Amazon is reportedly starting to trial a product sampling scheme in the United States where partners like Maybelline and Folgers pay the e-commerce giant to send free samples to consumers based on what the retail giant predicts they will buy.
The Seattle-based company hopes that by sending samples of new products to customers based on their consumer habits with machine learning, it can boost its advertising business to overtake Facebook and Google as the precise targeting and platforms will reduce spending and manpower costs.
While still a novelty in the US, sending samples to consumers is not a new practice in the Asia Pacific, where the likes of ScanDelight, now known as Sample Store, has been offering consumers a selection of samples for products ranging from skincare to healthcare supplements in Singapore since 2008.
Sample Store, now a core part of the 200-year-old Singapore Post’s advertising and marketing offerings after being acquired by the country's postal service provider in 2013, is marketed as an experiential marketing platform, or 'tryvertising', that claims to have worked with over 300 brands, a majority of which are small and medium-sized, to send out over 790,000 samples to over 290,000 members in 1.2 million households around Singapore.
Customers are given the option to choose up to four free samples from different products, following which SingPost will mail the samples to the delivery address indicated on their profile. They will then gain points by reviewing the samples they have tried, earning a point for every review submitted, which can be accumulated to redeem even more samples. This will allow potential customers to reading the reviews before deciding if they are keen to sample or purchase products from a brand.
Sample Store also introduced a ‘By-Invite Only Sampling’ feature, which provides its members exclusive opportunities to experience new products ranging from the latest technology products to the latest beauty samples and food products, as well as an ‘Expert Reviews by Beauty Panellists’ feature, which provide members with lifestyle content from beauty and health influencers.
It recently formed a new partnership with the Taiwanese government and online multiplier beauty88 to support Taiwanese brands in overcoming challenges like understanding local consumer behaviors, establishing the right channel and retail strategy, and ensuring orders are fulfilled promptly to launch their products into Singapore and beyond.
Derek Tan, the assistant vice president of Sample Store, explains that for a legacy business like SingPost, it had to find a way to evolve to stay relevant by diversifying its business beyond mail delivery and push into e-commerce locally and overseas. It acquired American e-commerce provider TradeGlobal in 2015 for US$168.6 million.
“SingPost always had a very traditional business of sending out letters, but because the business had to evolve, we wanted to try something new to offer to the brands out there,” Tan tells The Drum at SingPost’s headquarters in the East of Singapore. “They now have the option to allow people to sample their products before buying as we know that now people are really shopping more online.”
While the TradeGlobal deal has yet to eke out profits for SingPost, Tan remains optimistic about SingPost’s e-commerce plans and is confident that Sample Store will be the key to success. He explains that if brands do not want to pay out of their pockets for display ads on Facebook or search ads on Google to advertise their products, their only other option is using traditional media.
He points out that with traditional media, it is very limited because consumers no longer go to mainstream media like newspapers and magazines but are on social media daily. That is why Sample Store relies heavily on influencers, EDMs and social media to reach out to them.
“The influencers will review the products on the website itself and from there, we ask them to pick which products they like using a stars system,” explains Tan. “We then rate them accordingly and get them to send feedback about whether they like the product and if they will go buy the retail size.
“The brands will evaluate these reviews and gauge how popular their product is. It works well especially for new brands, wanting to come to Singapore. That's what we did with Taiwan brands in 2018, where 50 of the brands that came over, each of them providing 1,000 pieces of samples.”
According to Tan, Sample Store does not select members to try and review the samples, giving them the options to pay to try the sample once the product is listed on the website. For influencers, it will work with brands to select an influencer or a group of influencers to try and review the products.
Once the sampling period is over, Sample Store will send these brands a post-campaign report, explaining the nitty gritty parts of the campaign, before allowing the brands to conclude about the campaign themselves.
“Most times when brands do sampling, they are just pushing things to people who might not even appreciate it. Producing these samples cost money as well, which is why this is a very effective way for the brands to spend their marketing dollars,” Tan says. “We offer a whole suite of services for any companies that are interested in e-commerce from website creation, from the ePayment platforms all the way down to the last mile of delivery.”
“Sample Store fits into this equation quite nicely, especially for SMEs because they are able to provide a very relatively cheaper option for consumers to sample their products in the wider market, gauge the customer response. If it is good, they can then scale-up with us if they want, using our end-to-end solution.”
“If they think perhaps response is not so good, we can figure out with them where the marketing has gone wrong and if their product is not really accepted here. They can then tweak without making too much of a financial impact.”
When asked if SingPost is making a play for the already-crowded South East Asia e-commerce scene, which has players like Lazada, Zalora, Qoo10, and Shopee, Tan dismisses any concern that SingPost is a threat because even though it has an e-commerce business, he sees no point challenging those platforms because ‘they are best doing what they are doing’.
“We are more than happy to supplement, and we know very clearly where we stand. We really want to work with the brands to make sure that they are marketing right and in trying to do sales, which is the e-commerce part,” he says. “The good thing is offline activities. Of course, we can always bring back a campaign. So far brands that keep coming back to us for the past few years because they see the ROI and people buying the actual products after the campaign.”
Tan is also unworried about Amazon entering the sampling space as he thinks their formula is probably different. He reiterates that Sample Store allows its members to choose the product that they want to sample, thereafter they will not be able to get it again. For Amazon, he points out customers are beholden to the e-commerce platform’s wishes them to try products from certain brands.
Future plans for Sample Store include expansion into other markets, creating personalized experiences for members who request for samples through the use of artificial intelligence to remember their preferences and creating omnichannel strategies for retailers at the SingPost Centre, where SingPost’s headquarters is located alongside a five-story mall it owns, and houses up to 130 stores in fashion, dining, and entertainment.