Best known among crowdsourcing platforms is the mighty Wikipedia, the number 7 Alexa ranked encyclopaedia, but crowdfunding, ultimately a subset of crowdsourcing that involves garnering money from participants, has been tapped by platforms like Seedrs and Crowdcube to give life to thousands of ideas.

Retailers generally struggle, however, to leverage the concept properly to improve their products or their business models. Crowds are different to employees; several of their motivations trump a financial return: they want insight, to make a meaningful contribution, and the crowd is often motivated by the possibility of gaining recognition amongst a large group of their peers, as reported by Kevin Boudreau and Karim Lakhani writing in the Harvard Business Review.

Structuring a crowdsourcing project

Ivo Lukas of marketing agency 24Notion outlines the ingredients for a successful crowdsourcing project: retailers should first have a clear objective, as the more abstract their intentions, the less likely the effort will be a success. Secondly, the retailer’s brand needs to be strong and intuitively match the crowdsourced objective. Thirdly, don’t expect investors to fall into your lap once you’ve posted your project online; you need to have lain the groundwork before that by securing involvement from angel investors, corporate partners, and friends and family. Finally, make sure the incentives you provide work for your audience (‘Oh, look: a sticker!’ said very few investors ever), and set realistic expectations about the outcome.

Use of crowdsourcing in retail

Social media is a driving force behind crowdsourcing campaigns. When luxury cosmetics firm Lancôme launched its #bareselfie campaign, it asked its Instagram followers to post photos without make-up. In this way, the customer was acknowledged by the brand itself, which contributed to widespread take-up of the effort.

Research by visual marketing firm Olapic has demonstrated that photo tie-ins by retailers on Facebook or Instagram increase the odds of purchase by five to twelve per cent. Plus, when a product takes off on social media, such information can help gauge demand. The lesson there, perhaps, is keep your offerings, whether crowdsourced or otherwise, bright and catchy.

Persistent concerns with crowdsourcing

Mashable defines crowdsourcing as distributed problem-solving, but that‘s only true, of course, if it solves a problem. Paul Waghorn of IdeaConnection points to where things can go wrong: recurrent technical issues over confidentiality, a lack of communication with contributors, IP contamination and conflicts, the creation of ideas rather than solutions, and the severe overburdening of technical staff.

It will be important, then, for keen retailers to identify projects that actually warrant a crowdsourcing solution, and when they do, to be prepared. Ensure the platform can handle all envisioned participants, and while it is difficult to forecast a project‘s adoption by the crowd, be ready to dedicate a group of staff to oversee submissions and ad hoc technical solutions and to act as a set point of contact.