Crowdsourcing in Retail: All You Need to Know

February 15, 2023

crowdsourcing in retail

Crowdsourcing is a process through which a large number of people extend their support to a particular endeavor, project, or business through finances, ideas, and tasks. The diverse group of participants involved with crowdsourcing may be paid or unpaid and usually get together through various internet channels and platforms.
The contribution made by each participant in a crowdsourcing project could be freelance work, innovative ideas, information, or monetary support. In return for the contributions, participants may be paid, unpaid, or given access to a service or monetary gain of equivalent value.
Retail businesses can use crowdsourcing solutions for retailers to source various services, including on-demand workforce, financial assistance, product design and development, marketplace solutions, technical assistance, and delivery services. Crowdsourcing has a wide range of applications for retail businesses, and when used effectively, it can help businesses reduce costs, save money on marketing, improve customer experience, and increase sales.
Crowdsourcing allows for a human-centric business model where any business can quickly access its target audience and the best talents in its respective fields. It is the future of collaborative business development in a highly connected world and allows more opportunities to innovate and rethink the existing conventional processes.

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The difference between crowdfunding and crowdsourcing

Crowdsourcing is not to be confused with crowdfunding, which is solely the collection of money to support a business, an individual, or a charity. Crowdfunding projects may or may not compensate the funders, depending on the agreement in place.

Crowdsourcing goes beyond crowdfunding and includes more than just financial support collection from willing contributors. Crowdsourcing can also include work hours, knowledge sharing, and more. It can pertain to any contribution made to a particular project via a group of people over the internet without necessarily having to be a full-time part of it.

Difference between Crowdsourcing and Crowdfunding

Crowdsourcing and Crowdfunding Explained – What’s the Difference?

Types of crowdsourcing solutions for retailers

Based on the services utilized, crowdsourcing can be broadly categorized into four types:

  • Wisdom

    It is considered that the collective wisdom of a group is usually better than what individual experts can offer. When a company requires a resolution to an issue, it can use crowdsourcing services to gain insights and expert knowledge on the same from a crowd.

  • Creation

    The online knowledge database Wikipedia is one good example of this type of crowdsourcing, where multiple people join together and collaborate to create some product, idea, or design. Open-source software is also built on similar crowdsourcing methods.

  • Voting

    Voting or surveys allow companies and individuals to gain feedback and insights from their audience.

  • Funding

    Various modes of crowdfunding allow people to raise money for any purpose. It allows people to rely on many funders, each making smaller contributions, rather than relying on a small number of donors or investors to make large contributions.

How to use crowdsourcing in your retail business

Some useful crowdsourcing solutions that can be of help to retailers are:

  • Copywriting

    Content, product descriptions, reviews, and buying guides can be crowdsourced for social media content, blogs, product localization, and any other relevant content.

  • Data processing

    Retailers can use crowdsourcing resources to perform data analysis and reporting.

  • Boost online reputation

    Crowdsourcing can effectively build a brand’s image in digital spaces. It can be used to develop better websites, manage social media accounts, comment moderation, make your business more searchable, and more.

  • User experience testing

    Customer experience is key to driving better sales performance. Retailers can use crowdsourcing to test their services, products, and overall user experience.
    There is no particular constraint on how you can use crowdsourcing. It allows businesses to connect with various contributors that would otherwise not be possible. Traditionally, you would probably get expert wisdom from just a few retail professionals. But with crowdsourcing, you can get never-before-seen ideas that regular professionals would not even dare to question. Through crowdsourcing, you can get varied suggestions and generate many out-of-the-box ideas.
    It can help you check product field marketing as well. Several platforms, such as Trax Retail, Roamler, BeMyEye, and Field Agent, have helped retailers better understand how their products perform in stores.

How does crowdsourcing for retailers work?

Any retail business can use crowdsourcing to achieve its business goals within its budget and time limitations. Crowdsourcing allows retail businesses to get access to a wider talent pool. It lets them connect with a huge digital community, which can provide them with a wealth of information, skills, and market knowledge. With crowdsourcing, businesses can make quicker decisions, innovate better and be aware of their market conditions and target audience.
Businesses can use crowdsourcing platforms to request information and get quick answers to their queries. For instance, survey sites allow retail businesses to quickly gather feedback and responses from their target audience and know how their products will perform in the market.
Retail businesses can also post any requirements for short-term gigs or talents for their projects. They could gather new ideas for their marketing strategy and product design and collect instant feedback from the collective participation of the crowdsourcing platforms. Being customer-oriented, retail businesses can benefit much more from crowdsourcing and thus create better engagement and customer loyalty.
Retailers can break up a big job or project into smaller gigs and crowdsource them to multiple people. For instance, a company can create a competition for logo design and invite entries from multiple graphic designers for a modest fee. Once they pick their favorite design from the entries, they can finalize it and pay the respective designer the full amount for the logo.

Applications of crowdsourcing for retailers

While the general applications and uses of crowdsourcing apply to retail businesses, specific crowdsourcing cases prove to be more beneficial for retail companies. Here are some areas where retail businesses can apply crowdsourcing for optimized operations:

  • Funding

    Crowdfunding is the most popular form of crowdsourcing application. It is used by several startups and upcoming businesses.These platforms can help a business gain funding from the general public and act as a launchpad to get things started and running.
    These platforms also build a brand and identify the products and companies that resonate well with consumers. Some companies have also used these platforms to access distributors and third-party contractors for their business.

  • Design

    Several companies have used crowdsourcing platforms to get an idea of the designs that go well with their customers. Consumer input from crowdsourcing sites has been very helpful in creating innovative products and packaging. For instance, retailers can develop a concept or a prototype and ask their customer base to provide inputs and surveys to help shape the final product or sales strategy. Clothing stores can get information on what collections are expected and can thus stock their stores depending on the information gathered from their consumer base. There are many more ways a company can use the feedback and inputs that crowdsourcing provides.

  • Marketplaces

    Marketplaces offer a great deal of assistance to other individual creators and small businesses in gaining a consumer base. Platforms such as Minted and Launchpad from Amazon help incentivize innovation and allow smaller companies to join a marketplace and be discovered by a wider audience.

  • Technology

    Crowdsourcing technology and related expertise are a great way to improve a retail business. Crowdsourcing can identify areas of improvement in the business model and integrate new technology for improved inventory and customer experience. Tech crowdsourcing can also be used to develop new product ideas and integrate technology such as IoT into everyday products. Fashion retailer TopShop has tried its hand at crowdsourcing to build new product lines. They are open to collaborating with startups through their launchpad platform, Top-Pitch, to create fashion integrated with wearable technology. Some companies are also putting up competitions and innovation drives to encourage the tech crowd to help them develop new products.

  • Delivery

    Crowdsourcing can also be used to access a wider workforce, working voluntarily for some form of compensation or sometimes even for free. For instance, the delivery app Deliv has used crowdsourced drivers to make their deliveries faster. Uber has also extended its services in the form of UberRUSH, which integrates its taxi service model into a retail delivery service.
    Crowdsourced delivery is a powerful enabler to retail businesses, allowing for quick, convenient, and cheaper deliveries.

Benefits of crowdsourcing for retailers

The major advantages of crowdsourcing are cost reduction, quicker operations, and broader access to a huge pool of talent and workforce that may not be otherwise available to the business.
The advantages and benefits of crowdsourcing for retailers are:

  • Access to a wider network of expertise and knowledge

    Crowdsourcing opens doors to directly connect with the top talents in the industry without having to make costly investments for talent acquisitions.

  • Open innovation

    Crowdsourcing connects you with a wide range of audiences, thus letting you get access to plenty of good ideas and insights. This can help accelerate innovation in your retail solutions and strategies.

  • Direct connection and deeper engagement with consumers

    Crowdsourcing allows businesses to get in touch with their consumers directly and gather more insights than traditional methods. Crowdsourcing allows companies to reach a huge audience that would otherwise be limited to small focus groups.

  • Crowdsourced jobs

    Many jobs, from website creation to copywriting and designing, can be effectively crowdsourced at a cheaper rate.

  • Wide-scale collaboration

    Crowdsourcing makes it possible to bring together multiple user groups, skill levels, and experts towards a common cause. It can help reach out to different communities and aid in easy collaboration across various disciplines, as is required for a project.

  • Quick resolutions

    Unlike regular talent acquisitions or design processes, crowdsourcing allows for quick information gathering and faster access to a wide audience. This helps companies and individuals working with tight deadlines and limited resources.

Best crowdsourcing tools and solutions for retailers

Here are some popular crowdsourcing platforms and tools that retailers can use:

Graphic and product design

  1. Designhill
  2. Flickr Creative Commons
  3. 99Designs
  4. Unsplash

Challenges and concerns of crowdsourcing retail

While crowdsourcing offers many benefits for a retail business, one should also be wary of the various challenges and concerns that come with it.
The results of an operation or feedback could be biased or skewed based on the source — crowd, platform, or group. Retailers must take proper caution to avoid such issues to get accurate results.
Crowdsourcing is most suitable for short-term gigs and funding projects with a definite goal. When applied to long-term projects, it can cause problems with accountability and sustainability of the project. Most crowdsourcing projects have a definite timeline or deliverables to be achieved. Not having clear goals will lead to squandering resources. It could also become counterproductive as all the different inputs from multiple sources can be too overwhelming to manage.
Crowdsourcing can sometimes be challenging to figure out the best ideas and talents you can get. The overall direction of projects and goals could be misdirected as too many ideas can sometimes distract from the actual goal.
Crowdsourcing can present a challenge with respect to intellectual property protection. Companies should make the necessary arrangements and legal contracts to resolve any issues arising from ownership disputes for any idea, design, or product.
Companies must also take extra caution regarding their confidential data, as opening up their projects and ideas to a wider audience can lead to a lack of confidentiality. For example, disclosing too much information about your marketing strategy may alert your competitors to it, giving you an advantage.

FAQs on Crowdsourcing in Retail

What is the difference between crowdsourcing and crowdfunding?

  • Crowdsourcing is a process through which a large number of people extend their support to a particular endeavor, project, or business through finances, ideas, and tasks.
  • Crowdfunding is solely the collection of money to support a business, an individual, or a charity. Crowdfunding projects may or may not compensate the funders, depending on the agreement in place.

How are the applications of crowdsourcing in a retail business?

  1. Copywriting
  2. Data analysis and reporting
  3. User experience testing

How can crowdsourcing impact technology?

Crowdsourcing can identify areas of improvement in the business model and integrate new technology for improved inventory and customer experience. Tech crowdsourcing can also be used to develop new product ideas and integrate technology such as IoT into everyday products.


Ridhi Sharma