By Ashley Galina Dudarenok China was one of the first countries to contain the COVID-19 epidemic with relative success, and the economy is better for it. The National Statistics Bureau reported 4.9% growth in China’s Q3 GDP year-on-year, showing improvement against both its 3.2% growth in Q2, and [...]
How ‘pretail’ is revolutionizing the face of ecommerce
In light of the accelerated growth of ecommerce activities, an increasing number of businesses are opting to engage in ‘pretail’ to promote their products. ‘Pretail’ is when companies attempt to familiarize potential consumers with a product before its official launch.
Keeping in mind the stiff competition they face from rival companies, producers prioritize capturing the attention and interest of consumers significantly ahead of the product’s commercial launch date. By pitching an idea or concept to consumers in the hope that they buy into it, companies hope to increase demand for the product upon launch.
There are several ‘pretail’ strategies that companies use. Pre-order retail, where consumers purchase the product before it is launched or available, is one of them. Companies conduct pre-order campaigns, which assist them in achieving markedly higher sales as opposed to solely conducting sales post-launch.
In 2014, the pre-order campaign of ‘Plastc’, a smart card that allows the user to combine 20 cards into one, sold over US$5.2 million in its first week. A tried and tested strategy to increase pre-orders is to use discount codes or coupon deals to incentivize customers to place pre-orders.
Using social media and email campaigns to secure traction for a product is another common strategy employed by companies engaging in pretail. Marketing the product via emails is usually an effective strategy because there is already a connection between the company and recipients, since they would have signed up to the mailing list. This makes them more likely to be early adopted. Social media, amplified by hashtags and relevant messaging, can work to expand the company’s reach.
Companies may also use paid advertisements across social media platforms to spread the word to a larger audience. Virtual events like Facebook or Instagram Live videos pique the interest of consumers and provide a platform to expound on the features of the product in detail.
Today, social media influencers play a significant role in garnering the interest of potential buyers. According to the Digital Marketing Institute, 49% of consumers depend on influencer recommendations, which makes partnering up with one a good tactic for companies to engage in pre-launch marketing.
Some kinds of startups, particularly those in consumer goods, may also rely on crowdfunding campaigns to set the wheels of production into motion. The most popular platforms to pitch product ideas and harness monetary support are Kickstarter, Indiegogo and GoFundMe — in fact, a number of companies worth billions of dollars today started off on these platforms.
Oculus, the virtual reality headset, started off on Kickstarter with a fundraising goal of US$250,000. The campaign eventually raised US$2.4 million, and the company was purchased by Facebook in 2014. Crowdfunding campaigns also help establish product or brand loyalty, which can be extremely beneficial to a company in the long haul.
‘Pretail’ offers companies numerous advantages, making it immensely common in the business ecosystem today. By building a market for the product even before it acquires a tangible form, the company is reducing the possibility of the product tanking or the company going underwater. Crowdfunding campaigns lower the cost of launching a new product for the company — in some lucky cases, to a larger extent than accounted for.
As pre-order retail activities increase the chance of the demand for and supply of the product intersecting, there is a reduced need for long-term warehousing, further cutting costs for the company. Furthermore, the necessity for ‘middlemen’ or additional retailers is eliminated, which is monetarily beneficial to the company as well.
Companies are often apprehensive before launching unconventional products — ‘pretail’ allows companies to test the waters, reducing their risk. By gauging the interest of consumers using social media interactions and crowdfunding, companies can decide whether to go ahead with the product launch or not.
As companies gradually shift to ecommerce, the popularity of ‘pretail’ is a steadily increasing graph. The marketing strategies that companies use will evolve with the times, making it a space with great potential for innovation and creativity.