E-commerce is much more than selling!

Akinola Odunlade Strategic Jumia Partner Manager, FMCG.

E-commerce is more than just selling! Here are 5 ways you can derive immense value on e-commerce apart from just selling.

1. Sampling

Let us say an FMCG company wants you to try out their new product, they will send you a “sample” that you can experience/use/eat and then get your feedback to improve the product. This is called sampling.

Product sampling gives the potential customers an opportunity to ‘test drive’ and review a product at no cost to them. (We all love freebies, don’t we?) This helps endorse the product, create a sort of awareness and interest, and allows the FMCG company to feel the pulse of the customer in response to their product.

E.g., You buy a usual product X but also get the new product Y so that you can try it out. Consumers who try the new product Y are more likely to buy it in the future. When they do not, the brand can then adjust or optimize based on the feedback from you, the customer.

However, we all know what eventually becomes of sampling offline, especially in Nigeria. Let me paint a scenario for you:

• The brand has released free amazing new products so that the end-customer can experience the products FOR FREE.
• The brand (of course) must rely on its distributors to ensure that the products go through the supply chain. i.e., From the Brand >> Distributor >> Wholesaler>> Retailer >> End Consumer.

…but in Nigeria (and even in other parts of the world), things tend to happen very differently from what was planned.

A tale of woes

If the distributor doesn’t choose to sell it separately, the wholesaler may decide to hoard it like palliatives (sounds familiar?), or the retailer might re-appropriate it for personal “urgent” use. The poor end customer does not even realize s/he was meant to receive an additional product; after all, they weren’t expecting it= Money spent, aim defeated!

Long story short, sampling is difficult and expensive offline and barely achieves its aim; this is in addition to the fact that it is mostly purely transactional rather than relational. Therefore, brands tend to sample physically, in-store with a salesperson asking you to taste a product and then document your review (which can also be doctored).

However, the story is different online. This is because the brand can reach customers directly through e-commerce and with a much shorter feedback cycle. How exciting!

Sampling online, therefore, provides a great opportunity to have millions of targeted end-users experience your product with the level of precision and exactitude that you may not find offline. For instance, let us say you are a manufacturer of baby products, you can simply target the demography of all female customers of sanitary pads within child-bearing age. Or let us say you manufacture biscuits, you can easily target customers who have bought a similar product in the past, etc.

Sampling provides the opportunity to have millions of targeted end-users experience your product with the level of precision and exactitude that you may not find offline.

That is not even the exciting part. The sweet part is that you can also receive direct feedback from those customers that you can immediately use as opposed to waiting for several days or months for your research agency. Good stuff!

2. Surveys

Oftentimes, there can be such a huge disconnect between brands and their customers that another brand has already won the market before they get the right feedback from customers. This is one of the key factors that recently led to a ~44% gain in market share for a new industry challenger within 2 years of market-entry, hence the apparent toppling of the known “market leader” who remained oblivious to this power shift until it was concluded.

E-commerce, provides the opportunity, on an ongoing basis, to solicit feedback from different categories of customers. This can be a huge source of valuable insights that you can use to optimize your business, increase value, and retain your market leadership.

3. Market intelligence

Suddenly, you can posit with precision and understand your business to a level physical boots can never uncover!

Who are your customers? Where exactly do they live? What types of products do they like to buy? What products do they buy together with your products? What is the proportion/spread of your customers? Are there particular products that folks in a particular area prefer?

These are all questions that can be answered through data/intelligence on e-commerce. Suddenly, you can posit with precision and understand your business to a level physical boots can never uncover!

4. Price perception and correction

Set your prices and let your stakeholders reorganize

Are your products being sold above the recommended retail price? E-commerce provides a great opportunity to set price perception to force offline compliance. A growing trend in the world these days is that customers go online to get a sense of the prices of products before deciding to buy (either online or offline).

All you need to do is set your desired price on your e-commerce platform and everything else falls into place! Amazing!

5. Advertisement and Marketing

Which set of people would you rather advertise to: customers going to the market already with money to spend OR those going to a party?

The number of eyeballs that come online on a daily basis is staggering (here’s hoping it stays that way after this almighty NIN saga!) There are very justifiable reasons to focus on advertising and marketing on e-commerce because:

• The online customers are at an advanced level of purchase on the sales funnel. Which set of people would you rather advertise to: those going to the market already with money to spend or those going to a party? Your guess is as good as mine. Advertising online means you are advertising to the right set of folks who are ready to make a purchase- something that cannot be said for offline ads.
• You can measure reach! Very clear to know how many people are being reached and who they are.
• You can convert your marketing spend to sales immediately since customers can choose to buy immediately on the same platform… and even if they do not buy immediately, you are already in their minds and can understand how to optimize.
• You can execute faster and make immediate changes if the campaign is not producing the desired results. (I must give it to the digital billboards that also allow you to do this offline, but this comes at 10 times the cost of what you will find online).

I hope this little piece has helped you appreciate that e-commerce can be much more than a sales channel and should form a key part of your digital strategy. Tell me, which one of these intrigued you the most and what are other areas you think e-commerce can help FMCGs thrive?