Merchant Advance Blog

Blog Article: Discovery Commerce Opens the Box To New Business


One of the most-asked questions for the small business owner, especially in the e-commerce age, is “how can I compete with the vastness of selection and competitive pricing offered by super-scale online retailers such as Amazon?”

For many businesses, the answer has come in the form of a strategic shift – one that moves away from “deal and discount” marketing, and towards “discovery commerce.”

 

discovery_commerce

You may have already seen discovery commerce in action – it’s commonly known by product names like “loot crate” or “subscription box.” In this model, a retailer offers a box of curated products on a recurring timed subscription. On the surface, this appears to be a “gimmick” in which the surprise of receiving an unknown or new item is the main appeal for the customer. However, there are deeper and more important reasons for retailers to make the most of this model. Though e-commerce enabled small businesses are plentiful, they are often shut out of the market due to the ease of comparison shopping: discovery marketing circumvents this issue by prioritizing the creation of customer loyalty while upending the traditional “free sample” strategy often used to entice consumers. The cost of the box is less than the combined value of the goods within, but the real value for the business is in the attraction of a recurring, mid-to-long-term customer with a predictable impact on their sales and a high likelihood of becoming a brand advocate on social media.

Discovery commerce often appeals to consumers in situations where making their own selections requires sorting through and evaluating a large or complex suite of products such as those that can be idly browsed online in massive databases. Consider the market for wine as an example: there are so many different varietals and types that an uneducated customer might be intimidated or find it difficult to make a purchasing decision. The retailer uses their expertise to make the selection easier on the customer’s behalf by curating effectively. Chances are, once the customer finds something they like after trying a few of the curated selections, they will return with a specific purchasing goal in mind.

The challenges with the “boxed delivery” method of outreach involve maintaining creativity on the business side and staying closely in touch with the desires and on-trend needs of the customer base, as well as the shipping and supply complexities associated with making sure each delivery goes out on time. Once these challenges are addressed, subscription commerce or discovery commerce can be a powerful way for a small business to stand out among the crowd.

Vancouver Office | (604) 757-4602

1500 West Georgia Street, 20th Floor Vancouver, BC, V6G 2Z6 Canada

Toronto Office | (877) 370-8850

10350 Yonge St, Suite 101 Richmond Hill, ON, L4C 5K9 Canada

© 2017 Merchant Advance Capital Ltd. All Rights Reserved. Privacy Policy