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The Influencer ‘influence’

By Retail Technology | Friday March 31 2023

Using social media influencers has become a favoured marketing trend but it can be a double-edged sword for retailers says Sara Nix, Business Management Director at PFS

Influencer endorsement and collaborations have steadily gained momentum in recent years, with brands across the globe associating themselves with big names from music, sports, entertainment and social media in a bid to woo their customers. It has become especially commonplace in the social commerce retail space for brands to associate with the ‘micro-influencer’ which comes at a low-cost investment to the retailer and a high return by utilising their following to drive retail sales. 

Typically, the influencer ‘influence’ works well for a brand by capitalising on the popularity of an individual to appeal to a retailers’ target audience, as well as a wider customer base. In 1984, Nike made a move away from their previous running shoe-only reputation to partner with a then unknown Michael Jordan. Nike put their chips on the table to offer him a deal far more lucrative than the bigger sports apparel companies at the time. Michael Jordan had never worn a Nike shoe but took the deal, the Nike Air Jordan was born, and the rest is history. 

But what happens for a retailer and its order fulfilment service when a brand ambassador relationship turns sour? There can be some tough decisions to make when it comes to cleaning up the aftermath. Take the recent parting of ways between Adidas and Kanye West. Having dissolved their relationship with West in October 2022, Adidas has recently reported they anticipate an estimated revenue hit of £1bn after deciding not to sell the remaining stock produced in collaboration with Kanye. Although it seemed unlikely that Adidas could have anticipated the dissolution of the relationship coming to such a quick and bitter end, it’s important that brands have contingencies in place to avoid such a hefty loss of earnings should an influencer partnership garner less than desirable results. 

Choosing the right brand ambassador 

A brand ambassador represents a brand and promotes its products long-term, chosen based on alignment with brand values, and typically receives compensation. Influencers, on the other hand, can be less predictable.  While they are often motivated by compensation from a brand, they do not always feature a brand’s product as a result of an agreement with the brand and therefore may not always be as aligned with the brand’s values. 

Since a brand typically has more control when it comes to their ambassador relationships, It’s imperative that they choose ambassadors who align with the core values and mission of a brand. Your spokesperson must possess a genuine love for your brand, beyond the responsibilities of their role. They should have a deep connection with the products or services and use them on a regular basis in order to be a strong advocate.

A brand that has successfully engaged the right ambassador is OnRunning with Roger Federer, a renowned athlete and a widely recognised figure in the world of sports. The introduction of the Roger Advantage shoe in Summer 2022, which was designed in collaboration with Federer, saw a significant surge in sales for the brand. Other brands include Gymshark with its founder and CEO, Ben Francis, crediting this to its success and growth. In both cases, these individuals embody the brand's core values and connect with the target audience, making them highly effective brand ambassadors.

Overall, the key to working with brand ambassadors is to focus on building a strong relationship based on trust and mutual benefit. To the extent that they can, brands should also aim for this type of alignment with the influencers they select to promote their products. By approaching each type of partnership carefully, brands can maximise the impact of their marketing efforts and build lasting relationships with those who represent their brand.

Social Commerce 

Social commerce is a rapidly growing trend that involves the buying and selling of products through social media platforms. One of the most dominant forces in the social commerce space is the power of influencers, and brands can benefit immensely from incorporating influencer marketing strategies. By collaborating with influencers to promote their products on social media, brands can increase their brand awareness, attract more traffic to their website, and ultimately boost their retail sales and customer journeys.

The impact of influencers on social commerce and retail sales is formidable. We have observed many brands experience a surge in product purchases after partnering with an influencer, irrespective of the actual need for the product. Influencers can expand brand awareness, spur sales growth, and engage with customers and even with new customer audiences in novelways. Often, influencers conduct product demonstrations, highlight usage scenarios, and exhibit incorporation techniques to attract new consumers and meet existing and evolving needs. Consequently, they wield substantial influence in shaping opinions and purchasing decisions, and brands can harness this power by collaborating with them. Influencers can provide social validation and personalised recommendations, which can significantly sway a consumer's decision to buy a product.

Forecasting and stock checking

Brands need to be able to forecast as accurately as possible to ensure they are prepared for a surge in popularity with ample stock. To optimise stock management, brands should use historical data as a reference point to understand how similar events impacted demand. It's crucial to monitor closely from day one, especially for brand partnerships and product launches, to react to any unexpected increase in demand. Additionally, exploring pre-orders or backorders as an opportunity to better influence inventory planning could also be an option. Overall, using data and closely monitoring demand is important to forecast accurately and ensure brands are prepared with ample stock. 

Implementing an effective warehouse management systemcan also help brands be aware of where their stock is located and deliver to the customer in a timely fashion.

Dealing with surplus stock

To effectively manage surplus stock, there are a variety of strategies that can be employed. These include ensuring the right budget is in place to secure temporary storage outside of current warehouse space if needed to house surplus stock, altering pricing to enhance customer appeal, exploring new sales channels, repurposing the product, and as a last resort, utilising discount partners for liquidation. Additionally, contingency planning is crucial to ensure preparedness for unforeseen circumstances such as unexpectedly high or low demand. Maintaining close monitoring of inventory levels from the outset is also stressed as a means of swiftly responding to any fluctuations. 

It is important that systems are in place to deal with surplus stock. Multi-node fulfilment allows brands to optimise their inventory and offload stock quicker and more efficiently rather than directing them to specific stores. 

Influencer marketing can be a valuable tool for retailers to boost their brand awareness and increase their sales. However, choosing the right brand ambassador and having contingency plans in place are crucial to mitigate potential risks associated with influencer partnerships. Accurately forecasting demand and managing surplus stock are essential to ensuring efficient order fulfilment and customer satisfaction. With the right strategies and systems in place, influencer marketing can be a powerful and effective way for brands to connect with their target audience and drive their retail profits to greater success.


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