Finding a way for customers to enjoy shopping at online or physical locations and getting them to refer their friends are among the biggest challenges that retailers face. Online marketplace NeWants.com has found a way to make shopping fun for its lifestyle products and gadgets while implementing an affiliate program to encourage shoppers to make referrals.
The fun part comes from the game approach NeWants offers online shoppers. Customers can play slot machine-like games to win discounts of 5 to 90 percent off purchases. Gadgets currently sold by NeWants include LED lamps, cell phone chargers, humidifiers, moon lamps, computer cables and other items that typically sell for between $20 and $60.
“We wanted to start with gadgets because you don’t have a lot of the issues related to clothing and other products such as dealing with sizes and returns,” says CEO Alessandro Armillotta.
Customers who visit the NeWants website are shown not just products but an offer to participate in a flash sale. When they connect to the sale, they can take a spin on a wheel to find out how much of a discount they can get. If they refer a friend or purchase a product, they can get a second or third shot at getting an even better discount. Players receive the biggest discount scored out of up to three attempts.
Typically, one to three different products are offered as a flash sale per day; customers like the game approach to shopping. “We launched this in November and ran out of products within 20 days,” Armillotta says. From November 1 until early December, NeWants saw 25,000 new customers registered and sold about 60,000 products in about 40 days.
“This was huge for us,” Armillotta says. “We did not expect it.”
The second key approach for establishing customer loyalty is the program allowing customers to register as an affiliate and then refer others. When those referral customers make purchases, affiliates can collect up to 35 percent commissions.
Customers get a 12 percent commission on their first referral; they must be registered as an affiliate and purchases must be made through their link. As they refer more friends or their friends refer friends, the size of the commission increases. While Armillotta says similar affiliate programs are becoming more common, most have a limited time in which referrals must be made — often 30 days. The NeWants affiliate program is good for a lifetime.
Armillotta says the concept is working well in Asia; the company wants to bring the idea to the United States. “The real goal is to convince people that they can earn extra money by being an affiliate,” he says.
The affiliate concept offers a solution to the challenge of financing high-priced marketing campaigns. “The marketing cost of an online site is huge,” he says. “We are trying to get around the cost of spending thousands of dollars on Google, etc., by using word of mouth to promote our site.”
Gadgets currently sold by NeWants include LED lamps, cell phone chargers, humidifiers, moon lamps, computer cables and other items that typically sell for between $20 and $60.
Customer participation in new product crowdfunding is in the future for NeWants. Although this feature has not been opened to the public yet, when it is available customers will be able to find out about future products and invest in their success by purchasing shares in the products before they are sold online.
“Let’s say we want to manufacture a new product that will sell for about $50 a piece and we ask for $20,000 in funding,” Armillotta says. “Customers will be able to buy shares in the product and while the product may not exist yet, they’ll get the item at a cheaper price when it comes out and they will have something truly unique. We might ask our customers for $20,000 so we can manufacture 20,000 units. Investors get a token that shows they invested in the product.”
If NeWants does not get enough funding for the product within six months to a year, customers get their money back, Armillotta says. Investments in the products would have a minimum of $200 and NeWants expects to raise between $20,000 to $30,000 per product.
‘THE FUTURE OF ECOMMERCE’
NeWants originally began by only selling its own privately manufactured goods on its website. An agreement with Bluefly, a sister company owned by the same investment group, will allow Bluefly to sell its discount designer fashion products on the NeWants site using the NeWants technology. It will begin by offering Prada bags, though the product line is expected to grow.
“We want to offer a plethora of different luxury products to appeal to everyone,” says Yann Tanini, president of Bluefly. “We see huge potential in raising sales by offering these items on NeWants.
Armillotta says Bluefly will bring the technology to a different demographic group. Bluefly’s fashion customers are 70 percent female compared with NeWants’ typically male customer base.
“We believe this innovative checkout process will attract consumers from all backgrounds,” Tanini says. “It appeals to both the luxury spender and the budget-savvy shopper.”
He says Bluefly was interested in NeWants’ affiliate approach.
“We share the same vision of ecommerce,” Tanini says. “Both companies have invested in a team of young visionaries looking to create a revolutionary gamified affiliate platform. We believe the affiliate network will be the future of ecommerce.”
“NeWants’ affiliates have exponentially grown by the viral effect of the flash sale’s page, a tactic that Bluefly has taken note of and fully supports,” he says.
Ultimately, Bluefly wants to increase sales, reduce abandon carts and “generate a viral effect where users share our site with friends in order to obtain further discounts,” Tanini says.
At some point in the future, NeWants hopes to open its technology to other retailers so partners can use the gamification and affiliate programs in their online sales sites as well.
“We want to prove our concept by exporting the technology and approach to other companies,” Armillotta says.
Lauri Giesen is a Libertyville, Ill.-based business writer with extensive experience in covering payment and finance issues.