A major paradigm shift has hit the distribution market. Traditionally, sales strategies were more of a challenge to attract and sell products to as many customers as possible, regardless of the type of goods. However, over the years, the climate of the market has gradually yet definitely changed towards caring less about the number of consumers, and more about how deeply invested they are in a certain product or person.
This sea of change in the marketing industry is known as Like Commerce, a new consumer trend that no longer requires a massive amount of people to sell an item but simply a strong, authentic fanbase.
Lee Soo-jin, a researcher in the Consumer Trend Center at the Seoul National University with a doctorate in consumer science, was one of the frontline researchers of this phenomenon.
“You might expect an influencer with a relatively high number of followers to show better sales results,” she said. “But beyond the written number, it could contain a significant amount of people who are just somewhat interested, ghost followers and even anti-fans, leaving little room for hardcore fans. On the other hand, influencers who have much fewer followers but specializes in a certain area, will attract hardcore fans that share the same interest, eventually surpassing the more popular influencer in sales results.”
Like Commerce can be seen via three different business models: C2C (Consumer to Consumer), D2C (Direct to Consumer) and H2H (Human to Human).
A familiar example of C2C can be seen on Instagram, where many influencers promote group purchasing events, also known as gongu in Korean, to their followers.
In the survey Ewha Voice conducted on 77 Ewha students regarding Instagram gongu posts, a staggering 87 percent of the students responded that they have encountered a gongu post at least once, and 75 percent of those have gone a step further and purchased an item. When asked the reason behind their purchase, the majority of the answers were related to the credibility of the influencer and the relatively low price of the product.
The responses show that the key to Like Commerce is how well the content meets the interests of a consumer and builds a connection that leads to high reliability. Once this is well established, sellers will see an overwhelming success. However, it can also be the main reason why Like Commerce can be a risky form of marketing on both sides.
“I think it is too great a risk to purchase an item mostly out of blind trust or a positive feeling, at the very least, towards the influencer,” an anonymous respondent said. “You never know if he or she is using their followers and promoting the gongu for their own good.”
“I feel like the influencers are exaggerating, so it is hard not to doubt the quality of the item,” another anonymous respondent replied. “Also, the refund policy and inquiry process do not seem convenient compared to official sites.”
Like Commerce has its strengths and weaknesses, and as new as it is, it definitely needs additional policies to prevent and manage consumer risk. However, despite its flaws, Lee sees this trend going on for a while, especially because of the current market becoming more consumer-centered.
“In the past, approaching customers directly and meeting individual consumers’ preferences was considered a marketing tactic that would win over more buyers,” she said. “Nowadays, it has become a natural step and has even started to be considered a given.”
This business model, where companies reduce the distribution stage and sell directly to their customers, is known as D2C, another form of Like Commerce. Last year, Hyundai released an SUV, Casper, using and benefitting from the D2C method. For direct communication with its customers, Casper was only available online, sparing excess cost spent in distributing and thus making the price of the vehicle more affordable. Moreover, it offered customizing options such as selecting the color of the car or whether or not to add other features, allowing consumers to make their own decisions on the design to match their taste.
It is evident that the whole market is gradually shifting its focus to customer- unique products, and as long as this momentum continues, Like Commerce will continue to expand its influence as well.