Month: September 2020

Undercover Seller. A brief experiment on reselling

Even before COVID, the need for some extra income and the flexibility to work from home was a growing trend. With 44 Million people filing for unemployment, side hustle is no longer a Millennial game. One of the high-growth areas that we are paying attention to for a multitude of reasons is that of second hand or reseller space. The second hand market is forecasted to hit 64 billion dollars in the next 5 years, forcing the donation and thrifting models to rethink the customer experience.

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In order to better relate to the market and behaviors emerging real-time, we took on the life of a modern reseller. Our hypothesis for this effort at the onset was that by becoming a reseller we’d better understand where the sticking points are and what it will take to grow and scale side hustle into a full fledged business, something that more and more people could do these days. We deployed an online persona to better understand the landscape, the gaps, what works, what doesn’t and what information is available to resellers today. We immediately observed that there is not one selling platform on the market that is taking advantage of the opportunity that lies within successful customer management, simplicity of usage, or reasonable selling fees; ultimately, no platform has it all. People are leveraging the technology that’s being provided to them in order to create efficiencies and own their own destiny. Because the reseller mindset is transactional, there’s no loyalty to any one platform. If the reselling ecosystem is sounding fragmented and labor-rich, you are on the right path. It takes an expert product marketer to know how, where and when to promote a unique one of a kind item. Through this process we have earned deep respect for today’s modern tech-enabled reseller and we can all learn from these self-made product entrepreneurs.

For 7 weeks we immersed ourselves into the reseller lifestyle. Once our online persona was created, we began experiencing spammers, packages getting lost in the mail, last minute canceled orders, shipping delays, huge profit margins, quick sells, slow sells, and much more. While the shipments of items piled up and the car filled with boxes, we got a serious taste into the world of reselling. We found flaws in every platform out there; what they could be doing better, or what they should stop doing, no platform is flawless. Each week we got together to go over which items have sold, new findings, and how much effort was put into the project that week.

We made accounts on 8 different reselling platforms but Offerup, eBay, Mercari, and Poshmark were the most successful.

Here a few of the pros and cons we noted:

  • OfferUp is simplistic, and makes customer interaction and selling easy
  • eBay is a complicated site, but getting eyes on the item is their forte.
  • Poshmark is an extremely saturated, social selling app.
  • Mercari is well, quiet.

No platform offered customer relationship management nor did we find a reseller specific tool that could foster and track relationships and encourage returning customers. In order for us to keep track of the items, which category they fell into (fashion, technology, home goods), when they sold, and to whom, we created a tracking sheet. By doing so we broke down the steps consumers have to undergo, and created ways to measure and track hypotheses. By putting ourselves in those shoes we began to understand the nuances and details that are not shared on the platforms.

There were 3 perspectives we took data from to understand the consumer behaviors: financial, selling life cycle, and customer relationship management. When purchasing an item to resell, the reseller needs to make sure they’re buying the item for less than what it normally sells retail, then determine what to sell it for, subtract platform fees and shipping costs, and even then, it needs to be more than what it was purchased for in the beginning. Jessica, the buddy who spearheaded the persona said, “I did my best to predict potential revenue on each item, but over time negotiations came into play, some of the revenue dropped a bit, but that’s a given and you need to be prepared for it.” Consumers will always want to pay less than what it’s selling it for, so it’s important to have it set a price with wiggle room.

To better understand if the juice was worth the squeeze, we made sure to study how we were using our time. How long does it take to receive a shipment, how many days past from listed to sold, and how many interactions take place in between in order to make a sale. When we ran into longer delays of selling, we began to really focus on ways to bring that down. Getting the items to sell is difficult, even if it’s name brand and in great condition.

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More than 60% of our time was spend getting customers to see it, (i.e. Marketing of a unique item) relisting, promoting, and offering price drops are a few of the time consuming tactics that were used to get a product sold. Simply listing and walking away is not enough. Being quick to reply to customer questions is key.

This experience has given us many exceptional insights into the reselling world.

  • Financially, it has amazing potential, but it does take some time to realize what to do and how to do it efficiently.
  • The selling lifestyle took longer than anticipated with receiving items, and then there’s the time between listing and selling to take into account as well.
  • Consumer relationships are a big factor to selling the goods and receiving a good rating.
  • Timely responses, follow up, and their experience is important but quality products matter too

Each platform has something to offer that’s different from the other, but to make an honest living out of this, a system in place for customer management would be an effective way to excel sales on these online services. It’s the creation of this modern way of finding incremental revenue that has us really optimistic. This community is thriving and is getting more popular thanks to the self-made marketing resellers. It can be a real source of income if invested in. Each platform has it’s pros and cons, not one is ultimately superior. Under the right conditions and understanding it can be very successful and these platforms that enable the side hustle has us excited.

I’d like to give a shout-out to Jessica who led this initiative.

“It was a different experience and opened my eyes to the effort and research that goes into being a successful reseller. The only way to truly learn how to participate in this industry was to jump in, because no matter how much you Google ‘how to be a reseller’ you will always come up short,” — Jess

6 weeks ago we didn’t know what we were going to learn, but this experience has enabled us to find relatable elements and better understand the community within it.

Customers make strategies, not executives

Millennials are the most diverse generational cohort in US history,” according to a Deloitte report. Consumer diversity is an inescapable reality for most companies. Brands that recognize this the most make all efforts to understand the heterogeneity of their audience and tailor their strategy to the needs of their customer base.

In this time of diversity, inclusiveness is an important factor in growth and also serves as a risk mitigation strategy for companies. To successfully leverage consumer diversity for success, companies must seek to understand their audience base and put the customers before their strategy.

Benefits of Diversity

  • Growth: Millennials are the generation that values inclusion the most and is influenced by a brand’s display of diversity and inclusion. And Gen Z on a fast track to more variety than the generation immediately preceding them. The rising generation consists of conscientious buyers who are ready to amplify brands that create a positive experience for diverse customers while avoiding and dissuading others from organizations with a negative reputation of diversity.
  • Inclusiveness: These days, you don’t need to be a global brand to have a diverse customer base. Everyone is different in some way, and acknowledging those differences is good for business. If you keep targeting a narrow set of people, you would lose the goodwill of the minorities. A diversity marketing strategy signals to your customers that you care about them, no matter how different they may be from the other customers.
  • Risk Mitigation: From a purely business perspective, diversity can be a risk mitigation tactic. Having a diverse consumer base shields your company from the consequences of the economic challenges of one customer segment. While it is great to maintain a focus when targeting prospects, hyper-concentration might have you using less of your potentials.

Managing Diversity

Because of the apparent diversity in today’s market, a multipurpose strategy can no longer work for reaching your growing customers. Instead of a one-size-fits-all approach, you need a marketing model that acknowledges diversity without differentiating your audience, and that personalizes customer experience while communicating inclusiveness.

  • Customer Segmentation

The purpose of segmentation must be to understand your customers better rather than to amplify stereotypes. In fact, what you deem important to learn about your customer base would inform the segmentation method you adopt. This may be geographic (location-based), demographic (features-based), behavioral (habit-based), or psychographic (personality-based).

In an impressive example of psychographic segmentation, the marketing team at GoFare, a travel app, ran a campaign that targeted people in each category with an upgrade offer, determined based on their lifestyle information. But this was not until they had identified their most frequent travelers, segmented them according to their attitudes, and created multiple buyer personas to clarify their targets.

By finding common attributes between groups in your customer base, you can serve hyper-targeted ads with direct messaging that would attract more leads.

  • Uniformity vs Differentiation

PepsiCo’s Lady Doritos gaffe is still fresh in the memory of marketers, serving as a reminder to never confuse diversity marketing with necessary differentiation. CEO Indra Nooyi sparked controversy when she hinted at the introduction of new versions of its chips that matched female snacking preferences, which she described as different from men’s.

But what was the problem? Was it that there were no gendered products at all? Of course, there are. But according to business lecturer Jill Avery, “consumers are generally open to gendered products and brands when they can perceive real, meaningful differences in how men and women consume a product.” Therefore, the real problem was that PepsiCo assumed stereotypes about its audience base. A major key to maneuvering diversity is to let the data speak for itself and involve the customers in your marketing strategy. Collecting information directly from the consumers ensures authenticity. Regular engagement with your customers makes them know that they have a voice. But engagement isn’t just saying and doing what your customers want; it includes communicating with them how they want.

  • Omnichannel marketing

Companies have many digital channels to interact with consumers. On the other hand, consumers, particularly millennials, want companies to focus on seamless cross-channel service delivery, rather than needless expansion. This is the age of omnichannel marketing, a strategy that ensures an integrated customer experience across multiple means. The average internet user has 8.5 social media accounts. And with the majority of people now owning numerous devices, cross-device shopping is much more common, impacting sales by up to 31%. It only makes sense that companies target consumers via multiple channels, and while at it, maintain a uniform CX.

The omnichannel model is an upgrade to multichannel marketing, which only extends the mediums of communication but without focusing on delivering cross-channel consistency. While multichannel marketing puts the medium first, omnichannel marketing puts the consumer first. Hence, greater customer retention; marketers using three or more channels to interact with customers record 90% higher retention rates.

The most common examples of successful omnichannel strategies are Disney, with its My Disney Experience, Virgin Atlantic’s personalized customer experience, the Bank of America’s dynamic experience, and Starbucks rewards app, among many others.

  • Brand Communications

“One in three customers from diverse backgrounds say their needs were often unmet over the past 12 months. Further, they were three times more likely to avoid an organization and dissuade others from their potential interactions, because of an organization’s negative reputation on diversity.” So says a Deloitte report, which underscores the fact that, more than ever, a company’s reputation depends on how they embrace their diverse customers.

The most foundational marketing strategy today is customer-centricity. When a company that serves a different customer base alienates a group of its audience, it affirms that it does not put customers first. Elevating minority voices, in particular, shows that a company holds every customer in esteem. And according to a survey by Google, 64% of consumers took action after seeing an ad it considered diverse or inclusive. The report concludes, “if you seek to enter diverse markets, your organization must become the market you seek.”

The beauty company, Dove has won hearts by embracing the diversity of its customers in an industry infamous for reinforcing stereotypes. Through its multiple campaigns, Dove exemplifies an understanding of the varied psychological needs of their market. A worthy throwback is the Ad makeover campaign in which they let their customers choose their ads messaging themselves, challenging the negative ads messaging that the industry had promoted over the years.

Conclusion

On the one hand, there is the idea that businesses should differentiate themselves by focusing on specific market segments. And then there are buyer personas which are templates for marketing targets. On the other hand, there is diversity to deal with. Unless you are planning an expansion, diversity marketing does not necessarily mean expanding your target. Rather, it is recognizing the differences in your existing customer base and leveraging that to connect with your customers better.

Multiple studies have established a strong link between consumer diversity and brand performance. Today, the talk is not about whether you have a diverse customer base or not. The major question is on how you tackle diversity in your customer base.

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