When rebrands go wrong

(And how to avoid the pitfalls)

UK's top e-tailers to offer cash for shares

The UK’s biggest online retailers - including Amazon, Argos and Tesco - are set to reward their advocates with cash for sharing product recommendations with their friends in a move that could see them shifting away from other affiliate schemes.

Shopa website

More than 5,600 ecommerce companies, including 47 of the IMRG top 50 biggest online retailers in the UK, are set to introduce the white label “Shopa” scheme to their websites in the coming months.

Shopa allows consumers to be paid for making product suggestions via a personalised weblink if people then go on to buy that product - who will also receive a cut of the discount. Retailers can choose the level of incentive, which is typically 8 to 10 per cent of the product price, and consumers can withdraw their funds from their Shopa accounts at any time - unlike some other cashback schemes which require a pre-set amount to have been raised before withdrawal.

(See more details in box below)

Earlier this month Shopa - whose revenue model is based around taking a cut from sales generated - received seven-figure seed funding from venture capital firms Octopus and Notion Capital. The company is also backed by angel investors and advisers including former Facebook EMEA managing director and now head of the Tech City Investment Organisation Joanna Shields.

Oasis has been trialling the service for the past 18 months and head of customer experience and commerce Briony Garbett says it is a “game charger” for building relationships with customers and rewarding them for direct sales they generate.

Furniture retailer Feather & Black has also been trialling the service. Founder Adam Black says it was an “ideal” choice because it meant the company did not need to build its own referral system from scratch.

He adds: ”I’m firmly of the view that being able to financially reward customers for helping to make sales is the future of retail because, as every retailer knows, nothing beats word-of-mouth recommendation, but we just need to find a way to incentivise people to do it. That’s why Shopa made a lot of sense to me and I think it’s got big potential to help our business.”

Stuart Evans, UK general manager of loyalty marketing agency ICLP, says Shopa is like a “very modern day” e-commerce implementation of the member get member schemes that have been run in loyalty programmes and previously tracked online for years, but errs caution for brands offering cash as an incentive to share.

He adds: “There is a danger of [a consumer] simply trying to monetise that opportunity - Simon Seeks is a great case study in this [a website which offered travel enthusiasts who wrote reviews of resorts a split of the commission of direct bookings to that location. It was noted the the majority of writers wrote positive reviews in the hope of taking a cut of sales. In 2011 the company concluded the business model was “simply not viable”.].

“The danger is denting the trust of the referral and also - for a brand - exposing how much you’re willing to discount, which could mean [online retail] becomes a tactical, price-driven, competitive environment that drives down everyone’s margins.”

He suggests placing Shopa technology within existing loyalty programmes and affiliate sites with miles or points earned for each referral may be a more competitive way for retailers to reward recommendations.

Shopa at a glance

Consumers will be encouraged to make recommendations via a Shopa widget button, which will appear next to other social buttons, on retailers’ product pages and at various levels of the purchase journey on their websites and in marketing communications.

Brands can customise the text the button will display, which could include the monetary amount consumers are set to earn were they to share the product with friends. Publishers can also include Shopa URLs in their online and offline marketing campaigns to receive a percentage cut of sales made.

The Shopa service also offers marketing directors analytics about their top advocates, what customers are recommending and buying and how consumers interact with the brand, which can help to inform future marketing activity.

Shopa claims it is the only service to own the patents in the US and Europe for the ability to convert a consumer’s email address into an ID that can be recognised and tracked within an affiliate network.

Readers' comments (6)

  • Fascinating innovation - and very powerful - commercialising word of mouth once and for all

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  • So If I walk into Argos and tell them my friend told me to go there, will they give me 10% discount?

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  • I agree with Stuart's point about denting the trust of the referral, but the challenges at Simonseeks.com were nothing to do with people writing positive reviews

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  • Shopa is an ambitious scheme and no doubt will thoroughly shake up the discipline of affiliate marketing. It’s rare that we encounter a new proposition enter the market with such klout – not so much a merchant coalition but it’s the vast majority of the retail industry that’s on board.

    However, as intriguing a prospect as it seems, when distilled down into ‘cash-for-shares’ it raises a red flag (or two). The notion of the ‘savvy-shopper’ is playfully banded around, but the web is littered with forums dedicated to unearthing and exploiting poorly thought out promotional schemes and free-offers. The consumer can be pretty unforgiving and the case study of Simon Seeks is not in isolation.

    Ultimately, brands have to ask themselves how does this bring them closer to the consumer? How much value are you creating at the touchpoints between the brand and individual? Referrals and word of mouth remain one of the most powerful ‘selling’ tools at a marketer’s disposal and there’s a fine line between empowerment and a dilution of the relationship.

    To call it a game-changer, particularly in light of advances in retail such as RFID, 3D print, NFC and the next evolution in loyalty systems may be slightly aggrandising. Affiliate marketing has its place, but I’ll be keen to see just how both retailers and consumers take to Shopa.

    Julie Atherton, Planning Director, Indicia

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  • Shopa is undoubtedly an interesting concept but how it impacts affiliate marketing above other channels remains unclear to me.

    As I understand it, I buy something and am encouraged to market to my friends (via social and email presumably) that we both receive a bounty if i purchase something from that retailer.

    There is no suggestion that this will cross over specifically with sales driven by cashback sites or any other type of affiliate activity. For this to be the case, the receivers of referral marketing via Shopa would need to be overwhelmingly cashback members already, which seems unlikely.

    Even if this were the case, my feeling is that existing cashback sites with their 100% cashback models would be able to offer a higher bounty than available thorugh Shopa.

    Member get member schemes have been around for many many years and a cleverly executed, online optimised and performance based system such as Shopa is a welcome addition to the marketing mix available to brands. However I find the assertion that this could see consumers moving away from existing affiliate models to be ill thought out.

    Matt Bailey
    Head of Product, Performance Horizon

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  • I believe that this is a solution that anyone who sells online should seriously look at. Leveraging customers social networks and rewarding them for the work they do for the brand is the future of affiliate marketing

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