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Social Commerce - The Next Big Thing in Social
 

Social Commerce - The Next Big Thing in Social

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The overwhelming feeling in the industry is that social media has to start delivering real business benefits. It’s an exciting time, it’s a challenging time. Our social media expert, Rohit Onkar ...

The overwhelming feeling in the industry is that social media has to start delivering real business benefits. It’s an exciting time, it’s a challenging time. Our social media expert, Rohit Onkar thought it would be interesting to explore social commerce at a time like this.

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  • 2011 was a seminal year for digital marketing in many ways. For the first time ever, digital advertising eclipsed all other media, except television, to become the medium where the second highest amount of advertising dollars are spent. Forbes magazine forecasts that digital advertising will take over television by 2016. E-commerce sales in 2011 crossed an unprecedented 8 trillion dollars. Today, the reach and penetration of social media is more ubiquitous than ever before. The overwhelming feeling in the industry is that social media has to start delivering real business benefits. It’s an exciting time, it’s a challenging time. We thought it would be interesting to explore social commerce at a time like this.
  • I want to start-off by giving everyone a definition of what social commerce is and what it entails. A subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the buying and selling of products and services.
  • What we just saw was a textbook, somewhat jargon-y definition of Social Commerce, lets try to look at what it actually means. The options, for anyone who wants to take a plunge into Social Commerce, fall into three broad categories. One, Social Networks can be used as an advertising tool to draw customers to websites/e-commerce platforms. Two, it an be used to gather data about shoppers and recommend products based on interests. Lastly, brands can set up fully functioning storefronts inside social networks.
  • - What is the effect of ratings and reviews on the purchase decision? – we try and find out.
  • Would you trust product reviews by a consumer you are not aquainted to? How about trusting reviews written by your peers?
  • Do ‘positive’ reviews/ratings at point of sale impact the purchase decision? - Have you ever come across a ‘negative’ review/rating at point of sale?
  • How can a consumer be sure that the reviews/ratings are unbiased or not brand influenced? There is a doubt in the consumer’s mind that reviews are controlled by the brands. Brands decide upon what needs to be showed up where in an attempt to positively influence the purchase decision.
  • Comparison shopping is a trend that is catching up in India Research shows that consumers tend to discuss and compare products before making a purchase - Can such independent product directories which claim to give you ‘your best price’ be trusted?
  • Can we trust the organic search network? -Well perhaps to a certain extent, but it lacks the personal feel – too much automation.
  • If your CEO were to recommend you a product, perhaphs you would end up buying it. But if your dad were to talk negatively about the same product, would you still buy it? - Can a consumer trust experts and authorities to a full extent?
  • Well not most of the time! - If you are paid by the brand ( to write a positive review) as well as sites like these ( to write an honest review ), you could have both sides of the cake!
  • People generally have a tendency to talk about their purchases and the experience they have had with a particular service/product. Marketers believe that word of mouth is the most economical yet efficient form of marketing. - But who do consumers listen to?
  • An online survey conducted by the Nielsen group might just have the answers. 90 % of people trust recommendations from people they are acquainted to/ known people - Advertising not that impressive after all!
  • So as a marketer where do I invest my resources? eg: a group/community on LinkedIn has a question asked by one of its members, “Betsy here is seeking referrals for a particular employment assessment tool” She gets two replies, both of these have referred the same product! a definite influence on Betsy’s purhase decision as they all belong to the same group on LinkedIn and are known to each other.
  • - As a brand, if you can estanlish trust by making an ‘influencer’ give the consumer social proof, you have won the battle.
  • - How many of you become more inclined towards buying a product if you see that your friend has “liked”/”shared” that product?
  • - eg: Alyssa is asking her colleague to comapre two products for him- involving him in the purchase decison. Bob, instead of comparing the 2 products, recommends something that is ‘preferred’ by him. - Sheep stealing? Word of mouth between friends has the power to invade into their purchase cycle.
  • If you see that certain number of your friends like a particlular product, would you succumb to the peer pressure? Integrating the social media experience within your website, utilizing the social graph of individuals to its full effect!
  • What if you get real time updates about purchases made by your peers? Would that impact your preference for a particular product?
  • The bottom line is, when it comes to social media, influencers are your key! It’s all about identifying them and getting them to do the rest.
  • How do you identify influencers? – Know your online Consumer, study his behaviors, likes & dislikes and how he interacts, with whom does he interact, who does he listen to, know their social graph in and out. Once identified, how do you work through them – Engagement is the key. Engage your Influencer to get him to ‘talk’ for you. If you have engaged with him, he will talk when you ask him to and influence many consumers’ purchase cycles.
  • - Engaging with people on your Facebook fan page is an excellent way to tap influencers.
  • eg: Getting influencers to influence their peers’ purchase decisions You ask your customers to talk for you and they are more than happy to do it! PS. You can never force your customer, so the recommendation/referral will always be fair and just!
  • - Influencers willingly promote your product/service without bias.
  • Engaging your employees can also be very beneficial as they are your brand ambassadors! eg: An employee acknowledging a brand mention
  • The next area we want to touch upon is social shopping. During the course of our research, we came across this quote from Jeff Bezos, the CEO of Amazon, possibly the most influential man in the world of e-commerce, he said and I quote “ Online shopping, in its current form, is a rather individualistic and lonely experience and there is a need to make it more fun and entertaining.” That was something that really rung true to me. Shopping is an intrinsically social experience. Bezos felt that social networks such as Facebook can provide solutions to that effect.
  • The first manifestation of social shopping is having fully functional store-fronts within social network. The example that you see here is Aeropostale, a US based apparel brand, the consumer base of which consists primarily of teens and young adults. Shopping on Facebook is based on the rationale that young people are spending more and more time on social networks and more and more of their activities, including shopping, should be on these networks. A Facebook store-front works exactly like any e-commerce platform and you can integrate your purchases with your timeline. Others brands which have successfully implemented Facebook store-fronts include Levi’s, Pampers and Southwest Airlines among others.
  • Expert advice is another very effective tool that brands can use to push their products on social networks. A pertinent example of this is French Connection’ s ‘YOUTIQUE’ on Youtube, set up a dedicated Youtube channel with videos from one of your top stylists giving styling tips with an annotated ‘buy’ button.
  • Bonanza, another prominent e-commerce site, offers synchronous shopping. Shoppers on the website have the options of joining live chats where they can interact with other shoppers and get instant opinions about various products.
  • BuddyBazaar is essentially a social selling website. BuddyBazzar’s basic value proposal is that you can sell your old stuff to your friends instead of selling it to strangers on a site like eBay. You can login through your social media accounts and sell your things to your friends and contacts.
  • Groupon is another example of social shopping, group buying being intrinsically social. Buyers can also have conversations about the present deals.
  • Users follow your pins – in other words similar interests Excellent medium to spread your content (integrated with Twitter & Facebook) Users can know what their friends are sharing Brands also have an option to add a ‘price tag’ to products with the image linking back to their website
  • Next up, I want to talk about Social Applications, these have come up in a big way this past year, especially towards the later part of the year. They use data from your social profiles to recommend products for your friends or yourself.
  • GiveEmThis is an example, You can integrate your social profile and pick a friend who you want to buy a gift for. The service goes through their profiles to suggest a gift, which can be brought right there( integrated with Amazon)
  • Shopycat is Walmart’s very own social gift-giving applications. Works almost exactly like GiveEmThis
  • Overstock.com”s gift-giving application on Facebook is a precursor to the other social gift-giving apps.
  • How does all this fit into the purchase cycle? Lets talk about the 3 R’s Research – Marketers need to research at the same time as the online consumer researches, tapping consumers at the realisation and awareness stages! Reach – It is very important to reach consumers through forums/communities. Here the online consumer is quite advanced in his purchase cycle and most likely to complete the purchase. React – Once the consumer converts, see whether he can be used as an influencer. Listen to him, talk to him, influence and engage him to make him an asset to you and your brand.
  • The value of the time consumers spend online and on social networks and blogs continues to grow, most visible through the influence on purchase decisions. For instance, 60 percent of people who use three or more digital means of research for product purchases learned about a specific brand or retailer from a social networking site. - State of the Media: Social Media Report Q3
  • Social media’s popularity continues to grow, connecting people with just about everything they watch and buy. The latest Nielsen insights provide some answers on exactly how powerful this influence is on consumer behavior, both online and off. As the influence of social media – and those using social media – continues to grow, it’s crucial for traditional media, retailers, brands and advertisers to understand how different consumer segments use and share content
  • Every Brand must have a strategy in place to identify the influencers and then target the right people through them ‘ influencers’ should be used to embed trust in the consumers Social proof should be developed by identifying the right influencers for specific consumers and using them appropriately Engaging is the key, make sure you not only communicate as a brand but also through your network Walmart being a huge global chain, still has local tabs on their facebook fan page for local deals Social Commerce has the potential to dismantle the Supply chain – one of the major advantages a consumer can get is the reduction in price. A brand must make sure that its present on the right platform – a platform where its TG is!

Social Commerce - The Next Big Thing in Social Social Commerce - The Next Big Thing in Social Presentation Transcript

  • SOCIAL COMMERCE
  • Social Commerce… A Definition “A subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the buying and selling of products and services.”
  • • Social Networks can be used as an advertising tool to draw customers to websites/e-commerce platforms • Can be used to gather data about shoppers and recommend products based on interests • Set up fully functioning storefronts inside social networks
  • Ratings & Reviews Sharing & Referring Social Shopping Forums & Communities Social Applications Conclusions Agenda
  • Ratings & Reviews
  • Why do we trust what other buyers recommend?
  • Why should we trust the reviews at point-of- sale?
  • Traditional approach: the brand controls the reviews not really social, no trust Traditional approach: the brand controls the reviews not really social, no trust
  • Can we trust independent product directories?
  • Should we trust independent search?
  • Maybe we can trust experts and authorities?
  • Hmm, apparently not…
  • Word-of-mouth, but who can we trust?
  • Have some degree of trust in the following forms of advertising
  • Social proof: Put your money where your mouth is
  • Trust + Social Proof =
  • Ratings & Reviews Sharing & Referring Social Shopping Forums & Communities Social Applications Conclusions
  • Sharing & Referring
  • Social network sharing: word-of-mouth for friends
  • This has led to an answer to… What do peers think of this product?
  • An answer to… What are my peers buying?
  • Social Network Theory Influencer marketing is not spamming! it’s working through the right people (and letting the network do the rest)
  • Ratings & Reviews Sharing & Referring Social Shopping Forums & Communities Social ApplicationsConclusions
  • Forums & Communities
  • Consumers following a brand
  • Consumers discussing products
  • Consumers helping consumers
  • Employees building brand equity
  • Ratings & Reviews Sharing & Referring Social Shopping Forums & Communities Social Applications Conclusions
  • Social Shopping
  • Social storefronts… “put the shop in the street”
  • Expert fashion advice with annotated ‘buy’ button.
  • Synchronous shopping… “just like in real life”
  • Garage sales… “shopping among friends”
  • Group buying… “get a better deal”
  • Ratings & Reviews Sharing & Referring Social ShoppingForums & Communities Social Applications Conclusions
  • Social Applications
  • Social gift-giving: Data is gathered about shoppers and products are recommended based on interests
  • Shopycat – Walmart’s social gift-giving application on Facebook
  • Overstock.com’s Facebook app – See friends with upcoming birthdays and find gifts based on interests
  • Ratings & Reviews Sharing & Referring Social Shopping Forums & Communities Social Applications Conclusions
  • Conclusions
  • Realization Awareness Strong Preference PreferenceConsideration Purchase Research Reach React
  • 1. What is our strategy for targeting the right people? 2. How do we build trust in our brand? 3. How do we develop social proof? 4. Are we engaging instead of just broadcasting? 5. What can we do locally instead of globally? 6. Can social media disrupt our supply chain? 7. Are our consumer apps where our consumers are?
  • Questions Don’t forget to fill up the form and we will make sure we get back to you 