My wife, who has a genuine love of cooking and baking, is not very active on social media but regularly logs into Instagram to follow Tieghan Gerard, a popular food blogger. Not only does she cook many of Ms. Gerard’s recipes on a regular basis – and I am only happy to be on the receiving end of such creations – but when Ms. Gerard’s blog, named Half Baked Harvest, released limited edition merchandise last year in collaboration with Etsy, she was excited and eager to snap up a number of items which she counts as some of her all-time favorite purchases. In the past she had also bought a few other things from various retailers upon Ms. Gerard’s recommendation and been pleased with them as well.
Matt Moreman, whose YouTube channel called Obsessed Garage I discovered a few years ago purely by chance, is a former financial advisor who has elevated his OCD-driven, extraordinarily painstaking, methodical car-detailing hobby into a full-fledged e-commerce operation, selling all sorts of items ranging from microfiber towels costing a few bucks to commercial-grade pressure washers paired with custom wands priced at thousands of dollars, all of which he has spent countless hours researching, vetting, and tinkering to meet his unrealistically high standards. When you watch his YouTube videos, you cannot help but feel confident that if a product is good enough to satisfy Mr. Moreman’s standards, it surely must be good enough for you. I am someone who does not enjoy washing cars and have absolutely no interest in detailing my own car, yet I ended up purchasing a few items from the Obsessed Garage web store (some of which I’ve used a few times, while others remain in their original packaging.)
Byrne Hobart, a former hedge fund analyst, is the writer behind Diff, one of the most popular newsletters on Substack, a platform which enables individual writers to publish newsletters to audiences who pay monthly subscription fees. In an era in which consumers supposedly expect all content on the internet to be free and consequently have irrevocably destroyed business models of traditional print media such as newspaper and magazine, writers like Mr. Hobart are finding that when they are able to form more direct, personal connections with their audiences, cultivated and supported through social media channels such as Twitter and based on the sheer strength of their writing and the quality of their analyses and insights, the audiences in return are more than happy to open up their wallets and pay for content.
We have long known that celebrities and individuals with large public followings – movie stars, athletes, recording artists, even politicians – could use their personal brand to generate economic value. Celebrity endorsement may be the oldest trick in marketing, and it is still being used to great effect today with those that command national and global recognition. The emergence and proliferation of social media, meanwhile, have produced a whole new class of individuals who, while the sheer sizes of their followings do not match those of traditional celebrities, have connected with their audiences in much more intimate, nuanced and direct ways. Often referred to as “influencers” or “creators,” of which aforementioned Ms. Gerard, Mr. Moreman and Mr. Hobart are prime examples, these individuals have crept up into and now occupy the consciousness of specific segments of the public with their own unique appeals, built solely through the virtual and interactive medium of the internet. And their emergence as significant forces in shaping not only cultural trends and narratives around popular zeitgeist through the particular lenses of their respective domains, but also, critically, when, where and on what consumers spend their money, hints at a whole new economic model that can be unleashed, which, coincided with the seemingly inexorable and observably accelerating trend of consumer retail activity moving online, may well transform the face of retail commerce itself.
The initial phase of online migration of retail commerce, which arguably is still progressing today, can be characterized as virtualization of the physical storefront in an online setting. Every single brick-and-mortar retailer learned, as the wave of e-commerce spearheaded by Amazon gained momentum, and an increasing share of consumers adapted to value the convenience of online ordering and delivery to one’s doorsteps over the ability to see, touch and feel the products in person before purchasing, that it simply must have a presence on the internet. In this mode the best the retailers hoped for was to replicate as much as possible the in-store customer experience – in terms of selection, availability, and the ability to see and understand the basic information about the products.
Then, the brands that produce the goods learned that they, too, could be retail outlets in the online world. For the likes of Nike, in the physical world having Foot Locker with thousands of stores globally as a retail channel was an efficient way to distribute its goods to consumers all over the world. But in the online world, such advantages offered by partnering with Foot Locker dissolved almost completely. There was no reason Nike could not create a better online store than Foot Locker, which, after all, was just a single store on the internet, and doing so provided significant and substantial benefits to the brand, such as directly owning the customer relationships, which meant much more robust collection and usage of customer data; full control of customer experience, which could further enhance brand loyalty; and of course, higher profit margins enabled by cutting out the middlemen. Direct-to-consumer emerged as an imperative for all sorts of consumer brands, not to mention digitally native brands that were born with nothing but an online presence.
Today, the entire online frontier of the retail landscape is at the cusp of reshuffling. In not-too-distant future, gone will be the largely undifferentiated retail storefronts – if you’re shopping for sneakers, you will likely no longer shop at websites of Finish Line, Foot Locker or Dick’s Sporting Goods, none of which offers something truly unique. Launches of limited edition or other highly sought-after merchandise will be made available by the brands exclusively or almost exclusively through their own direct-to-consumer channels, and even for non-exclusive items, the advantages of the direct-to-consumer model adopted by the brands will continue to accrue, and from a pure purchasing experience perspective there will almost be no reason for consumers not to buy directly from the brands. But, in such a world, what will drive consumers’ purchasing behavior beyond the marketing muscles of the brands and loyalty from their existing customers? What will create the social buzz and the allure of desirability? What will get consumers to show up at the doorsteps of the virtual stores, so to speak, in the first place? The answer, I believe, will be held by the influencers.
It is my conviction that in the future, we will have a virtual mall of thousands of “storefronts” that are the individual creators and influencers. It will be the very strength of their individualized and differentiated tastes and the connections they have formed with their audiences, and the sense of community and the bond of shared interest and loyalty that exist among the followers of each influencer, on which the viability of these storefronts will rest. While a whole host of monetization avenues have developed for influencers to utilize, from paid sponsorship to ad revenue sharing to direct payment by the platforms, and to tipping and direct patronage by individual supporters, being curators of virtual stores that facilitate consumer purchases which directly align with their individual brands within the specific domain of relevance – whether in cooking, car detailing, business analysis, or sneakers – perhaps is the purest form of economic value creation through which these influencers and creators can achieve monetization. And this, in no small part, is because today, we live in a world of consumerism, in which so much of how we spend our attention, time and financial resources is about buying stuff, such that not only is purchasing activity ubiquitous in our daily lives, but it is, in many significant ways, a way of expressing who we are and what we value.
The most significant power the newly minted class of influencers and creators have, as do traditional celebrities of movie stars and world-class athletes, is to form around themselves communities of similarly interested people. And when their influence over such communities extends to purchasing decisions in ways that converge with their personal brands, it creates a powerful loop that reinforces what attracted the members of those communities to coalesce around the influencers in the first place, because the act of making the purchases gives them yet another avenue of expressing the same tastes and interests that brought them there. This, in turn, will only strengthen the bond within the communities as the socialized context in which these purchases are made becomes part of the fabric of belonging in these communities, and ultimately will further enhance the personal brand power of the influencers at the center. All of this will be made possible on a platform which seamlessly combines features of existing social networks such as Twitter and Instagram with a robust retail e-commerce infrastructure that not only plugs into the direct-to-consumer apparatus of the consumer brands, but also makes the objects of consumer purchases integral parts of the very network. Such a platform, when it comes to existence, will have achieved a true convergence of social media and e-commerce.