https://t.co/KITHGJ5j0j pic.twitter.com/LjwxO4e8tG
— Josie Maran (@josie_maran) February 24, 2016
Twitter's Buy Now allows brands to offer in-the-moment purchasing experiences for repeat and net new customers without leaving the Twitter platform. For retailers, this increases product discoverability, offers improved ROI for social media efforts and increases brand awareness among Twitter's 316 million monthly active users.
Analysis of Twitter data reveals that customers are using the platform throughout the purchasing funnel:
67% use Twitter to learn about new products
54% use Twitter while shopping in in-store
64% purchased a product because of Twitter
Up to this point, most brands have been unable to serve immediate click-to-purchase opportunities to those customers without forcing them to redirect to another site. Now, retailers can collapse the purchasing funnel, offering in-the-moment buying experiences right when and where potential customers are considering them.
Cutting-Edge Shipping and Delivery
The ecommerce industry is experiencing a shipping and delivery disruption, led primarily by customer demand. Thanks to long-standing programs such as Amazon Prime, innovative up-and-comers like Jet.com and a strong mobile-local push by Google, today's customers expect short delivery times, low shipping costs and consistent packaging experiences for all brands, large or small. For brands themselves, the low profit margins associated with such programs may need to be considered a demand generation test, spurring customer lifetime value, rather than perceived as a loss in revenue.
In other words, free shipping on in-store pickup, while attractive to customers, might not be feasible for every brand out there. You can make them work, though, and doing so can help decrease cart abandonment –– which 56% of the time it occurs is due to unexpected shipping costs.
See Now, Buy Now
Does your brand host events or show new collections? If so, you are a prime candidate for the see now, buy now trend.
First launched at New York Fashion Week Fall 2016 presentations, "see now, buy now" is a flip on traditional shows and presentations. Instead of consumers needing to wait months to buy the new items, many fashion brands are allowing them to purchase immediately. This alters the production flow for fashion companies, but allows consumers to more immediately engage with products. This is a big deal –– because consumer attention span is short and even the bigger fashion brands are feeling the effects.
"It is the wave of the future," celebrity designer LaQuan Smith explained to ELLE in a recent interview, "and I want to be at the forefront. When I unveil my new collection, my customers will be able to see the clothes in person [at the show] and purchase them at the same time."
At the end of the day, scaling brands all have one thing in common: they are consistently first comers to emerging commerce markets and trends. Yes, your social fans are important and you should focus on growing those audiences. But equally important is testing out new waters, new markets and new trends. Stay abreast of what is happening in the commerce industry and work with your teams to build flexibility into job descriptions. Pivoting is hard, but in today's age, every brand –– whether an individual's own or a business' –– must typically learn how to do so graciously.
This article was written for Business 2 Community by Alan Draper.
Author: Alan Draper
Based in the United Kingdom, Business 2 Community editor Alan is part of the team that's responsible for ensuring all the content on our site is accurate, relevant and up-to-date. In addition to editing, he is also a writer and an expert on the stock market. Alan has previously written …
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