Five by Five Social Commerce

Social Commerce Briefing

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

Today’s presentation
Introduction
Context
7 Social Commerce Forces
What you can do today
Q&A

What is social commerce?
Adding social features to e-commerce sites
Adding e-commerce functionality to social sites
Combination of 1 & 2

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

Introduction
Context
Q&A

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

The rise of social commerce
Over the last decade, e-commerce sales have grown on average 19% per year, far faster than offline retail.
Even during the dark days of 2009 when retail sales shrank 2%, e-commerce vendors grew sales 1.4%, .
Facebook now boasts nearly 600 million active worldwide users (150 million in the U.S.), and 56% of online shoppers use Facebook.
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.
http://www.practicalecommerce.com/blogs/post/788-J-C-Penney-Moves-Entire-Product-Catalog-to-Facebook http://www.altimetergroup.com/

Holy Grail of Social Media - ROI
Social commerce allows retailers to monetize their social media investment.
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.
We are Not measuring fans and number of posts. The measure is on hard metrics e.g. site visits, conversion and average order value

Introduction
Context
Q&A

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

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

1. F-Commerce – Page Stores

1. F-Commerce – Wall Stores

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

2. Facebook Deals

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

3. Facebook Connect
Example
ROI for Levis social
shopping.
15% increase in sales
50% increase in average order value

Facebook Credits
Sell products on Facebook page using credits
Incentivise purchases
Reward interactions and engagement

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

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

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

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

5. Flash Sales / VIP Sales
Example

6. YouTube
Introduction
http://www.youtube.com/t/press_statistics

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

6. YouTube
Example

7. M-Commerce
Introduction
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.
Source: eMarketer – Mobile Commerce Investments to Pay Off in 2011, Jan 2011

7. M-Commerce
Why sell via M-Commerce?
Smartphone owners integrated their
devices into their shopping routine in
December 2010 by using them to:
Find deals
Research products
Solicit opinions from friends and family
Share shopping experience with friends on a social network
Buy products.

7. M-Commerce
Why sell via M-Commerce?
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.
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.
Shopping-related Google searches (stores/products/prices) from mobile devices were up 230% by mid December on 2009.

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

Introduction
Context
Q&A

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

Next Steps – 2 month plan
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.
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.
Next 50 Days: Apply learning’s from experiment, integrate more tools and make social commerce a core part of your digital strategy.

“ 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.“
The Economist, September 2010

Social Commerce Ideas

Drive footfall with Facebook Deals

Drive footfall using Group Buy

Drive footfall with mobile vouchers

Drive footfall with haul videos

Experiment with price points

Share in-store experiences

Develop engaging customer loyalty programmes

Group buy on social platforms

Flash sales on Facebook / Twitter

Social shopping apps on Facebook

Exclusives for social followers

Promote new lines with VIP flash sales

Gamification on product scanning

Tom Chapman @tomchapman

Five by Five Social Commerce

by fivebyfive on Apr 12, 2011

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