Unilever, one of the world’s 5 largest consumer goods companies, is attempting to crack down on influencer fraud by banning influencers with paid or fake followers, reports The Wall Street Journal.
Influencers are only becoming more influential, and for brands like Unilever (which spent $9B on brand marketing last year) shady social practices are an expensive problem.
As consumers increasingly lean on social media to discover new products, Beyonce’s blessing has become big business. Brands pay influencers big bucks to evangelize their products, lest they end up in a $1.3B hole on the wrong side of a Kylie Jenner tweet.
But, influencers are only as valuable as their followers -- making the top 20 most-followed celebrities powerful enough to walk away with $550k+ per post. As influencer costs skyrocketed, Unilever began to monitor follower quality to see what the hell was going on.
What it found couldn’t be fixed with a Valencia filter: Turns out, about 20% of mid-level influencers’ followers are fake.
“Unilever uses followers to figure out how much to pay someone,” Paul Kahn of Upfluence, an influencer marketing company, told The Hustle. “So when people claim to have 50% more followers than they actually do -- and Unilever pays them millions -- it’s a real problem.”
A recent New York Times investigation also revealed that 15% of Twitter users were bots and that “paid followers” often ended up being fake profiles.
But, despite the prevalence of fraud (78% of Ritz Carlton’s followers are fake) brands continue to invest in influencer marketing. A poll last year showed 75% of marketers paid influencers to promote their products -- and half planned to increase their influencer budgets.
Last week, Thomas Frudaker was arrested on suspicion of returning a computer without all of its components to a Walmart in Yuma, AZ. But, turns out, it wasn’t Frudy’s first rodeo -- the 23-year-old had pulled the same stunt at 1k other Walmarts across the country, authorities say.
This would make Frudaker a modern day Butch Cassidy and an obviously exceptional bandit, but this type of thievery (return fraud) is an increasingly common problem for retailers -- both on and offline.
Authorities later stated that Frudaker had defrauded more than 1k Walmart stores across the country over 18 months -- which (if accurate) means Frudaker swindled more than 20% of Walmart’s 4,761 American locations.
By repeating a simple pattern 1.) buy hardware, 2.) secretly remove valuable components, 3.) return the gear for full price -- Frudaker cost Walmart an estimated $1.3m, police say.
Walmart isn’t the only retailer wrestling with this problem. Across the industry, retail fraud is a $17B problem.
Just this month, a couple was sentenced to nearly 6 years in jail for stealing $1.2m worth of electronics from Amazon -- claiming false defects to receive free replacements.
Now, Footloose-Frudaker may face a similar fate. After he was booked on 6 felony charges by Yuma police, Frudaker was being held on $40k bail and appeared in court yesterday afternoon.
Back in December we reported on the unmanned brick-and-mortar race heating up between the Chinese e-commerce behemoths, and Jack Ma’s Alibaba seems to be breaking away from the pack.
According to Axios, over the past year Alibaba has revamped about 1m mom-and-pop shops, along with about 100 superstores (AKA “hypermarkets”) across China to support their new digital retail initiative.
The renovations have transformed stores from brick-bound, offline vessels into state-of-the-art digitalized bodegas of the future -- equipped with AI apps, foot traffic sensors, and, of course, Alibaba’s mobile-payment system, Alipay.
Around 42% of global e-commerce transactions took place in China last year.
Now, Alibaba’s wants to capitalize on China’s hyper-fragmented brick-and-mortar landscape, by making each business its own self-contained, AI-infused island, in which only their affiliates reap the profits.
Last year Alibaba paid $2.9B to acquire 36% of Sun Art Retail Group, which operate nearly 400 hypermarkets, giving their affiliates access to Alibaba’s customer insights, supply-chain management, and retail tech.
Aside from Amazon’s Amazon Go experiment, retail giants in the West have done seemingly little to keep up with the pack.
But, Alibaba believes their technology is the foundation of this new digital future, and that only businesses who buy in will survive.
And, if Western companies aren’t careful, they could miss the boat.
After startups riddled San Francisco streets and sidewalks with hundreds of electric scooters, the city temporarily banned the 2-wheeled terrors.
Now, SF’s Municipal Transportation Agency has created a 12-month experimental permit program to help regulate this new wave of transportation, and 12 scooter hopefuls are reportedly vying for a ticket to ride.
Ride-hailing giants Lyft and Uber joined Spin, LimeBike, and Bird in the race for permits, along with a darkhorse you may remember: Razor, babayyy.
*The crowd goes wild*
Originally developed by Micro Mobility Systems in 2000, Razors instantly became synonymous with the aluminum scooting vessels themselves, selling over 5m in the first 6 months, and winning Toy of the Year in 2001.
The company, now owned by RazorUSA LLC, moved into electric scooters back in 2003 and has since diversified into other scoot-related products like the RipStik.
Now, the king of curb-hopping is back, and looking to reclaim its throne.
The new program puts a 1,250-unit cap on the total number of scooters that can be offered to customers within city limits for at least 6 months, and will allow 5 active permits.
That means at least 7 contenders will walk away empty-handed, while the winners will have to split the total scooter count between them.
Permit recipients will be decided in late June, and scooters will remain off the streets while applications are processed.
See you there.
-- Kera “A GIF is worth a thousand words” Zacuto, Director of Events
In this section, we examine trends and products floating around the web and place them on the much-loved adoption curve.
New parenting app Cleo just raised 10.5m to help working parents, well, parent. The app specializes in providing new parents with information on prenatal and postpartum care, among other childcare topics.
And while parenting “consultants” are typically a luxury reserved for high-earners, Cleo hopes to help democratize valuable childcare information. One small step for VCs, one giant leap for Millennial child-rearing. [Business Insider]
We live in the on-demand age, people -- you don’t need to go back and forth with some greasy agency. Just use Tailor Brands and get it made today.
Their logo tool is like a trip to the graphic optometrist. Answer a few questions about your hustle and then Tailor Brands narrows down a design, letting you choose between different looks, feels, and fonts. A few clicks later and BOOM, you can browse dozens of ‘tailor-made’ design options. [Tailor Brands]
The worldwide, paint splattering boyband Blue Man Group recently settled a royalty dispute with one of its early music directors Ian Pai for a cool $3m.
Pai argued the founders did not adequately compensate him for his artistic contributions. But don’t worry, the painted trio have turned rhythmically banging PVC pipe into a worldwide phenomenon netting a $100m a year in revenue -- i.e. they’ll survive. [New York Times]
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