This is a guest post by Tophat, an online marketplace.
Looking for new channels to sell on in order to sell more and increase profitability?
Discovery commerce is a growing trend that's being adopted by leading eCommerce players to achieve just that.
But what exactly is discovery commerce? And how can you implement it within your online business?
Below, we have discussed this trend in greater detail, while outlining how exactly it can benefit your business and more importantly the steps you need to take to ensure that as an online seller you are saving both time and money.
Introducing Discovery Commerce
“Whoever said money can’t buy happiness simply didn’t know where to go shopping.” - Bo Derek
For many, shopping is about the thrill of the hunt, with many consumers actively looking to discover a product they didn’t even know they needed or wanted.
It is this concept that is changing the way brands should be selling their products.
One of the marketplaces that has recognised this change is Tophatter, a mobile shopping marketplace.
As a discovery shopping marketplace, 90% of products on the site are purchased without the buyer having actively searched for them. Instead, these customers are going directly to the app or website and being presented with 100 products on the homepage, all selling in 90 second auctions, one unit at a time.
According to Austin Henggeler, Head of Account Management at Tophatter, knowing customer intent is key.
“When it comes to discovery shopping, you have to keep in mind that the consumer has no idea what they are looking for. That means, unlike with Amazon, the customer isn’t looking for an exact match”.
Henggeler further recommends that as a seller you should be offering products with a broad appeal, in order to attract users who may be interested in your products for different reasons or purposes.
There are a few different types of needs that shopping fulfils. Firstly, you have shopping as a utility – you shop for clothes because you need clothes, you shop for a chair because you need something sit on. These are things that are necessities.
Next, you have shopping for leisure. You may have extra time or money and shopping is where you choose to expend those excess resources. This is when you get the TV for your bedroom, or the more expensive brand of handbag. These fall into the ‘want’ category, as opposed to ‘need’.
Finally, you shop for surprise and delight. Impulse buys and gifts generally fall into this category. These are things that make people smile. It’s a completely different experience than going to the store and buying a toothbrush. Discovery shopping is the kind of shopping that brings the most pure joy to the buyer and/or receiver.
So, what are the specific benefits of selling on a discovery shopping marketplace?
You get your inventory in front of millions of new customers who love to shop. Imagine putting your inventory in the checkout lane at a popular store where thousands of shoppers pass by each day. If you sell attractive items, that shopper traffic is going to convert to sales.
When selling on marketplaces that are focused on discovery shopping, you also get quick feedback into which of your products are most popular amongst customers. According to Electronics Wholesale who sell over 6,000 items a month on Tophatter, “You have to be proactive, meaning you have to watch your metrics daily and stay on top of your inventory if you want to grow. I’m always checking my dashboard metrics to find products that are working so I can continue to source these”.
With discovery marketplaces such as Tophatter adding significant sales volumes for online retailers, an obvious next question is how can time-constrained online retailers manage a new marketplace?
Using an Inventory Management Solution to support business growth
“Time is money.” – Benjamin Franklin
Making the decision to start using an inventory management solution can help you save time and money when it comes to listing products, fulfilling orders and making purchasing or manufacturing decisions.
While no retailer can 100% accurately predict consumer shopping behaviour and demand, they can prepare for it by having all of their sales and order management in one place.
Heneggler offers some suggestions on how retailers can properly prepare for sales growth by recommending that retailers use software solutions like Linnworks to better manage and predict inventory needs.
“A lot of sellers simply think they can do this on their own, but more often than not this doesn’t work. Inventory management software is a vital solution. Not only will these services help with your basic inventory management needs, they will often provide insights and reporting that will help you project for the future, particularly if you are selling on multiple online marketplaces”.
“It’s really important that you diversify your sales. Some marketplaces will take off and others will die out relatively quickly. Keeping your eggs in one basket puts you at risk”.
“The only thing that is constant is change.” – Heraclitus
With this in mind, online retailers who embrace new shopping trends such as discovery commerce to reach new consumers, while also using inventory management software to manage their sales growth, are positioned to be leaders in the next phase of disruption in retail and eCommerce.