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Social Commerce Briefing

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<ul><li>“ The Net has already disrupted the content industry, the next disruption will be commerce.” </li></ul><ul><li>The Economist, September 2010 </li></ul>

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Today’s presentation <ul><li>Introduction </li></ul><ul><li>Context </li></ul><ul><li>7 Social Commerce Forces </li></ul><ul><li>What you can do today </li></ul><ul><li>Q&A </li></ul>

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What is social commerce? <ul><li>Adding social features to e-commerce sites </li></ul><ul><li>Adding e-commerce functionality to social sites </li></ul><ul><li>Combination of 1 & 2 </li></ul>

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3 functions of social commerce: <ul><li>1. promote brand loyalty (propensity to repurchase) </li></ul><ul><li>2. drive traffic to main e-commerce site </li></ul><ul><li>3. reshape the buying experience. </li></ul>

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Today’s presentation <ul><li>Introduction </li></ul><ul><li>Context </li></ul><ul><li>7 Social Commerce Forces </li></ul><ul><li>What you can do today </li></ul><ul><li>Q&A </li></ul>

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The rise of social shopping <ul><li>23% of Twitter users follow businesses to find special promotions or sales </li></ul><ul><li>14% of Twitter users use the stream to find and share products </li></ul><ul><li>25% of customers connect with brands on Facebook to receive discounts </li></ul><ul><li>More than 50% of Facebook fans and 67% of Twitter users are more likely to make a purchase from the brands they follow </li></ul>

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The rise of social commerce <ul><li>Over the last decade, e-commerce sales have grown on average 19% per year, far faster than offline retail. </li></ul><ul><li>Even during the dark days of 2009 when retail sales shrank 2%, e-commerce vendors grew sales 1.4%, . </li></ul><ul><li>Facebook now boasts nearly 600 million active worldwide users (150 million in the U.S.), and 56% of online shoppers use Facebook. </li></ul><ul><li>A recent survey of 135 top retailers and consumer goods manufacturers by research firm Altimeter Group found 86% of respondents are preparing to launch some sort of social commerce strategy by 2011. </li></ul>http://www.practicalecommerce.com/blogs/post/788-J-C-Penney-Moves-Entire-Product-Catalog-to-Facebook http://www.altimetergroup.com/

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Holy Grail of Social Media - ROI <ul><li>Social commerce allows retailers to monetize their social media investment. </li></ul><ul><li>Social commerce sweet-spot is where brands and retailers monetize their social media investment by helping shoppers use their social intelligence to make smart shopping decisions. </li></ul><ul><li>We are Not measuring fans and number of posts. The measure is on hard metrics e.g. site visits, conversion and average order value </li></ul>

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Today’s presentation <ul><li>Introduction </li></ul><ul><li>Context </li></ul><ul><li>7 Social Commerce Forces </li></ul><ul><li>What you can do today </li></ul><ul><li>Q&A </li></ul>

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1. F-Commerce <ul><li>Why sell via Facebook? </li></ul><ul><li>50% users log on every day </li></ul><ul><li>Web’s most visited site </li></ul><ul><li>FB users spend more on consumer products than non FB users </li></ul><ul><li>FB users more likely to recommend products </li></ul><ul><li>Stimulate word of mouth around new products and services </li></ul><ul><li>Low cost environment that does not necessitate messing with the e-commerce mothership </li></ul>http://socialcommercetoday.com/paul-chaney-selling-on-facebook-dealing-with-4-issues/

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1. F-Commerce – Tab Stores http://www.facebook.com/dexter?sk=app_107254772673026

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1. F-Commerce – Page Stores

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1. F-Commerce – Wall Stores

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2. Facebook Deals <ul><li>Why sell via Facebook Deals? </li></ul><ul><li>Mobile web will outgrow desktop in 5 years </li></ul><ul><li>Facebook have now launched their location service ‘places’ </li></ul><ul><li>Over 200 million people use Facebook on their mobile </li></ul><ul><li>Location enables you to get closer to your customers by: </li></ul><ul><ul><ul><ul><li>- Offering special discounts, promotions to increase footfall </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- Add incentives to keep users coming back to your store </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- Tie location into your own loyalty programme </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- Reward brand loyalists </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- Provide tours to potential customers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- Encourage existing customers to share tips </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- Give out product samples </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- Organise a swarm </li></ul></ul></ul></ul>http://www.slideshare.net/MeasureWorks/measureworks-efinancials-best-practices-for-a-successfull-mobile-experience-v5-slideshare

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2. Facebook Deals

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3. Facebook Connect <ul><li>Why add a social layer to your site? </li></ul><ul><li>Facebook’s reach, across the entire web is incredible. </li></ul><ul><li>Take advantage of this huge silo of information that Facebook has about its users, their personality, friends and much more. </li></ul>

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3. Facebook Connect <ul><li>Example </li></ul><ul><li>ROI for Levis social </li></ul><ul><li>shopping. </li></ul><ul><li>15% increase in sales </li></ul><ul><li>50% increase in average order value </li></ul>

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Facebook Credits <ul><li>Sell products on Facebook page using credits </li></ul><ul><li>Incentivise purchases </li></ul><ul><li>Reward interactions and engagement </li></ul>

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4. Group Buying <ul><li>Introduction </li></ul><ul><li>Groupon is the “fasting growing company ever” – growing faster than EBay, Yahoo, Facebook or Google grew – founded November 2008 </li></ul><ul><li>Only company to have been valued at more than a billion dollars faster the You Tube </li></ul><ul><li>Groupon has a $1.3bn valuation </li></ul><ul><li>You Tube has yet to turn a profit, but Groupon was in the black in its first 7 months </li></ul><ul><li>On track for $500m revenue this year </li></ul>http://socialcommercetoday.com/pbs-podcast-on-groupon/

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4. Group Buying <ul><li>Why sell via Group Buying? </li></ul><ul><li>After search engines, coupon sites are the most popular online shopping tool (before reviews, retailer emails, price comparison sites, shopping portals and social networks) </li></ul><ul><li>Perfect in a recessionary environment </li></ul><ul><li>Encourages word of mouth amongst consumers on deals </li></ul><ul><li>Simple and satisfying shopping experience </li></ul><ul><li>Simple and clean profit model </li></ul><ul><li>93% of retailers using group buy sites would use them again - Opus Research &quot;Local Social Commerce - The Explosion of Group Buying&quot; August 2010 </li></ul><ul><li>the absolute number of people that use email dwarfs the quantity of individuals that use Twitter regularly </li></ul>http://internet2go.net/webcasts/social-networks/webcast-local-social-commerce-opportunities-group-buying

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4. Group Buying <ul><li>Example </li></ul>http://mashable.com/2010/08/19/gap-groupon/

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5. Flash Sales / VIP Sales <ul><li>Why use Flash Sales / VIP Sales? </li></ul><ul><li>Flash sale sites are becoming a new way to shop online and for consumers to feel smart about the way they shop </li></ul><ul><li>Scarcity and exclusivity offers work best. </li></ul><ul><li>Consumers are becoming more accustomed to the members-only shopping concept. </li></ul><ul><li>There is now a market for more mainstream goods. </li></ul><ul><li>Established retailers have an advantage. With an existing customer base, access to inventory and expertise in their category. </li></ul>http://www.businessoffashion.com/2010/04/infographic-where-the-wealthy-shop-online.html

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5. Flash Sales / VIP Sales <ul><li>Example </li></ul>

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6. YouTube <ul><li>Introduction </li></ul>http://www.youtube.com/t/press_statistics

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6. YouTube <ul><li>Why sell via YouTube? </li></ul><ul><li>Direct sales channel for a brand </li></ul><ul><li>Contextual links to purchase product </li></ul><ul><li>Easily accessible through natural and paid search </li></ul><ul><li>Video advertising creates consumer lust </li></ul><ul><li>Utility for advocates </li></ul><ul><li>More than 159,000 hauls have been posted on YouTube. </li></ul>http://www.istockanalyst.com/article/viewiStockNews/articleid/4301871

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6. YouTube <ul><li>Example </li></ul>

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7. M-Commerce <ul><li>Introduction </li></ul><ul><li>Smartphone users to grow 22% in 2011, bringing the percentage of the population owning a smartphone to 23% this year compared with 19% in 2010. </li></ul>Source: eMarketer – Mobile Commerce Investments to Pay Off in 2011, Jan 2011

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7. M-Commerce <ul><li>Why sell via M-Commerce? </li></ul><ul><li>Smartphone owners integrated their </li></ul><ul><li>devices into their shopping routine in </li></ul><ul><li>December 2010 by using them to: </li></ul><ul><li>Find deals </li></ul><ul><li>Research products </li></ul><ul><li>Solicit opinions from friends and family </li></ul><ul><li>Share shopping experience with friends on a social network </li></ul><ul><li>Buy products. </li></ul>Source: eMarketer – Mobile Commerce Investments to Pay Off in 2011, Jan 2011

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7. M-Commerce <ul><li>Why sell via M-Commerce? </li></ul><ul><li>eBay’s mobile sales grew 134% between Nov 25 to Dec 25 over the same period in 2009, generating nearly $100 million in gross merchandise value. </li></ul><ul><li>On Black Friday, 5.6% of consumers logged onto a retailer’s site using a mobile device, a jump of 16.7% compared to the same day in 2009. </li></ul><ul><li>Shopping-related Google searches (stores/products/prices) from mobile devices were up 230% by mid December on 2009. </li></ul>Source: eMarketer – Mobile Commerce Investments to Pay Off in 2011, Jan 2011

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Word of caution <ul><li>Social Commerce is not just about selling! </li></ul><ul><li>Brands need to be social and interactive </li></ul><ul><li>Educate, inform and entertain, rather making the hard sales pitch. </li></ul><ul><li>In summary: direct sales remain secondary to primary social media objectives (customer service, customer relationship management, customer insight, and interactive news wire). </li></ul>

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Today’s presentation <ul><li>Introduction </li></ul><ul><li>Context </li></ul><ul><li>7 Social Commerce Forces </li></ul><ul><li>What you can do today </li></ul><ul><li>Q&A </li></ul>

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Deploy the LEAD approach <ul><li>L isten </li></ul><ul><li>E xperiment </li></ul><ul><li>A pply </li></ul><ul><li>D evelop </li></ul>http://socialcommercetoday.com/where-to-start-with-social-commerce-the-lead-strategy/

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Next Steps – 2 month plan <ul><li>Next 14 Days: Examine what areas you have for opportunities. FivebyFive can work with you to show how social commerce will create and retain paying customers. </li></ul><ul><li>Next 30 Days: Start with a small scale experiment. We can work with you to set this up. E.g. Try with a Facebook Campaign store (a pop up shop for a campaign) - users need an incentive to purchase via these channels. </li></ul><ul><li>Next 50 Days: Apply learning’s from experiment, integrate more tools and make social commerce a core part of your digital strategy. </li></ul>

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<ul><li>“ Social e-commerce will continue to grow because it helps solve three persistent retailing problems: the high cost of attracting visitors, the low probability that they become buyers and the difficulty of getting them to come back.“ </li></ul><ul><li>The Economist, September 2010 </li></ul>

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Social Commerce Ideas

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Drive footfall with Facebook Deals

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Drive footfall using Group Buy

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Drive footfall with mobile vouchers

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Drive footfall with haul videos

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Experiment with price points

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Share in-store experiences

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Develop engaging customer loyalty programmes

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Group buy on social platforms

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Flash sales on Facebook / Twitter

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Social shopping apps on Facebook

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Exclusives for social followers

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Promote new lines with VIP flash sales

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Gamification on product scanning

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Tom Chapman @tomchapman