Beyond Marketing: Generating Trust to Sell Online
Small merchants need to create and maintain trust with customers to sell online, but they could use more help
Superplatforms & Small Merchants Series #1
Small merchants in Africa or micro and small enterprises (MSEs) primarily publicize informally through social media to drive online sales. While e-commerce opens an exciting new world to small retailers, it is also confusing, risky, and replete with horror stories since protections for consumers or merchants are inadequate.
Most social media tools are designed to push information to potential consumers, and do not go far enough in helping retailers generate trust with their customers. In an environment where many merchants may be using the same stock photos and there are no ratings, MSEs struggle to earn customers’ trust and, equally, to trust them.
BFA’s FIBR research on small merchants, platforms and e-commerce found that gaps in trust at three key points: 1) demonstrating the quality of the product being advertised, 2) ensuring payment on delivery, and 3) dealing with errors/complaints. The retailers we met are patching together a mix of offline and online tactics to try to derive the benefits of selling online despite the barriers to trust, but there are clear opportunities to improve and adapt online platforms to better serve them.
1. Demonstrating Quality
Most online sales take place via informal marketing on channels such as WhatsApp, Instagram, and Facebook, which have not yet built tools for retailers to leave ratings or comments. While full-service e-commerce platforms like Jumia help manage reputation and keep fakes and frauds off the platform, few MSEs are using them because of requirements for legal registration and bank accounts.
Without ratings, comments or photos from past customers, MSEs try to overcome trust barriers by building a personal brand and cultivating loyal customers. For example: Delia is an engineering student who helps her mother promote her business as a hairstylist. Delia set up an Instagram profile for her mom’s business and posts about her work there everyday. Delia posts pictures of actual hairstyles her mother has executed as well as inspirational anecdotes about her mother as a woman and entrepreneur. In this way, Delia has helped her mother build a personal brand as a talented stylist and as a trustworthy person. Delia has also taught her mom to use YouTube to stay up to date on the latest trends and styles.
While Delia’s innovative approach has helped bolster her mom’s business, a system for rating informal transactions would help both buyers and sellers increase their willingness to participate in online trade.
2. Ensuring Payment on Delivery
Since payments are not completed within the informal marketing channels, many sellers worry that customers will reject deliveries (even after they have incurred costs) or even hold up the delivery rider. While sellers would like to get customers to pay in advance, only those shipping long distances were able to get buyers to pay in advance using mobile money. In most cases, buyers are not willing to pay until they see the goods.
In China, one of the ways that trust was built up in e-commerce was the provision of escrow services for small transactions taking place over Alibaba’s platforms. In the early days of eBay, Paypal provided insurance for both buyers and sellers against bad behavior from the other. These products are not currently available in Tanzania or other nascent e-commerce markets (although Lipasafe is an escrow service for small transactions that recently launched in Kenya).
3. Dealing with Complaints
Customer service, returns, and refunds are not guaranteed in online buying. Even platforms such as Jumia do not standardize returns in Tanzania, leaving customers with fewer protections when things go wrong and making them weary about buying online.
Instead, MSEs must be extremely responsive and transparent on social media to demonstrate their trustworthiness. Sellers find this need for rapid responsiveness and transparency burdensome; they frequently mentioned the effort required to keep up with the flood of messages on social media, where customers expect instant responses. One seller described how she dealt with a customer complaint that came through her customer WhatsApp group: first she deleted the negative message, then she settled offline with the customer, then she asked the customer to post the resolution online so the whole group could see.
While built-in complaint features would help, the autoresponder message on WhatsApp for Business has been a good step forward. It lets the customer know that the business will get back to them without immediately burdening the retailer.