Over the past few years, the Web has had an incredible impact on shopping trends. More people are buying online, but consumers are also using social media and blogging about the products they like and the customer experiences they have.
Good customer service has always been important to companies, but the Web has thrust it into the spotlight, transforming it into a crucial element of any smart, digital marketing strategy.
Toronto-based social shopping site Loose Button is a prime example of a company that understands the Web's influence on purchasing decisions.
Since its launch in early 2010, the Loose Button team has popularized a technology platform that allows consumers to share and vote for beauty and health products on Facebook. In return for engaging their friends and spreading the word, they receive incentives. The concept is smart: consumers benefit from gifts and great discounts on high-end items, and the brands benefit from genuine public consumer chatter and praise for their products.
Shoppers are more meaningfully influenced by product recommendations from friends than they are by traditional advertising, says Ray Cao, CEO and co-founder of Loose Button. He says his goal is to create an online shopping experience that can't be found anywhere else.
"When do you ever go to a store and you're completely by yourself, and no one is there to help you?" says Mr. Cao. "In-person shopping is a very natural experience, but right now online shopping is not so natural."
Mr. Cao says he sees this service gap in online shopping as an opportunity.
"If you're in the e-commerce retail space, I think you really need to think about how you can build an exchange that people can remember," he says. "Many are too caught up with online shopping as just a transaction."
"It is the experiences we have that we remember for a long time," he says. "It is the transactions that we forget."
Loose Button puts a significant amount of resources into engaging with its customers online – the company's community manager posts comments, asks questions and responds to feedback from the audience. This process is integral to growing credibility for the brand.
"If a product hasn't been shipped and someone writes a nasty message on Facebook, you better respond to it – or it shows the rest of the word that you just don't care," says Mr. Cao. "The majority of our communication with customers is done through social media. We see it as the next generation of customer support."
As a result of its online engagement practices, Loose Button is quickly becoming well-known for its unique offering. Since launch, Mr. Cao says the site has seen a 350 to 400 per cent increase in traffic each month, and the team is also actively generating valuable buzz from beauty bloggers and consumers alike. The challenge, he says, is converting the good traffic into product sales.
"The industry average for an e-commerce business is to have a three per cent conversion rate," says Cao. "This means that for every 100 people that land on your website, only three people will end up purchasing something. If you do the math, you need a lot of people to land on your page in order for you to achieve the sales that you are looking for."
In keeping with his goal to create a brand that evolves the online shopping experience, Mr. Cao has big plans for the future.
"[Consumers]try out products at department stores, but rarely can they get that type of an experience online," he says.
So in the coming months Loose Button will publicly launch its subscription program, where members pay a fee to receive trial beauty products each month in the mail. This allows consumers to try products before they decide whether to return to the site and purchase the full-sized item.
With these unique online and offline customer engagement strategies, Mr. Cao hopes to one day expand Loose Button beyond health and beauty products.
"We feel that the shopping experience online still has significant gaps compared to the offline world, and we're working hard to fill that void," he says.
Special to The Globe and Mail
Mia Pearson is president of the Canadian region for Fleishman-Hillard Canada and its sister company, High Road Communications. She has more than two decades of experience in creating and growing award-winning communications agencies. Her experience spans many sectors, including financial, technology, consumer and lifestyle. She works in partnership with her clients to build brands, mitigate risk and shape communications strategies.