Written by Paul Burke, Director of Business Operations, Groupshop
Ask most e-commerce marketers about their word-of-mouth strategy and you’ll likely get a blank stare.
It’s the ‘shadow’ of digital marketing.
We know it’s important, but we don’t see it on our dashboards or invest in growing it as a channel, nor do we know how. We just know it’s there.
Word of mouth is likely to be the most important channel for e-commerce brands over the next 5 years.
But times are changing. Word of mouth is likely to be the most important channel for e-commerce brands over the next 5 years, a major shift from the strategy that dominated the 2010s.
July 2021 privacy updates from a top technology organization ended a modern gold rush in which marketers could confidently invest $1 in other prominent software firms and expect to see $3 or $4 back. Scale that budget by thousands of dollars a day and you had yourself a million-dollar DTC business in no time.
Those days are (mostly) over. I’ve talked to 50 of the most successful e-commerce brands and all but two have been dramatically impacted by these privacy updates, six months after the fact.
This shift has created a flurry of excitement for Groupshop, as brands hope to capitalize on the unicorn that is word-of-mouth marketing.
Here are three reasons why the future of e-commerce will be shaped by word-of-mouth marketing
Everyone Is A Creator
It used to be that if you wanted to work in entertainment you moved to Los Angeles and waited tables for three years before getting your first gig and building from there.
TikTok has changed that trajectory and helped us see that creative careers are no longer limited to those daring enough to move to Hollywood to follow a dream.
Consider a 21-year-old Senegalese-born viral media creator with more than 100 million followers. His rise to stardom was unexpected and unfunded. It was simply the result of natural talent and a dynamic tech platform to support his hilarious deadpan expressions.
While this creator is an outlier in terms of success, accessible video-creation platforms are empowering the next generation of creators and entrepreneurs, both big and small, to monetize their talents in ways we’ve never seen before. Gen-Z is leading these trends and changes.
Our Attention Is Decentralized
With the rise of decentralization across entertainment comes a larger swath of potential “advertisees”, or influencers. That means more people we get recommendations, advice, and tips from for everything from beauty and self-care to home improvement and gardening.
Creators expect brands to compensate them for their influence and it’s showing—influencer marketing has increased 8-fold since 2016, according to Statista.
This windfall of cash is not reserved for just the television or celebrity sensations of the world, but increasingly for micro-influencers and nano-influencers (less than 50K followers) who receive higher engagement and make up the highest percentage of influencers. Brands utilize micro-influencers 10 times more than mega influencers.
Curation Is Creation
Most people think of creativity as invention—Einstein, Disney, Jobs. But in an era where mixed-quality information is abundant, creativity is also curation. Mommy blogs have been at the forefront of helping other moms discern the best and safest products for their kids and families for decades.
We all have products we can’t live without. Products or experiences we love with a passion. Soon enough, we will get compensated for sharing those products within our communities and networks, instead of brands passively profiting off our influence.
At Groupshop, we’re excited to be on the forefront of this movement: E-Commerce for Everyone.
This is a content marketing post from Groupshop, a Forbes EQ participant. Forbes brand contributors’ opinions are their own.
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