Table 1: Sachoff M., 2009a. Facebook Most Popular Social Site in the U.K: Age profile ranked by category visitors. WebProNews [online news magazine and blog] 20th July. Available at: <http://www.webpronews.com/facebook-most-popular-social-site-in-the-uk-2009-07> [Accessed on 29/07/2011]. Table 2: Sachoff M., 2009b. Top 10 Social Networking sites ranked by total UK unique visitors. WebProNews [online news magazine and blog] 20th July. Available at: <http://www.webpronews.com/facebook-most-popular-social-site-in-the-uk-2009-07> [Accessed on 29/07/2011].
Zazzle is an online retailer that allows users to upload images and create their own merchandise (clothing, posters, etc.), or buy merchandise created by other users, as well as use images from participating companies.
As a result, it can be considered that social networking sites are fully integrated into the social lives of users with plenty of facilities to gain access to accounts such as smartphones, wireless broadband and smart TVs.
An investigation of why SocialNetworking sites go E-Commerce Vidoushi D. Bahadur-Somrah MSc Information Systems with Management Studies Supervisor: Mary Thomson KINGSTON UNIVERSITY Faculty of Computing, Information Systems & Mathematics
Reasons for conducting this investigationTo gain an in-depth understanding of: What is Social Commerce (S-Commerce). The reasons behind the merge between E-Commerce & Social Networking. The psychology of online shoppers compared to high-street shoppers. The marketing techniques & cost(s) of implementing S-Commerce by retailers...and How will the new S-Commerce shopping experience benefit both retailers & customers.
Reasons for conducting this investigationand to back the research findings from the points mentioned above by: Launching a survey questionnaire (online & offline) based on Social Networking, shopping habits and S-Commerce experience. Analysing the results collected once converted into useable formats Discussing the results collected & being able to make comparisons, recommendations & conclusions
So what is Social Commerce? Definition:‘SocialCommerceToday’ Blog defines it is a subset of E-Commerce that involvesusing social media, online media that supports social interaction and usercontributions, to assist in the online buying and selling of products and services. Let’s have a look at how it evolved: Mobile technology Mobile Internet Commerce S-Commerce (1990s) accessible from theTraditional Electronic Internet &Commerce Commerce Mobiles Social Commerce Social Media
Examples of E-Commerce & Social Media IntegrationSocial Networking E-CommerceFacebook ASOS ClothingMySpace DoveTwitter Delta AirlinesLinkedIn 1-800 flowers.comBeboHi5Friendster These retailers have fully integrated S-Commerce platforms available already
Why are retailers targeting Social Networking platforms?Let us look at the facts & figures of Social Networking: Facebook: 750 million active users + 700 billion minutes spent monthly! Dec 09: A significant increase of 82% in the amount of time spent on Social Network sites such as Facebook, Twitter, MySpace etc compared to 2008. Online users spent an average of 6 hours each month on Facebook alone compared to just over 3 hours in 2008 on Facebook and Twitter combined. May 09: almost 80% of all age groups visited a social site & represents an avg. time of 4.6 hours/visit. 67% of people age 55+ spend almost 3.7 hours/sites. May 08 - 09: shows an increase of 7% in the total UK internet audience on social sites. Facebook announce profits of $500m (£300m +) in first half of 2011
comScore World Metrix for 2008 & 2009UK figures of Social Networking: Table 1: UK age group visitors visit Table 2: UK Social Networking sites visit
Psychology of online shoppers compared to high-street shoppersThere are 3 types of shoppers: Vague shopper – Need others opinion/feedback before making a purchase Cost conscious shopper – Want to get the best value for money Window shopper – Browse but never or rarely buysThe psychology of both online shoppers & high-street shoppers appears to be similar.Issues that retailers face with the above shoppers are: Shopping baskets are abandoned & payment not completed at the last minute Hours are spent browsing products but no purchase is made. Shopping basket is used as a wish-list without any intention to buy. No sales are made if feedbacks have not yet been left on the product. Shoppers buy solely on price and do not consider after sales benefits, warranties or customer service quality.
So how can retailers influence these types of shoppers to buyEvery individual is influenced by the following: Normative influence - Influenced by the desire to be liked by others. Informational influence - Influenced by the facts, figures, information available, information provided by expert shoppers and the desire to be correct. Combination of normative and informational influence Group and collective influence – Influenced by the majority’s choice in a group
So how can retailers influence these types of shoppers to buyRetailers have used the power of influence factors above and made use of the new S-Commerce platform to overcome this issue in such manner: Use Social Networking sites to bring shoppers with common interest together. Use the possibility to leave comments such as feedbacks, reviews and opinions on Social Networking sites. Make shoppers feel part of a community or group. Use the word-of-mouth concept and interaction between online users as a brand promotion and an advertising benefit. Use the info from customers reviews and feedbacks to improve services and products.
Marketing techniques available within S-Commerce SCRM Social Word-Of- Shopping Mouth Social Commerce Open-Source Viral Customer-to- Customer
Marketing techniques available within S-CommerceSCRM: Close engagement between customers and retailers to provide a long-term relationship based on trust and brand loyalty.Word-of-Mouth: Sharing of personal opinion or recommendation of one userto others.Social Shopping: Informed shopping from Social Networking sites based onreviews, feedbacks or recommendations made by friends, family or contacts.Customer-to-Customer: Platform which permits a transaction from onecustomer directly to another, e.g. eBay.Open-Source: Platform where online users can discuss and share their ideason products or services among each other freely and anytime.Viral: Mass advertising by using email footers, spam, or ads.
Smart S-Commerce decision-making process - ‘CEPEA’ Improved customer decision journey with S-Commerce platform
Cost of implementing S-Commerce by retailers e.g., Facebook Facebook has 6 third-party applications where retailers can incorporate their E- Commerce store & have the S-Commerce retail platform. The costs to retailers to apply these apps are:1. Voiyk – Free for 1st month & $69 per year after that (no per-item fees, transaction fees or extra charges)2. ShopTap – Flat monthly fee (start from $10 for up to 500 products)3. Sortprice - $149 monthly fee for up to 1,000 products to $ 400 monthly for up to 50,000 products (free store app – existing customers).4. Shoutlet – Enterprise-level companies annual fee is as high as $ 50,000 and smaller retailers: yearly fee from $ 5,000 to $10,000.5. My Merch Store – Provides retailers who are ‘Zazzle’ customers to input their products on Facebook and share them with friends.6. LetMeIntroduce – 50 cents every time coupon code gets accessed by customers.
Survey Questionnaire & Results Analysis Online Survey – 27 questions total Offline survey – Informal interviews was conducted at home, workplace and shopping malls. 77 respondents recorded over 2 weeks duration. 52 respondents from online source and 25 respondents from informal interview source. Survey launched on Google Documents site (free) Survey questions based on ‘Social Networking experience’, ‘Shopping habits ‘ and ‘Social Commerce understanding and views’
Results on Social Networking experienceResults on which Social Network sites participants are registered with: Facebook most popular with 74 out of a total 77 participants with an account (96%). Twitter and LinkedIn came in 2nd and 3rd position with 26% and 25% responses respectively.
How many times users tend to check their Average duration of each session users tendaccounts daily: to spend on their social sites (daily basis): 29% check between 5 & 10 times daily 66% of participants spend less than 30 21% check more than 10 times a day minutes per session Other - described their social 35% - less than 10 minutes networking site being always online via 14% - between 30 & 60 minutes their smartphones and mobile data plan 16 % - More than 60 minutes Other (4%) – Always online via their smartphones & the session never ends
Responses on the usage on the ‘like’ button A combined results of 94% of participants use the ‘like’ button at some point. 51% - often use the ‘Like’ button 12% - always making use of the feature. 31 % - rarely use this feature
Results on shopping habitsNumber of times participants shop on a Number of items purchased on a monthly basismonthly basis: by the participants: 70% - shop 5 times or less each month. 66% - purchase 50 or less items monthly & 12% - shop between 5 & 10 times 20% revealed that they purchase more than 100 items monthly. 13% - shop 10 times or more Amazingly no participants said ‘Never’ Participants further stated that: Unknown – ‘shopaholic ‘ , depends on mood, every week or unlimited 35% - normally shop online Types of products participants buy online: Electrical – 51 % Food – 15 % Clothing – 42 % Everything – 43 %
65 % stated that shopping online offer An insight on the type of information thatbetter value compared to high street participants share among social networkersretailers. are: Gossip - 29%Participants further described the benefits: Daily news – 34% Money saving – 74 % Pictures / photos - 77% Time saving – 78 % Fashion news - 16% Wider choice – 48 % Chat - 73 % Convenience – 67 % Comments - 60% Other – 4 % Other - 4 %
25 participants (32 %) claimed they do share their shopping experiences on their networksite(s).The combined result (32 %) was split as follows: 14 % - Often 8% - Always 10% - Rarely 61 participants (79 %) states that they prefer to have feedback/reviews before conducting any purchase of product.
Results on Social Commerce knowledge 39 % - gave a correct description of S- Commerce 23% - have used Social Commerce on Facebook before 62% - were aware of retailers’ presence on social sites 55% - keen to shop & share their shopping experiences within the new platform. 61% - were keen to share /gain knowledge on their friends’ product preferences on their network. 55% - say that they would like to get the latest updates on deals and promotional savings.
Success Stories of S-CommerceCompanies Successful Stories Groupon $11 Million in one day sales for GAP Spinback $2.10 average incremental revenues from each Facebook wall post + an impressive 10.9 % conversion rate on Facebook shares . Pampers Pampers sold 1,000 Diapers in 1 hour on its Facebook store.Baby & me 50% of online sales come from Facebook Spinback 10.9% - Conversion rate for Facebook shares that leads to a purchase.Livingsocial 42,000 + Facebook shares in 1-day for the $20 Amazon voucher. Ticketfly 3.25 average sales generated through Facebook shares. F&F £2 million + Generated in sales with Facebook vouchers
Benefits of S-Commerce for shoppers Informed purchases Single log- Reviews / in feedbacks Group-buy, promotional vouchers, latest Social Commerce Info deals Sharing Transparency Recommendation Feel part of a community
Benefits of S-Commerce for retailers Target vast Gain insight on audience at popular one location products Ability to act on Increased negative productdemand, sales reviews and re- and profits Social gain customers Commerce trust Obtain product- shopper data and Use the word-of-use it for marketing Closer mouth referral to and business customer- increase demand decisions retailer & profit relationship
DiscussionsThe following sections have been investigated in depth in the dissertation report: Evaluation of the Social Commerce concept with its advantages as well as disadvantages identified from the survey results. Discussion of survey results including problems encountered from some responses and a comparison of the results obtained against other researchers’ work. Short or long term impact(s) on High-Street retailers. Security issue on social sites. If Social Networking websites become payable to shoppers. Language translation facility within S-Commerce for non-English speaking or writing social shopping users within the community of S-Commerce.
Some recommendations to enhance the S-Commerce platform Implementation of Loyalty Schemes to provide further discounts, free gifts, vouchers, bonus points, social credit rewards etc to boost S-Commerce. A transparent logistic view on their purchased product(s) via an Electronic Data Interchange (EDI). Improved News Feeds for Social Shoppers to enhance advertising.