Social Commerce Presentation

Slide 1: UK Social Commerce

Slide 2: Overview • What is ‘social commerce’ • Drivers of social commerce • E-consultancy’s survey • Figleaves case study

Slide 3: User-Generated Content and Social Media Have Exploded Wikis Social Blogs Networks Peer- Ratings and Reviews 2-peer Facebook Tagging 3

Slide 4: The Next Explosion: Social Commerce • Put simply, social commerce is about customers having the means to interact with one another in order to make better buying decisions. 4

Slide 5: Factors Driving Social Commerce • A shift in influence from traditional media and corporate speak to people listening to their peers. – Consumers are seen as communication channel – Consumers are authoring brand messages – In effect, working for the Marketing department and generating the message in addition to carrying it. • The consumers have a voice – Consumers now can not only influence purchase decisions, but they can also influence product design • Convergence of stakeholder roles – Consumers are more invested and therefore more loyal to companies and brands

Slide 6: Social Commerce Report Research Methodology • Produced by E-consultancy in association with Bazaarvoice • Surveyed 800 respondents over a three week period (June – July 2007) • 360 respondents classified themselves as online sellers • 80% respondents were based in the UK

Slide 7: The Current E-commerce Landscape • 50% of online sellers say they expect 20% or more online sales growth in 2008* • For multi-channel companies, online accounts for just under a third of all sales* • Online sales in the UK amounted to an estimated £46.6bn in 2007, up from £30.2bn last year, according to the IMRG. – Online sales will reach an estimated £78bn a year by 2010. *E-consultancy / Bazaarvoice Social Commerce Report 2007 7

Slide 8: How are Companies Reacting? • 67% say that a social networking strategy is a high or medium priority • More than half of all online sellers (51%) consider UGC as either ‘extremely important’ or ‘very important’ to company strategy over the next year. *E-consultancy / Bazaarvoice Social Commerce Report 2007

Slide 9: Online Sellers’ Adoption and Consideration of Ratings and Reviews Online sellersSocial Commerce Report 2007 *E-consultancy / Bazaarvoice Online Sellers Online retailers that are using that are that rank ratings ratings & considering the reviews & reviews as a use of ratings & high or medium reviews priority 28% 52% 80% *E-consultancy / Bazaarvoice Social Commerce Report 2007 9

Slide 10: What About Negative Reviews? 4.3 out of 5

Slide 11: Importance of Ratings and Reviews to Consumers How important Would reviews Do you find are consumerSocial Commerce Report 2007 *E-consultancy / Bazaarvoice impact the ratings and reviews when likelihood that reviews helpful making a you buy from when making a purchasing that site? decision? purchase? 61% 55% 63% extremely or very “Would be more likely Yes important to buy” Source: UK Consumers, Vizu.com Polls, N=100+ 11

Slide 12: Benefits of Ratings and Reviews Benefits of Ratings and Reviews 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Higher conversion Improved retention SEO benefit Ideas for Differentiation from Lower costs to Reduced returns rates and loyalty product/services competitors serve customer rate development Percentage of respondents rating as ‘major benefit’ (Social Commerce Report 2007) 12

Slide 13: Case Study • Founded in 1998 • World’s largest seller of branded intimate apparel • Carries over 200 brands of lingerie, swimwear, sleepwear and hosiery for women and men • figleaves.com offers a shopping experience that is highly personalised, engaging, fun and backed by an award winning level of service • figleaves.com puts the consumer at the centre of what they do

Slide 14: Implementation of Ratings and Reviews on figleaves.com • Launches Ratings & Reviews Jan 2007 • Drive reviews through dedicated landing pages, on-site offers and email campaigns • Customers are engaged – 73 reviews for Fantasie bra • Average rating of products is high – 4.5 out of 5

Slide 15: The Results • Product Coverage – Shoppers on figleaves.com want Ratings & Reviews. figleaves.com has a significant 43.9% product coverage (and growing!) • Review Volume Growth figleaves - UKReview Volume Growth figleaves - US Review Volume Growth 7000 3500 6000 3000 5000 2500 4000 2000 3000 1500 2000 1000 1000 500 0 0

Slide 16: The Results • The same products with reviews have a 35.27% higher overall session conversion rate. • Conversion was not negatively affected Overall Average Overall Average for products without Before Going Live After Going Live reviews

Slide 17: The Results • The Look-to-Book ratio is 4X lower (better) for 4X products with reviews compared to those without Look-to-Book ratio shows the percentage of people who visit a website compared to those No 1-4 5-10 11-20 21+ who actually make a purchase. Reviews This ratio is an excellent measure of ratings and reviews ability to influence the consumer to make a buying decision.

Slide 18: Social Commerce Context Examples

Slide 19: “This 'social commerce' is creating new and more meaningful ways for retailers to interact with customers. Search, communication and community have the potential to have an even more powerful impact on commerce when closely tied together.” ~Ken Goldstein, CEO of Shop.com

Slide 20: Questions? Linus Gregoriadis, Head of Research E-consultancy.com Email: linus@e-consultancy.com Website: www.e-consultancy.com