Article
Tapping the wisdom of crowds
Crowdsourcing gives retailers a way to learn customer needs, wants.
October 1, 2008
A relatively new concept, "crowdsourcing" refers to the act of literally sourcing product and marketing ideas from the crowd that will use them and be affected by them. And retailers are finding their own ways to mine the wisdom of their crowds — the people that will shop in their stores and purchase their products.
The term crowdsourcing was coined in a 2006 Wired magazine article written by Jeff Howe, who is largely credited with defining the phenomenon. He went on to write the book Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business (Crown Business, August 2008). In his book, Howe maintains that a community of people with similar interests — brought together via the Internet — can often invent, write, and run research and business initiatives more effectively and with less expense than can be done through more traditional means.
Though crowdsourcing serves as a business model, mostly around product creation or innovation, elements within crowdsourcing are extremely valuable to traditional marketers running traditional retail businesses, says Jeff Molander, president of business consulting company Molander and Associates of Evanston, Ill.
"Though they may never use the crowdsourcing business model, the secret sauce that makes crowdsourcing work is applicable to traditional retail models," Molander writes in a blog he maintains.
So far, crowdsourcing for the retail space has mostly been limited to creating or tweaking consumer products.
Threadless and Ryz are the two most frequently referenced companies to successfully put the crowdsourcing model to the test. Threadless, a T-shirt company, and Ryz, an athletic shoe manufacturer, give consumers the tools to design shirts and shoes online. Consumers then vote online for their favorites. In this way, the consumers essentially determine the products these companies will sell over the Internet, Howe writes.
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John Fluevog Shoes Ltd., a shoe designer in Vancouver, Canada, practices another form of crowdsourcing.
Visitors to the Fluevog online store are given an easy way to offer feedback on designs, offer advice, and suggest new designs, says Stephen Bailey, Fluevog marketing director. More than 2,000 users have contributed to the site. If many users offer the same tip, Fluevog marketers will take note. Many women may post to the site, for example, asking that a particular men's shoe style be made available in women's sizes.
For Fluevog, the online presence is just as vital as its bricks-and-mortar locations, thanks in no small part to the site's interactive elements.
"Our online presence sells as much as one of our retail locations," Bailey said
Brainstorming with the hive mind
Mark Jakiela, a Washington University mechanical engineering professor, is studying crowdsourcing as a way to allow engineers to work as independent contractors from home.
In fact, several online businesses dedicated to idea generation and development have sprung up over the last few years. For instance, Cambrian House of Calgary, Canada, relies on the concept of crowdsourcing to generate product ideas, Jakiela says. Under the Cambrian House business model, subscribers submit ideas via the Internet. The subscriber community then votes on the best ideas to pursue and then quickly sets to brainstorming and discussing how winning concepts can be best realized.
Tools like Cambrian House give retailers a glimpse into how crowdsourcing might best play a role in their operations.
One recent Cambrian House submission, for example, asked subscribers to come up with a technology that would allow individual retailers to program their own in-store music. The submission specifically asked for help brainstorming an online musical network that would feature six to 10 store musical channels. Though the songs and network could be modified by the parent company, the music would be selected at the store level.
"Musical tastes by retailers vary greatly by geography; visit a Dunkin Donuts in Jersey and you will likely hear different music than the same store in Knoxville," the subscriber wrote in the online request.
The subscriber realized the need for such a network after creating a small music network for a retail chain of 65 stores.
"Their first response was, why can't I set my own musical choices?" the subscriber wrote. "Also, I really like the idea of this software that would allow an administrator to update and change music selection and maybe even allow for stores to rank songs."
Should that request be actively brainstormed by Cambrian House subscribers, retailers may just have a new way to program in-store music. But if enough Cambrian House subscribers agree the request is valid, retailers will learn of a consumer longing for music tailored to a particular location or taste.
You can't please everyone
Still, retailers should exercise caution before jumping into crowdsourcing with both feet, says Robert Gordman, president of the Gordman Group, a business consulting company in Breckenridge, Colo.
Retailers can't please everyone, Gordman says. And it's not their job to try.
"I think crowdsourcing is a kind of a mass distraction," he said. "You're not doing business with a crowd in general. The problem with the theory is that all retailers can't appeal to all customers. If you just get a crowd's opinion of what you, as a retailer needs to do, you'll be running in a hundred directions."
It's easy enough today to use the Internet to ask a question of thousands of people, whether they are your customer or not. Ask a question such as, "How can we best serve you?" and expect a thousand replies to the tune of, "Lower your prices."
"You just can't take everyone's opinions into account," he says.
