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Five by Five Social Commerce
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Five by Five Social Commerce

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  • Definitions Social Shopping – facilitating [digital] interaction among customers as part of a shopping experience (in order to improve the shopping experience) Social Commerce – facilitating [digital] interaction among customers as part of a shopping experience (in order to improve sales effectiveness)
  • Pampers offered its Facebook fans a chance to buy Pampers Cruisers 3 weeks before they went in store. 1000 packs went in under an hour. They conveyed this offer via Facebook wall and user clicked on image which expanded in their news feed giving them the option to purchase the product all within Facebook. The ASOS f-commerce store will allow transactions to take place without leaving the network, and will include full product search, as well as like, share, and review tools.  Given ASOS’ gold-standard standing in the UK online retail world, other leading retailers and brands are likely to take note – and take the cue from ASOS. Expect to see a 2011 move in the UK to harness Facebook both as an e-commerce platform, and a social layer to integrate into site-based e-commerce.
  • GAP offered 10,000 free pairs of jeans, for the first 10,000 check-ins, and 40% of all regular priced merchandise for check-ins thereafter. Individual Deals (Check-in and claim deal) Loyalty Deals (Deals for multiple check-ins) Friend Deals (Check-in together to get the deal) Charity Deals (User checks-in, business donates to charity)
  • Adding social layer to existing site for retail - justification similar to Levis store Tea Collection, the e-commerce site for kid’s clothes uses the Like button to let users vote on which items get selected for promotional sales. Traffic rose 300%, and sales multiplied 10x when the most voted for items (receiving 30K votes) went on sale
  • CAUTION Groupon is great for restaurants who have the margin to do it and who need publicity ** Do "the math"… this is the equivalent of a 75% markdown in Gap products. Doesn't Gap offer similar discounts to spur selling? ** Read the coupon, it expires 11/19 - BEFORE the Christmas selling season heats up and when Gap is normally slow. It is doubtful any other marketing is going to spur this type of traffic during this period. ** In addition, for the coupon to work, the person has to spend at least $50. Considering most sales don't neatly round to $50, there is clearly some amount over $50 being sold at close to full retail price. ** Then there is the issue of coupons not being used - estimates are up to 30%, so whatever that % turns out to be, it is a 100% profit to Gap This is clearly a cost of marketing, not an “above the line” expense. Given the directly measurable marketing results and this huge response, I would bet Gap (and other large brands) would do this again and again. As a former retail analytics person, I can't see how the Gap made any money on this -- particularly if Groupon keeps 50%. Their only hope of ROI is to attract new Gap shoppers with this promotion or get people to each buy $200 worth of stuff when they come to use their $50 coupon (even then it has to be incremental to what they would have bought). As far as I can tell, someone at the Gap was given a "budget" for social media and decided to spend it without justifying its ROI!!
  • Gap promotion has broken all records on Groupon – by 5pm 300,000 Groupons had been sold – about 10/second. The web is still digesting last week’s Gap social commerce promotion that generated $11m sales in one day. Hosted on the group buy Groupon platform, the “$25 for a $50 certificate” is one of the most successful social commerce events to date. Social media significantly helped push the offer. It appeared as Twitter's "Earlybird Offers" special of the day, reaching the program's 180,000-plus followers on the micro-blogging site. Gap tweeted about the deal to its more than 30,000 followers and authored a post on Facebook for its 606,000 "likers." Groupon's effort was more laborious, as it has dedicated Twitter and Facebook accounts for each of the 85 markets targeted in the campaign. So administrators for each market authored a tweet and post - manually, one by one - in order to push the special. In addition, Groupon's 1,500 affiliates promoted the Gap offer on their sites. A sponsored, above-the-fold ad appeared on Digg as well.
  • The Target Designer Sale on Gilt starts this Friday at noon ET, and Gilt members can expect an advance look at select items from this fall’s three limited-edition designer collections before they arrive in stores. The featured designers are apparel-maker Gaby Basora, who will bring her Tucker label to Target, decoupage housewares creative John Derian and the British luxury bag brand Mulberry. Gilt, which focuses on online flash sales for premium goods, has been branching out of late to extend its exclusivity model to more mainstream consumers. It recently teemed up with Starbucks, for instance, to offer exclusive deals to My Starbucks Rewards customers. The Target initiative is another alternative digital rewards program that will give Gilt members the benefit of first-look access to Target items that typically sell out once they hit shelves.
  • YouTique - Google TV just around the corner, it’s a safe bet to think that the future of social commerce will see YouTique as a v. 0.1 of the video-based future that what was to come. he French Connection YouTique – YouTube videos with annotated buy buttons – is social commerce that is elegant in its simplicity. Imagine where this could go. A YouTique on/off button on all music videos, TV series, and movies on YouTube – that displays a YouTube buy button on gear you are interested in (based on your personal likes), all within a YouTube-integrated shopping cart. It’s product placement for the YouTube generation (plinking) – and with a digital trace to sales.
  • Smartphone owners integrated their devices into their shopping routine by using them to find deals, research products, solicit opinions from friends and family on products of interest, share information about a shopping experience with friends on a social network and, of course, buy products.
  • Smartphone owners integrated their devices into their shopping routine by using them to find deals, research products, solicit opinions from friends and family on products of interest, share information about a shopping experience with friends on a social network and, of course, buy products.
  • Smartphone owners integrated their devices into their shopping routine by using them to find deals, research products, solicit opinions from friends and family on products of interest, share information about a shopping experience with friends on a social network and, of course, buy products.
  • GAP offered 10,000 free pairs of jeans, for the first 10,000 check-ins, and 40% of all regular priced merchandise for check-ins thereafter. Individual Deals (Check-in and claim deal) Loyalty Deals (Deals for multiple check-ins) Friend Deals (Check-in together to get the deal) Charity Deals (User checks-in, business donates to charity)
  • Uniqlo - Tweet price influence. Think about using for forthcoming menus/products The idea is simple; whilst the Uniqlo site is down, site visitors see a holding page where they can set the price for 10 Uniqlo items that will go on sale on the new website. Users get to set the price by simply tweeting their favorite item – the more people who tweet, the lower the price (more than halving the initial price). It’s fun way to promote your e-commerce web revamp, and of a similar vein to the paywithatweet service; you could almost forgive Uniqlo for using flash for the social commerce holding page…
  • ShopKick is social commerce for in-store – a check-in app that rewards you (kickbucks) for just stepping in the store (inc. Macy’s, Best Buy, Sports Authority) Solves the problem of getting people into your store – if Google is for click traffic, ShopKick is for foot-traffic
  • Try with a Facebook Campaign store (a pop up shop for a campaign) - users need an incentive to purchase via these channels Facebook Campaign Stores are the future of f-commerce? They’re quick, cheap and easy to set up, they help monetize campaigns, and ultimately, because they may help solve the century-plus old problem encapsulated in the famous quote of disputed origin) origin “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”. These can be portable stores that can be embeded within blogs and other sites linking to Facebook. So set up your Facebook campaign tab/newsfeed store, set up your buywithatweet.com Twitter store, and then run a Groupon and Gilt event. You’ll have your 2010 social commerce bases covered.
  • Private flash sale clubs focusing on specific verticals and specific demographics. We also think private flash sale sites continue to represent a proven social commerce opportunity for brands (offering a VIP brand experience), retailers (online sales events)
  • Transcript

    • 1. Social Commerce Briefing
    • 2.
      • “ The Net has already disrupted the content industry, the next disruption will be commerce.”
      • The Economist, September 2010
    • 3. Today’s presentation
      • Introduction
      • Context
      • 7 Social Commerce Forces
      • What you can do today
      • Q&A
    • 4. What is social commerce?
      • Adding social features to e-commerce sites
      • Adding e-commerce functionality to social sites
      • Combination of 1 & 2
    • 5. 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.
    • 6. Today’s presentation
      • Introduction
      • Context
      • 7 Social Commerce Forces
      • What you can do today
      • Q&A
    • 7. 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
    • 8. 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/
    • 9. 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
    • 10. Today’s presentation
      • Introduction
      • Context
      • 7 Social Commerce Forces
      • What you can do today
      • Q&A
    • 11.  
    • 12. 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/
    • 13. 1. F-Commerce – Tab Stores http://www.facebook.com/dexter?sk=app_107254772673026
    • 14. 1. F-Commerce – Page Stores
    • 15. 1. F-Commerce – Wall Stores
    • 16. 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
    • 17. 2. Facebook Deals
    • 18. 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.
    • 19. 3. Facebook Connect
      • Example
      • ROI for Levis social
      • shopping.
      • 15% increase in sales
      • 50% increase in average order value
    • 20. Facebook Credits
      • Sell products on Facebook page using credits
      • Incentivise purchases
      • Reward interactions and engagement
    • 21. 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/
    • 22. 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
    • 23. 4. Group Buying
      • Example
      http://mashable.com/2010/08/19/gap-groupon/
    • 24. 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
    • 25. 5. Flash Sales / VIP Sales
      • Example
    • 26. 6. YouTube
      • Introduction
      http://www.youtube.com/t/press_statistics
    • 27. 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
    • 28. 6. YouTube
      • Example
    • 29. 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
    • 30. 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.
      Source: eMarketer – Mobile Commerce Investments to Pay Off in 2011, Jan 2011
    • 31. 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.
      Source: eMarketer – Mobile Commerce Investments to Pay Off in 2011, Jan 2011
    • 32. 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).
    • 33. Today’s presentation
      • Introduction
      • Context
      • 7 Social Commerce Forces
      • What you can do today
      • Q&A
    • 34. Deploy the LEAD approach
      • L isten
      • E xperiment
      • A pply
      • D evelop
      http://socialcommercetoday.com/where-to-start-with-social-commerce-the-lead-strategy/
    • 35. 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.
    • 36.
      • “ 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
    • 37. Social Commerce Ideas
    • 38. Drive footfall with Facebook Deals
    • 39. Drive footfall using Group Buy
    • 40. Drive footfall with mobile vouchers
    • 41. Drive footfall with haul videos
    • 42. Experiment with price points
    • 43. Share in-store experiences
    • 44. Develop engaging customer loyalty programmes
    • 45. Group buy on social platforms
    • 46. Flash sales on Facebook / Twitter
    • 47. Social shopping apps on Facebook
    • 48. Exclusives for social followers
    • 49. Promote new lines with VIP flash sales
    • 50. Gamification on product scanning
    • 51. Tom Chapman @tomchapman

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