The benefits of a full-service social marketplace, and how it works.
The way we shop has never been so instantaneous, with approximately a third of Australians opting for an online shopping experience and almost 60 per cent indicating they would make the shift to online in the future. This may not come as a surprise, with $28.6 billion being spent on all types of online shopping in Australia.
While online shopping experiences and transactions have been taking place for many years, there are many benefits to getting involved in an existing full-service social marketplace when it comes to selling your product.
More power in numbers
For starters, there is more power in numbers, which means you are surrounding yourself with like-minded brands who are also attracting customers to the site, giving you a bigger chance to be noticed. Supermarkets are so successful because they have a large number of products in one place, and websites like Amazon are also taking advantage of the same concept. These companies would not be so successful if they only had 10 or 20 products on their site.
“Social marketplaces encourage conversation, sharing and interaction, which results in more sales.”
The marketplace itself will be taking care of the marketing and advertising to get people shopping and it means you don’t have to invest in a highly sophisticated site yourself, you just manage your own page and your own products.
The benefits of social
Social marketplaces have an advantage over regular marketplaces. They encourage conversation, sharing and interaction, which results in more sales. Therefore, the benefit of the online “farmers market” experience as opposed to the online “supermarket” experience is that shoppers get to connect with real people – the people who make the food and who are best positioned to extoll the benefits and advantages of the products they make. Social marketplaces offer the chance to connect rather than just buy and therefore aim to establish relationships with, in the case of Oomami.me, for example, food producers who might only be reached at farmers’ markets or their own websites (if they have one).
So, what is a full-service social marketplace exactly?
A “social marketplace” is an online marketplace that also has all the usual features one would find on any of the major social networks: you can like, follow, share, subscribe, comment etc. Think of it as Instagram meets Amazon. It also has the opportunity to generate more revenue for the sellers than a standard online store, as the added interaction and social features can cause a product to go viral and generate more sales. Social marketplaces are particularly useful for smaller producers because they allow consumers to get to know their brand and products without the need to spend big money on advertising. By integrating social into a marketplace, brands get to tell their story by posting updates as they would on any other social platform, but being able to do so within the marketplace also directly translates into sales. So while platforms like Instagram and Facebook allow users to link products to a post, the link leads to an external website where the purchase takes place. These added steps create barriers and result in a less convenient user experience.
The fulfilment aspect
Additionally, there are “full service” marketplaces as opposed to a standalone marketplace. An example of a full-service marketplace is Amazon, where they provide the marketplace and also the warehousing and fulfillment service. This is particularly
The B2B and B2C aspect
Social marketplaces, such as Oomami.me, that allow B2C as well as B2B or bulk trade, enable businesses and industry professionals such as cafes, restaurants and chefs to go direct to the source and connect directly with food producers and suppliers, bypassing the middleman. This results in huge savings, better service and quite often fresher products.
Essentially, any consumer or business can connect directly with a supplier and purchase online while simultaneously learning about the origin of the produce, the farmer and where they are based. In an era where we care more about eating paddock to plate, the concept of the full-service social marketplace is fitting the bill. It is also a good opportunity for the small producers to reach many more customers that they may not have reached had they been trying to get traffic to their own site.
Getting your product in front of a customer is one aspect; the other is getting the product to them. For example, if you’re a small ice cream manufacturer in Sydney and a shop in Perth wants to order two boxes, how do you get it to them? You can’t just put it in the post, but a social marketplace that has infrastructure in place makes it easier than ever for customers to have access to the small producers and their products, which they previously could never conveniently access.
The convenience aspect
This model can be tweaked to suit most industries, but in the case of Oomami.me it is food and the result is it is as easy to access products made by small producers as shopping at one of the big supermarket’s online stores.
This is the future of commerce and we’re already seeing the full effects, with companies like Amazon showing sales of $135 billion last financial year, according to Credit Suisse. According to IBISWorld, in most food sectors only a handful of large corporates generate over 50 per cent of industry revenue, with the thousands of smaller producers generating less than 50 per cent of industry revenue. If more consumers chose to adopt this way of shopping we could see an increase in the accessibility of products from smaller producers. The goal is to create enabling infrastructure that makes it as convenient to purchase from small producers as shopping at a big supermarket’s online store, and thus transfer half of all food and groceries revenue from the big corporates to small producers – which amounts to $50 billion in Australia alone.
Farmers and food suppliers want more control over the end-game of their products, and a social marketplace helps facilitate this need. At the end of the day, consumers want to know more about the origin of their food, and food suppliers want to receive the true cost of their labour of love. This is something that could work for many industries.
Alex Stefan, Founder, Oomami
This story first appeared in issue 26 of the Inside Small Business quarterly magazine.