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Social Commerce Trends Report
 

Social Commerce Trends Report

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    Social Commerce Trends Report Social Commerce Trends Report Document Transcript

    • Social Commerce Trends ReportKey takeaways from Social Commerce Summit 2010April 19-21, 2010
    • Each year, the Social Commerce Summit forced or “branded” way. Douglas Rushkoff,brings together innovative brands and thought author of Get Back In the Box, first coined theleaders to share best practices and trends in term “viral media,” which was meant as a typesocial media. of media or message that evolves naturally, is invited in by users, and replicates just likeAt the 2010 event held in Austin, Texas, any type of information a user wants to share.Mitch Joel, author of Six Pixels of Separation, It’s called “viral” because, like a virus, it feelsexplained that social media is the first and natural, like it’s a part of the eco-system, andonly real medium where users create their own replicates as part of the natural system ofexperiences. It’s the first channel where brands sharing. A virus gets invited into the bodyhave to force themselves in, because users because it looks and acts like a normal cell,are in control, so they must “invite” them in; then it replicates just like a normal cell.“my” Twitter experience is different from“your” Twitter experience. Mitch is excited Today, consumers use social media in manybecause marketing is finally back to being ways, including making a variety of purchasingabout real interactions between real people. decisions – from buying clothing and electron-While companies are still in control of their ics to selecting insurance or a new bank. Thisbrand, the amplified consumer voice is equal paper uncovers the trends from this confer-to the brand’s voice. ence and includes insights from some of the thought leaders who attended.The customer voice is a form of viral media, TRENDS REPORTmeaning that it evolves naturally – not in aContentsMost social commerce begins with experimentation.............................................................................3Consumers are closer than ever to the people who actuallycreate the products they buy and use...................................................................................................4ROI varies, but it must always be measured..........................................................................................5Social commerce can – and should – spread throughoutthe entire business and across all channels...........................................................................................6Search informs much of how people shop online..................................................................................6Digital Millennials are changing shopping..............................................................................................8To be successful, make the most of your unique influencers................................................................9The potential downfall of social media? Privacy..................................................................................11What will social commerce look like in a year?...................................................................................11Your next steps.....................................................................................................................................11Sources and contact information.........................................................................................................12 2
    • Most social commerce beginswith experimentation.Bazaarvoice CMO Sam Decker encouragesorganizations to “Be the conversation. Yourbrand and the products you sell are a reflectionof the conversations that are happening outthere.” He outlines three roles companiesshould take to facilitate conversations anduse them to improve products. Bazaarvoice CMO Sam Decker advises brandsBe like a parent. Parents have commitment, to be good parents, hosts and prospectors.perspective and give guidance. Try new things,learn, and realize that today is just one step in Social commerce evolves, according toyour evolution. Look at results as a moment Manish Mehta, VP Social Media andin time. Focus on gathering data and content Community for Dell. He suggests there arefrom your users. five phases of social commerce evolution.Be a good host. Make it easy for your Experiment. The social web originally began“guests” (consumers) to share their opinions as an experiment.and meet others like them. Keep themengaged, which will bring more people to Product. Soon, products were created tothe “party” (your site). When you facilitate facilitate social media, such as MySpace,conversations online, you’ll help people bulletin boards, forums, and more.make good purchase decisions, creating an Application. Companies such as Dell attachedasset that builds over time. This is different “social” to their products by adding customerthan what most traditional marketing does; reviews to products at dell.com. They wereyou’re engaging people to help themselves able to measure increases in sales andand others. other metrics with this application of socialBe a prospector. Look for gold. Start with media, so they continued to build out socialthe basic, business-driving metrics such as communications throughout their businessnumber of site visits driven by user-generated Build-out. Once Dell gathered reviews,content, sales conversion, and average order they shared them with other divisionsvalue. Then use customer participation to go to improve customer service andbeyond your site – ask for customer stories product development.via Facebook, or put ratings information onin-store fact tags. Spread this content to Connect and scale. Today, Dell and othershoppers wherever they are, to help them brands work to connect all their social inputs,regardless of where and how they shop. This is wherever consumers want to participate.where true transformation occurs – beyond the They combine all inputs to build relationshipswalls of your online community. and commerce, gain further insights, and understand the entire customer experience. 3
    • In a similar way, golf and tennis retailer Golf- of branding between them – consumers mustsmith learned a lot on its journey into social be close to the products and the peoplemedia. When they launched their Facebook fan actually creating products. With the use of thepage in 2008, they didn’t focus on selling; their Internet today, those who produce productspage began as more of a brand and customer don’t have to be huge corporations; they canservice play. When they responded to custom- use social commerce to get input from, buyer complaints on Facebook, Golfsmith learned from, and sell to others.that those customers were more likely to come Rushkoff points out that social mediaback to Golfsmith.com. promotes honesty and peer-to-peer communication, letting users exchangeToday they use Facebook and Twitter for products, goods and services – and opinionscustomer feedback. For example, in 2009 they – directly amongst themselves. This actuallyasked customers to vote for their favorite de- takes us back to the times of the real bazaar –signs for holiday gift cards, and they have also where trade and commerce were done face toasked customers if they would use a mobile face, among individual people – not betweenapplication, to help Golfsmith determine if they faceless corporations and consumers.should create one. “Social media speaks to the geeks,” he says.And experimentation goes beyond the internet. “We know Google has the smartest, craziestGoogle’s Sameer Samat noted that brands people working for them because their socialshould also experiment with mobile to let media strategy shows us the geeks at theconsumers search for and find specific infor- middle. Social media is a shift from technologymation, whether they’re in a store or on the and media that separate you from consumersroad. Google has seen an exponential jump in – social media brings you closer to the peopleGoogle shopping queries from mobile devices. who actually use your products.”Consumers are closer than Rushkoff advises keeping the people who create products close to the people whoever to the people who actually use them. Marketers have to embrace andcreate the products they buy encourage their true believers – far beyond justand use. people who recommend your products. These“Technology, media and branding create must be true believers of your culture – nota problem for people who want to make your “brand” culture but your actual culture.companies better; they distance companies For example, when Urban Outfitters customersfrom real consumers,” said Douglas Rushkoff, ask questions about specific products online,“and the mythology of a brand means that often the product designer will respond directlyproducts don’t have to be as good as they to the question. In addition, team membersused to be. In social commerce, where from Best Buy and Dell both said that theyconsumers can share their experiences directly refer to customer reviews when developingwith other consumers – without the mythology new products or improving existing ones. 4
    • ROI varies, but it must alwaysbe measured.Just because social media is a new way ofcommunicating doesn’t mean it shouldn’t bemeasured. Like any promotional or marketingtactic, objectives must be set and tracked –and they should ultimately track to bottom linecompany goals.Golfsmith tracks hard impact (dollars) andsoft impact (things like branding, stayingtop of mind, which are harder to track) todetermine which social media they continue topursue. For example, they track all links fromFacebook and Twitter and look at customerinteractions on their site. To effectively tracksoft impact, they developed a score cardwhich measures trends for traffic, sales, likes, Get Back in the Box author Douglasposts, customer services, mentions, retweets Rushkoff says product creators must stayand more across all their social networks. close to product users.Golfsmith recommends that brands tag all linksto user-generated content to understand how people – those who design and create thepeople who read or contribute user-generated products – in the middle, but still close tocontent interact with the site. For example, the customer. Ideally, every employee in theGolfsmith found that those who interacted company stays very close to the customer.with customer ratings had 11% higher revenueper person, a 2% increase in AOV and a 9% Seth Greenberg from Intuit adds, “Give up theincrease in conversion. The most interesting idea that it’s not about the money. It is aboutfinding was that a full 18% of all Golfsmith the money. People are talking about you onlinevisitors interacted with customer Q&A or – it’s happening whether you’re involved orreviews between January and April 2010. not; it’s okay to set goals, set a bar.”Douglas Rushkoff contends that the goal of Manish Mehta from Dell advises companiessocial media isn’t sales; it’s meant to build the not to get head-faked by “shiny objects.”culture of your industry. It can start with the Keep your eyes on what’s important to yourculture in your company and extend to the business, and make decisions from thisculture of your customer, your shareholders, point. He also reminds brands to stay open toyour partners, and your competitors. But, different types of ROI. The ultimate challengeultimately, it’s the culture of the thing you do. in social media involves putting a value onThe new organizational chart for a genuinely relationships, networks and connections.social organization puts the most competent 5
    • Google’s Sameer Samat encourages brands to think beyond their sites.Social commerce can – and content to directly impact natural search, mobile, and Google advertising results. Brandsshould – spread throughout can expose star ratings to searchers, put theirthe entire business and logos next to their reviews, and link directlyacross all channels. back to the product page where a searcherSocial media is unique because anyone can can buy. This lets the consumer reviewsparticipate – much different than traditional gathered on the site help consumers who areadvertising. For example, Golfsmith gets their still just searching for products.entire organization involved in social media. Manish Mehta from Dell suggests thatThey display their entire Twitter feed in their companies embed “social” in every functionoffices, so anyone can see what people are of the organization, from sales to productsaying about Golfsmith at any time, and the development. Embed social information andappropriate people jump in to help customers culture across the fabric of your business; itin need. Golfsmith also uses customer reviews shouldn’t just be about sales and marketingand ratings in all types of marketing, and they – get your products, support, and humanhave looked at customer support questions resources teams to think socially andbefore and after the launch of their online Q&A transparently, too.solution to understand how online questionsand answers can help them reduce customer Search informs much of howsupport calls. They also look for new ways people shop online.to connect their social networks; todayGolfsmith’s Facebook page helps people More and more of today’s shoppers begin withengage, then directs them to Golfsmith.com search – most of them with Google. 87% ofto make purchases. internet users have used the internet to browse research and compare products in the lastGoogle’s Sameer Samat recommends year (eMarketer Report, March 2010). 45%that brands leverage the entire shopping of in store purchases are influenced by onlineecosystem – multiply the value of all research (Forrester 2009). Sameer Samat,content — by making it available beyond Director of Product Management for Google,the organization’s site. For example, Google highlighted three industry trends that driveProduct Reviews Program is the first program Google’s strategy: online-to-store shopping,that lets online brands use their full review mobile, and social. 6
    • Many people are first researching online, then one click. Innovations in mobile have onlygoing to a physical store to make purchases. just begun.Retailers should think cross-channel; Google realizes that “social” is just the webconsumers will interact with any channel catching up with life. Each minute, more thanthey want, when they want. Many retailers 24 hours of content is uploaded to YouTube,have divided brick-and-mortar and online and 270,000 words are written every minuteresponsibilities within their organizations, on Blogger. If you do a query on Twitterwhich contradicts this trend. The linear every morning on “What to wear,” you’ll getshopping trend is being shifted; consumers responses every few seconds. Even if a brandexpect a more cohesive experience. Innovative isn’t mentioned, participants are still talkingretailers are tearing down some of these walls, about products.not letting “their organizational chart show upin their marketing or product development,” Sameer suggests making these trends part ofaccording to Sameer. a company’s operational plans. For example, retailers should make sure they have 3GAligned with the localization trend is the mobile coverage in all stores, making it easypromise of mobile: the ability to target users for customers to bring information from theon a one-to-one basis. A mobile phone is web directly into store aisles. He also suggestsnot shared, it’s usually on and with you at all that UPC codes for products be prominentlytimes. It knows a lot about you, your calendar, displayed, so people with mobile phones canyour social network, and it’s location-aware: it easily scan them to get online information withknows where you are. new smart phone applications.Currently two thirds of the world’s population However, Mitch Joel believes that, with thehave mobile phones, and smart phones increasing connectedness of everyone, searchare expected to eclipse PC sales by 2012. will actually be less pervasive in shopping.Google’s internal data has shown a 3000%+ He believes people will get information fromgrowth in mobile “shopping” queries over the friends, then purchase immediately, such aslast three years; mobile queries to Google now through their smart phones.exceed online queries in some geographies,and the number of queries issued to Google To illustrate this point, he spoke of a dinnerMaps products has grown substantially. he had with two other bald men. They startedRetailers are testing in-store traffic based on talking about how they shaved their heads,online traffic in specific DMAs. and one of them suggested a razor that has a vacuum in it. One of them found it onGoogle has added click-to-call ads on mobile Amazon.com via his smart phone anddevices, which is good for local businesses purchased it immediately.because the phone knows the closest locationfor the user, so he or she can call with 7
    • Resource Interactive’s Kelly Mooney interviews four typical millennials.Digital Millennials are Millennials explain that they’re always connected.changing shoppingMillennials are ages 10-28, and they make a » They all prefer Facebook and use it a lot; none of them regularly use Twitter.$200 billion contribution to our economy eachyear. They have become our largest generation, » They use Facebook mostly for socializing;bigger than the baby boomers; there are about they are not sure they would shop82,900,000 Millennials. Resource Interactive via Facebook.has researched Millennials since 2006 and has » Privacy could be the downfall of Facebook;uncovered key defining traits of millennials. it’s very important to have control over who sees your profile.Defining traits of Millennials » They send more than 100 texts per day;» Perpetually connected – they are never they are constantly texting. without their phones and are heavily » In large college classes, students will see engaged with social networks. hundreds of laptops open to Facebook;» Multi-tasking and “productive” – they are some are watching Hulu.com with one watching TV, homework and online at once. earbud speaker in, while “listening” to» Filtering for immediacy and control – they’re a lecture. smart about marketing and will filter it out. The recession has had an impact» Self-expressive yet assimilative – they on Millennials. express individuality, but it’s also very important to be part of the group. » The recession has made some of them not want to buy as much as they did in» Optimistic and self-entitled – they’ve grown up in very affluent times until just the last the past. few years. » They’re spending less today; waiting for sales and coupons.Kelly Mooney interviewed a panel of four » Their parents are giving them less moneyMillennials at the Social Commerce Summit, than they did in the past.made up of males and females from age » The 13-year-old who still lives at home13 to 23. must work harder to earn money from her parents now. 8
    • » None of them have their own credit cards; take core business values and blow them out they’re fearful of credit cards and are more exponentially. According to Siegel, “We don’t comfortable with debit cards. If they don’t have a logo. We don’t have a style guide. We have the money for something, they don’t have a spirit.” Their social strategies reflect this buy it. They see their parents have a hard spirit and get their customers involved. Here time keeping up with their credit cards so are some guidelines Dmitri suggests. they are less likely to use them. There are some people you want to beSocial media influences their shopping and friends with, and some you don’t, just like inpurchase decisions. any social situation. Urban Outfitters started out by featuring some of its customers on» They research purchases carefully, asking its blog – people they or their customers their friends and family, and customer “want to be friends with.” They interview their reviews. Some post questions on Facebook customers to draw in others who share the to their network about products. same lifestyle/style.» If they are “fans” of a brand on Facebook, too many messages from a brand can But don’t be a snob – don’t ignore people. become annoying. To get all types of consumers involved – not just the fashionistas or style mavens who» Some of them use Foursquare or Gowalla; regularly review products. Urban Outfitters ran they may be interested in getting offers a contest where consumers submitted images when they “check in.” of love, so anyone could submit somethingThey have unique interactions with media. creative. The company also embraces different uses of its products – photo reviews show» They watch most of their TV on Hulu.com; the way people actually wear Urban Outfitters they only watch “real” TV for sports. clothes, even paired with clothing and» None of them have magazine subscriptions; accessories that does not come from Urban they get most of their information and Outfitters. Their products don’t really come to news online. life until people show exactly how they actually wear it in the real world.To be successful, Be a good listener. This is basic. Urbanmake the most of your Outfitters gets about 1,500 reviews per week;unique influencers. they read them and dig into them. You also see what it’s like to be your own customer.Social media levels the playing field, For example, one woman said that a shirt shemaking consumer contributions as loud as purchased was too big, but she cut it and wore– or sometimes louder than – the corporate it off the shoulder, and submitted a photo ofmarketing message. Dmitri Siegel, Executive her new creation. This gives Urban OutfittersDirector of Marketing, Urban Outfitters, shared a relevant data point about how the product ishow this unique brand – with independent, actually used.creative consumers – uses social media to 9
    • Ask good questions. If you put a good Music can really set the mood. Urbanquestion out, you’ll be amazed at what you Outfitters has Music Mondays on Twitter,get. For example, last year Urban Outfitters giving away hundreds of thousands of songsdid a “lo-fi, high style” sweepstakes/contest, each month; it’s a top topic on Twitter eachwhere customers shared the cool things they week. They usually feature unsigned bands,had created for cheap. When Urban Outfitters and play these songs in their stores, too,started getting photographs from their which creates a sense of discovery in thecustomers, they saw that they are beautiful store. Urban Outfitters believes that if someoneand creative. Today, when Urban Outfitters recommends good music to you, their level ofmashes up their own professional photos credibility goes up.with those submitted by customers, even the Be spontaneous. Urban Outfitters shares livemarketing team can’t tell the difference – which links to their in-store events, so customers canis exactly as it should be. Urban Outfitters’ watch even if they’re across the country.customers are creative and inspire Dmitri andthe design team. Don’t take yourself too seriously. Anybody can be cool, but awesome takes practice.Make some introductions. Urban Outfitters Social media is a chatty medium; be authenticadded community Q&A to their site, which to your voice.created a good format for introducingcustomers to one another; they now get about Be vulnerable – share information to400 questions each week. Other customers get information. When Urban Outfittersas well as Urban Outfitters designers respond. encouraged customers to send photos ofThe more people you can get involved in the their mothers as part of a Mother’s Dayconversation, the better the experience. contest, their team members sent in their own photos, too.Stop talking about yourself so much. Beingsocial allows you to let your customer be the Keep in touch. These relationships have realvoice for awhile; be quiet, ask questions, and value – keep them going. Keep up with thesee what they have to share. people you have interacted with.You need a good party spot. It must be It’s less about numbers; more about one-free to participate. For example, Urban to-one connections. Social media can’t beOutfitters has often unsigned bands perform measured solely by number of people whoin its Backlot, their back parking lot behind a potentially see the information, like traditionalflagship store, and they stage similar events advertising is measured. The deep connectionsaround the country. They’ve been doing these with individuals build over time and create anevents for years, so now tens of thousands annuity that continues to grow.of people watch them through their livebroadcasting. During and after the events,they feature cool people they met in theirblog and on Twitter. 10
    • The potential downfall of social What will social commercemedia? Privacy. look like in a year?Users must be able to control who sees their The third annual Social Commerce Summitinformation, and brands must be responsible in lets us look back over the years to see thedata sharing and usage. true evolution of social commerce. Two years ago, topics revolved mostly around retailManish Mehta from Dell claims that the big, and customer ratings. Today’s brands arescary risk of social media could be privacy. taking social commerce – including all socialMarketers must be mindful not to blindly interactions with consumers – seriously.promote social commerce growth at the Companies are learning to relate and act moreexpense of privacy (or even the perception as people, breaking down inauthentic walls ofof loss of privacy). “marketing-speak.” And they’re experimentingA panel of four Millennials – digitally-enabled and building best practices along the way.people between the ages of 10 and 28 – said The 2010 Social Commerce Summit reflectsthat they must be able to control who sees a moment in time. We’ll keep you posted ontheir information on social networks such as what continues to evolve.Facebook. They are also reticent to sharedetails about how they spend their money and Your next steps.are fearful of credit cards, partially due to thefear of identity theft. These insights should answer some questions, but raise even more. Bazaarvoice is the world leader in social commerce, serving top brands across a huge variety of industries. Visit us at www.bazaarvoice.com and schedule a demo, where we’ll help you understand how to connect to consumers, build engagement, and drive measurable return on investment. 11
    • Sources and » Who are Digital Millennials and How are They Changing Shopping? – a panelcontact information of MillennialsPresentations excerpted in this paper came Interviewed by Kelly Mooney, CXO,from the following sessions at the 2010 Social Resource InteractiveCommerce Summit, April 19-21, 2010. For Twitter: @pkmooneymore information on this and future events, Site: resourceinteractive.comvisit socialcommercesummit.com andsocialcommercesummit.co.uk. » The Social rEvolution at TurboTax: Friendcasting the age of media anarchy Seth Greenberg, Director of National» From Participation to Transformation Media and Digital Marketing, Intuit Sam Decker, CMO, Bazaarvoice Twitter: @sethg Twitter: @samdecker Site: linkedin.com/in/sethgreenberg Email: sam.decker@bazaarvoice.com» Social to the Core: How New Media - » How Urban Outfitters Makes the Most of its Unique Influencers Unlike Marketing - Forces You to be Dmitri Siegel, Executive Director Competent Again of Marketing, Urban Outfitters Douglas Rushkoff, author, Twitter: @dddmitri Get Back in the Box Site: dmitrisiegel.com Twitter: @rushkoff Site: rushkoff.com » Organizing the World’s Information for Shoppers» The Bottom Line: Measuring Social Sameer Samat, Director of Media to Deliver Business Value Product Management, Google Manish Mehta, VP Social Media Site: linkedin.com/pub/ and Community, Dell sameersamat/0/6b/530 Twitter: @Manish@dell.com Site: huffingtonpost.com/manish-mehta» How Golfsmith measures ROI Jamey Maki, Director of E-Commerce Twitter: @golfsmithhq Email: jamey.maki@golfsmith.com 12