Direct Selling via Social Selling

While it is often overlooked as a sales channel, the Tupperware model of direct selling continues to thrive today. According to the Direct Selling Association over 18 million people were involved in direct selling in the US in 2014 generating around $34.5 million in revenue. In the age of digital marketing the direct selling model is able to leverage online resources in extremely lucrative ways. Those engaged in direct selling are increasingly using social media to connect with potential customers in their personal networks. No longer is one’s personal network limited to those in their current and local network. Via Facebook direct sellers can engage with a much broader network of contacts on a regular basis. Coupled with tools like portable credit card readers and inexpensive/free customer relationship management software direct salespeople are much more enabled to optimize their networks than ever before. 

The Social Commerce Growth Wave

While still a small contributor to overall e-commerce sales volumes, social commerce is becoming hard to ignore. Social media driven e-commerce revenue grew 26% in 2013 compared with 16% growth in e-commerce overall. With the recent introduction of advertising on Instagram and "Buy" buttons on Pinterest social commerce growth has the potential to grow significantly. Currently Facebook is the primary driver with 50% share of social referrals and 64% of total social revenue but Instagram and Pinterest are likely to start taking share with the introduction of "Sponsored" posts and "Buy" buttons.

Before the introduction of sponsored posts Instagram was primarily used for brand building purposes but with the introduction of call to action tools such as LiketoOwn.it, it is also becoming an e-commerce tool. The visual and mobile-first nature of Instagram drives significantly more engagement than Facebook and Twitter. Brands can now capitalize on the higher engagement and credibility of recommendation factors to drive sales via Instagram. Even the sponsored ads on Instagram are much less disruptive to the user experience than say a Facebook ad or promoted Facebook post.

Pinterest recently introduced shoppable pins. They have the potential to drive significant conversion due to the search engine nature of the site. Consumers usually go to the site to search for things they are already looking to buy. By targeting users with shoppable pins based on past pins they have the potential not only to drive sales for their retail partners but also to increase engagement with their users by providing with what they are looking for. According to initial data shoppable pins are doubling the rate at which searches result in sales.  

Will Yahoo's Polyvore Purchase Pay Off?

Social commerce site Polyvore was purchased by Yahoo back in September for $230 million as part of Marissa Mayer's "MaVeNS," strategy to acquire more mobile, video, native and social assets. The site acts as a visual search engine for fashion products. They generate revenue through advertising real estate and affiliate fees providing Yahoo with another platform on which to leverage their advertising network.At present the company has around 9 million unique visitors per month, significantly below Pinterest's 76 million monthly visitors. The company plans to grow the user base through increased engagement with the fashion community, presumably through partnerships and/or influencers. For Polyvore, the ability to leverage the Yahoo name in order to establish valuable partnerships should accelerate growth but with Pinterest as the ubiquitous visual fashion discovery site it's unclear how Polyvore will ever catch up or compete. Pinterest's recent introduction of "Buy" buttons gives it yet another advantage as users can buy items directly through the site, a function Polyvore has been unable to add for technological reasons. After 8 years of operations Polyvore still has a major uphill battle to fight in the social commerce game. It will be interesting to see if Yahoo is able to monetize the ad real estate enough for the acquisition to have any positive returns.  

Chief Digital Officers are the Newest C-Suite in Luxury Fashion

Luxury fashion brands have been slow to adapt to the digital age fearing that somehow e-commerce and digital advertising would dilute their brand message. At this point they've all realized that digital should be embraced, not ignored as it better enables them to target customers, market their brand message and luxury lifestyle, and improve efficiency across organizations. Prior to creating the Chief Digital Officer role digital was dealt with by e-commerce and a subset of the marketing team. The emergence of Chief Digital Officers indicates a move towards an integrated digital strategy that touches all parts of the institution. It encompasses not only digital marketing, but also optimization around CRM, pricing strategies, supply chain efficiency and big data analysis.  

The latest indication of the growth of luxury brands embracing digital is LVMH's appointment of a former Apple exec to the Chief Digital Officer role. Using an Apple Exec to develop digital strategy for LVMH is a smart move as Apple and LVMH are actually relatively similar in many ways. Apple is a really strong global brand with luxury products and a relatively long legacy. LVMH can actually benefit significantly from thinking like Apple in terms of innovation and high impact marketing.

Yelp Winds Down Reliance on Display Ad Revenue

In an effort to improve the user experience and focus on mobile Yelp is reducing the number of display ads on its site. Users primarily access the site via the mobile web or the app so they are directing most of their attention to optimizing user experience via mobile. Given the nature of their business and the importance of a user friendly mobile experience it seems like a smart move. They are able to use native advertising effectively in a way that is beneficial both for users and clients. The better user experience on the app also reduces reliance on google and helps them compete with Google in the restaurant search space as customers increasingly use the app to search for restaurants rather than traditional search engines. The better user experience encourage customers to use Yelp as a search engine which should result in the ability to grow revenue via higher prices while winding down display ad real estate on its site.

High Fashion's Increasing Use of Digital

Luxury fashion brands have been reluctant to adapt to the digital age due largely to concerns about brand dilution. Many refuse to establish an e-commerce channel and digital marketing is kept to a minumum. A large number of the brands almost exclusively distribute through wholesale channels such as department stores and for these brands the focus has been on the buyer community, not the end user. Despite the minimal use of digital sales and advertising by luxury brands, live streaming of shows is now viewed as an integral part of fashion week and celebrities and socialites increasingly share the front row with fashion bloggers. At the latest fashion week 100,000 people watched shows in person while 2.6 million tuned in online. What was once a very exclusive event has been democratized in some sense by the ability to view the action live online. Previously, if you were not invited to a show the only exposure to it was through heavily edited, tightly controlled images and clips developed and released by the brand. Now everyone can view the show start to finish with no filter applied. It is an interesting shift in the fashion industry. Through livestreaming and social media brands that previously relied on an air of exclusivity to maintain brand equity are increasingly engaging with and embracing their customers via social media. There is now a multitude of ways to communicate a brand identity online and the more innovative luxury players like Marc Jacobs are testing the waters to see what works. It is interesting that social media and livestreaming have come ahead of e-commerce and digital marketing but my best guess is that it is just a matter of time before brands figure out how to move in that direction withouth threatening their brand identity and integrity.

VW Doesn't Want Anyone to Think About Them Right Now

In the midst of the much publicized Volkswagen emissions scandal the company has suspended most national advertising because according to VW's VP of Marketing, "Ongoing press coverage and negative consumer social sentiment in the marketplace has effectively drowned out any positive messaging." The constant feedback loop that is social media is resulting in the perpetuation and magnification of the story in a way that didn't exist before. The Volkswagen scandal would have gotten some news coverage before being considered old news by media outlets and petering out. Now they can't even advertise because any reminder of them sets the public off on another negative social media rant. In the information age a screwup like theirs which only impacted ~5% of cars sold this year is killing their reputation as a company and destroying customer faith and trust in the brand. It is likely that sales will suffer from this loss of trust for years to come. 

http://adage.com/article/cmo-strategy/vw-puts-u-s-ads-hold-amid-emissions-scandal/300584/

Far Fetch Opens E-commerce Platform for Brands

Renowned fashion/tech unicorn, Farfetch, announced that they will provide brands with a white-label solution for brands. Farfetch started as a marketplace that connected consumers with multi-brand boutiques around the world. Mono-brand sites recently gained access to the site and with this move the company is leveraging a variation on their current platform to provide brands with better ways to expand their market access. The new platform called Farfetch "Black and White" gives brands the ability to easily develop foreign-language sites for international markets, omni-channel sales functionality and easy integration with a variety of third party sales channels. The API-based functionality of Farfetch Black and White allows brands to seamlessly connect their sites to WeChat in China or directly to the Farfetch site providing them with access to a large global network of customers. Details on how much this new platform is expected to drive their growth strategy have not been released but Farfetch has made it clear that they plan to be at the forefront of the future of retail.

http://www.businessoffashion.com/articles/bof-exclusive/farfetch-e-commerce-fashion-brands-omnichannel

How Under Armour Uses a Scrappy Outsider Will to Get What it Wants

It has been hard not to notice Under Armour's rise to power. It took 19 years for the brand to be a major contender against Nike but it has really been in the last few years that the once niche sports apparel brand harnessed the power of digital marketing to get to the size and recognition that it enjoys today especially when it comes to women. They have done an exemplary job of recognizing who they are as a brand, who their customer is and could be and the best way to reach their target audiences in a digital age.

Under Armour launched their highly successful women's I Will What I Want campaign on YouTube. With the longer video format they were able to tell a much more moving story and provoke an ongoing discussion that will forever be tied to their brand. The campaign was their most successful ever earning 3 billion earned impressions. Under Armour has also adopted a data-driven approach to marketing. Through the acquisition of MapMyFitness, MyFitness Pal and Endomodo the company is not only tying itself to the journey people go through everyday to reach their fitness goals but more importantly acquiring customer data on workout, eating and sleeping habits. The company has also capitalized on the power of social media with the use of campaign-specific hashtags and the sponsorship of fitness instructors with strong social media followers.

http://www.fastcocreate.com/3050420/behind-the-brand/how-under-armour-uses-a-scrappy-outsider-will-to-get-what-it-wants

https://www.youtube.com/watch?v=ZY0cdXr_1MA