Crowdsourcing can enable retailers to scale more quickly
Retailers are seeing an increasing expectation from their customers for personalization, and that leads to a greater need to get data directly from them. Here’s where crowdsourcing may come in.
Crowdsourcing is the act of getting ideas, services or marketing materials by surveying a physical or digital community –– and it promises to enable retailers to make better business decisions in less time.
“Many large organizations are too slow and speed is what really matters in this digital economy,” Epi Ludvikj Nekaj, founder and CEO of Crowdsourcing Week, told Entrepreneur. “Innovation should not be treated as a separate, isolated department. Today you need to pioneer your innovation journey. Crowdsourcing accelerates this process and can get you up to speed quickly.”
Yet, there are more benefits to crowdsourcing than simply shortening response times. Sourcing Journal cited a recent MakerSights report, which found 66 percent of people want a say in how their products get made. Seventy-five percent said that being involved in the creation process would change who they buy from and increase their brand loyalty.
Advocates maintain that giving customers a say in how products are made can reap large dividends for retailers over time and that crowdsourcing could revolutionize many aspects of the industry –– from retail real estate to product sourcing to home delivery.
“Instead of assuming a market would respond well to a new grocery store, we can ask thousands of people in that market if they would shop at a new grocery store,” Benjamin Cohen, Space Jam Data’s co-founder, told Bisnow. “Aside from traditional surveying, there’s never been a way to do that before at scale.”
Crowdsourcing platforms enable retailers to quickly gather customer data through social media surveys, as well as paid survey sites such as SwagBucks. Since the surveys are largely operated online, retailers can easily gather real-time data insights and put them to work.
“The future is human-centric,” said Mr. Nekaj. “It’s all about participation and the ability to co-create via an increasingly connected world. This new way of doing things (crowdsourcing, crowdfunding, co-creation, collaboration and open innovation) is challenging established business models and how companies work across the board.”
Discussion Questions
DISCUSSION QUESTIONS: What do you see as the best crowdsourcing use cases for retailers looking to grow their businesses? What are some obstacles to crowdsourcing for retailers?
Poll
BrainTrust
Ken Lonyai
Consultant, Strategist, Tech Innovator, UX Evangelist
Adrian Weidmann
Managing Director, StoreStream Metrics, LLC
Crowdsourcing is good but overhyped. Thanks to technology, it’s a contemporary update to focus groups. Well executed, I believe crowdsourcing can outshine focus groups and the rapid scalability and real-time data offer additional advantages, but it’s no panacea. Retail success demands keen listening skills and crowdsourcing is just one avenue to deliver it.
Ms. Glasheen states, ” it promises to enable retailers to make better business decisions in less time.” That is absolutely wrong. There are very specific conditions under which crowdsourcing gives you good information and those are rarely if ever met. If you don’t care about the quality of the answer or how representative your sample is (of your customers, of your competitors, of all shoppers) this is a great idea. Otherwise, call me – I have a bridge to sell you.
Crowdsourcing ideas and opinions is brilliant. You have to be wary to avoid creating the next Edsel (disaster car built from crowdsourced ideas). But when used well, the “wisdom of the crowd” can be astonishing. Besides all this, retailers need to be in tune with their customers, so really should be crowdsourcing ideas and opinions constantly.
The biggest obstacle is trying to get serious engagement. Generally, you will have to pay for this (prizes, fees, etc). However, even when the customer engages, it is a matter of crafting questions carefully such that they do answer honestly – and are paying attention (not just trying to get to the end quickly to claim the prize). No different than standard research challenges.
There is a natural sense of confidence when you solicit your target audience for feedback, however it needs to be tempered with the way you solicit the information. For instance, we have seen consumer surveys produce findings that the retailer should carry more product variety, AKA “SKUs.” However, real-world statistics show that in high-SKU-count stores, very often more than 80 percent of the sales volume comes from only 20 percent of the SKUs. So be careful what you ask and you will hopefully be able to better trust your findings.
Every method has its advantages and disadvantages. Crowdsourcing is no exception. It can offer a retailer a unique perspective but those insights need to be combined and vetted with other perspectives. Together these will provide more accurate conclusions and recommendations. There are companies using crowdsourcing to conduct in-store, at-shelf inventory and compliance data for brands — hardly scientific but the fact that brands are buying this data shows the extent of the gap in the supply chain visibility. How can you provide a seamless and trusted omnichannel experience to your shopper/customer when you’re running blind at the store?
Crowdsourcing? Groupthink or viral focus groups? Macro vs. micro business solutions. Solving for where to open a new grocery store is completely different than knowing or understanding an individual customer under the much sought after banner of “personalization.” Internally retailers are already loaded down with the politics of groupthink. Layering on crowdsourcing raises the question, who will be the arbiter, the ultimate authority within a retail organization to pass judgment on the newfound, interconnected, human-centric survey outcomes?
By definition crowdsourcing for answers is a macro outcome, the will of the crowd. Which raises the next question. What is the value of crowdsourcing to an established retailer? A rhetorical question grounded in hypothetical opinions?
Crowdsourcing is as susceptible to bad data as other survey processes. As Stephen pointed out, the wisdom of the crowd is only as good as the crowd’s mirroring of your customer base and their interest in providing you quality feedback. As with all survey processes, the results have to be reviewed for they are – someone’s opinion. At best they are indicative and not a commitment to action.
Speed at the cost of depth. The problem with crowdsourcing is that in many cases it just points out the obvious that we might have missed in a review. A smaller sample size will usually provide very similar outcomes, so explicit benefits for understanding are just not there. Reinforcement of other data and safety checks to executing initiatives (that might backfire or have unintended consequences) is where I’ve seen it best used. How the data is collected, leading questions, bias and adjacent questions will have tremendous impact with higher room for error. Crowdsourcing will give a very superficial view of customer needs sentiment or direction.
“… speed is what really matters in this digital economy.” Actually, getting things right is what really matters in a digital economy (or any other kind, for that matter).
I’m not saying crowdsourcing has no place. On the contrary, coupled with expertise it can make a winning combination. But in place of expertise? Fire all the old hands and turn your product development and marketing departments over to a smartphone survey or facebook discussion? No.
We’ve always said, listen to your customers because they’re smarter than you — it’s important to get their opinion. Crowdsourcing is just a different version of finding out what your customers want. And just like any other method of gathering consumer opinion the results have to be vetted by someone who knows the product. Consumers can’t completely steer the ship; but crowdsourcing can provide additional, important data.
Crowdsourcing can get on-the-ground insights into more store locations at scale than other, more traditional data collection methods. For retailers, this can be a great way to hear directly from shoppers how store operations are working, whether associates are well-trained, and much more about front-of-store conditions.