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Future of Social Commerce Mindshare
1) Transactions directly on Facebook are unlikely to become a major opportunity for social commerce due to underwhelming consumer experiences and security concerns with purchasing on the platform. 2) Integrating the social graph across different platforms, rather than focusing on Facebook commerce, has greater potential to revolutionize e-commerce through platforms that complement existing technologies. 3) While consumers are interested in social shopping, true social commerce is more likely to come to the high street slowly by leveraging mobile technologies that bring the social graph to physical retailers and provide genuine social utilities like validating purchases or researching products with friends.
Future of Social Commerce Mindshare
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- 2. “The Future ofSocial Commerce will take place outside of social networks” 2 #MindshareSocial
- 3. _______ Transactions on Facebook itself are unlikely to become a huge opportunity 3 #MindshareSocial
- 4. The past 2years have seen a number of retailers open Facebook Stores… and then close them 4 #MindshareSocial
- 5. The consumer experiencehas been underwhelming 5 #MindshareSocial
- 6. There are realconcerns around security 10% 8% EXTREMELY SAFE How safe do you feel SOMEWHAT SAFE purchasing goods or NOT SAFE AT ALL services through 54% DON’T KNOW Facebook? 28% 6 SOURCE: CNBC May 2012 #MindshareSocial
- 7. There are realconcerns around security Hive Community Member 7 SOURCE: Mindshare / The Hive #MindshareSocial
- 8. Facebook is primarilyfor socialising “ I like separation of my things, including my social networking & what I purchase” “ I don‟t want my newsfeed transformed into some kind of “ I‟m not sure what shopping channel” the advantages are…. Why not simply use the provider sites?” 8 SOURCE: Mindshare / The Hive #MindshareSocial
- 9. Successful examples ofF-commerce generally do not have direct sales as main KPI 9 #MindshareSocial
- 10. F-commerce will attractcertain categories SMEs 10 #MindshareSocial
- 11. _______ Transactions on Facebook itself are unlikely to become a huge opportunity Integrating the social graph across platforms is a much more scalable opportunity than F-commerce 11 #MindshareSocial
- 12. 12 #MindshareSocial
- 13. Platform Integration complementsexisting technologies rather than disrupts them #MindshareSocial
- 14. Consumers exhibit anappetite for social shopping 01 Trust 02 Expertise 14 SOURCE: Mindshare / The Hive #MindshareSocial
- 15. But too manyproducts & not enough friends is seen as a problem “What are the chances of my friend & myself both wanting a new baking tray at the same time? The chances of it happening are pretty remote” 15 SOURCE: Mindshare / The Hive #MindshareSocial
- 16. Social signals willbecome multi-dimensional 1st Generation Next Wave 16 #MindshareSocial
- 17. Moving from recommendationto customisation Social Recommendation Data Social Customisation Data 17 #MindshareSocial
- 18. There are hurdles to Data control Willingness overcome to share before the Social Graph Category Specific revolutionises e-commerce 18 #MindshareSocial
- 19. _______ Transactions on Facebook itself are unlikely to become a huge opportunity Integrating the social graph across platforms is a much more scalable opportunity than F-commerce Social commerce will come to the High Street, but slowly 19 #MindshareSocial
- 20. Mobile brings thesocial graph to bricks & mortar retailers 20 #MindshareSocial
- 21. Successful services willneed to provide genuine „social utility‟ Researching at point-of-sale Solve a problem Meet a through social need social Validating a purchase decision 21 SOURCE: Mindshare / The Hive #MindshareSocial
- 22. Accessing friends‟ recommendationsat point-of-sale IBM Research prototype AR shopping app 22 #MindshareSocial
- 23. Validating a purchase Selfridges „Next-Generation‟ fitting rooms 23 #MindshareSocial
- 24. Successful services willneed to provide genuine „social utility‟ Researching at Gifting point-of-sale Solve a problem Meet a through social need social Validating a Self-affirmation purchase decision 24 SOURCE: Mindshare / The Hive #MindshareSocial
- 25. Gifting Pepsi Social Vending Machine 25 #MindshareSocial
- 26. Self-Affirmation Diesel QR Codes placed in store 26 #MindshareSocial
- 27. But there a number of Category Consumer challenges which will constrain the Technical socialisation of the High St 27 #MindshareSocial
- 28. _______ Transactions on Facebook itself are unlikely to become a huge opportunity Integrating the social graph across platforms is a much more scalable opportunity than F-commerce Social commerce will come to the High Street, but slowly The Interest Graph presents the real opportunity for social commerce 28 #MindshareSocial
- 29. What is theInterest Graph? #MindshareSocial
- 30. Content curation trendis helping to fuel the Interest Graph #MindshareSocial
- 31. Interest Graph createsexplicit „buy‟ signals Social Graph Interest Graph Who I am How I see myself Who I know What I like & want IMPLICIT EXPLICIT link to indication of what I what I’ll buy may buy #MindshareSocial
- 32. The Interest Graphis not dependent on scale of your social network #MindshareSocial
- 33. … and theInterest Graph is a big opportunity for the future Larger reach Shallow Deeper signals of signals of interest interest Smaller reach #MindshareSocial
- 34. _______ Transactions on Facebook itself are unlikely to become a huge opportunity Integrating the social graph across platforms is a much more scalable opportunity than F-commerce Social commerce will come to the High Street, but slowly The Interest Graph presents the real opportunity for social commerce 35 #MindshareSocial
- 35. How to harnessthese opportunities 36 #MindshareSocial
- 36. It is gettingharder to achieve visibility on the Facebook Newsfeed with organic posts* 16 % 3 % * SOURCE: Facebook / Mindshare / EdgerankChecker estimates of % of fans who have the opportunity to see a brand post 37 #MindshareSocial
- 37. Brands need toevolve from retention to commercial- acquisition strategies in social Retention / Protection Commercial / Acquisition social strategies social strategies + Existing customers + New customers + Social as CRM + Social for acquisition + Reinforce brand values & loyalty + Use fans to acquire new with existing customers customers + Increase spend amongst existing customers 38 #MindshareSocial
- 38. Key approaches fora more commercial / acquisition-driven social strategy Offer-driven 01 Use scarcity & exclusivity 02 Create social-referral mechanics programmes 03 Leverage social 04 Leverage interest-graph curation data for paid media Interest-driven 39 #MindshareSocial
- 39. Offer-driven 01 Scarcity and exclusivity mechanics Using fans to create desire with earned media amongst non-customers 40 #MindshareSocial
- 40. Offer-driven 02 Social referralprogrammes Customers become affiliates & can be used to acquire new customers 30% of sales via social referral #MindshareSocial
- 41. Interest -driven 03 Leveragesocial curation “Earned Media” becomes shoppable Interests turned into Shoppable-images shopping lists spread virally #MindshareSocial
- 42. Interest -driven 04 LeverageInterest Graph data for paid media Increase conversion rate by scaling up audiences using interest-data Example: Retail brand Lookalike audience based on X = interests w/ higher + propensity Interest-graph Loyalty / customer data to buy data Wider internet #MindshareSocial
- 43. Our social commerce services 44 #MindshareSocial
- 44. Retention-based services 01 Community Management o Conversation calendar, content calendar, content creation o Biddable media recommendations o Facebook EdgeRank optimisation 02 Social Engagement o PR-led campaigns, Influencer relations campaign 03 Facebook “SEO” #MindshareSocial
- 45. New acquisition-based serviceslaunching soon 01 Platform integration o Facebook API evaluation (pages, ads, apps, insight etc.) 02 Social curation 03 Interest graph data retargeting o Facebook ad exchange / Xaxis 04 Social-based referral programs #MindshareSocial
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Editor's Notes
- #2 Introduce the Future of… programmeGrounded in realityDebunking myth and puncturing hypeHousekeepingTweet #msfutureof
- #5 Vision of shopping on FB has been around for a whileSeen a series of retailers open stores … most of which are now closedWhy is that?
- #6 Part of FB’s success has been its clean simplie interfaceBut this places constraints on what is possible from a shopping experienceBy contrast retailers have spent huge sums of money & many years experience to optimise the shopping experienceCombination of this has meant that the experience of Facebook Stores has tended to be underwhelming (fewer products , clunkier interface)Retailers have tended to replicate existing e-commerce sites on FB which has ended up feeling like a weaker version of current sites
- #7 There is also evidence of consumer reticence around buying through FacebookFrom the US at time of IPO, we saw only 36% of FB users saying they feel safe at buying through FB
- #8 And from ourqual research we see a similar picture, with our community expecting FB to work harder to provide security reassuranceCould say this is comparable to early days of e-commerce…But I think there are potentially issues of trust around the Facebook brand , perhaps related to wider privacy concerns which don’t dog similar tech brands (Apple, Amazon) to the same extent
- #9 Primarily people want to want to use Facebook to socialise & interact with friends, not transact. They are broadly open to interaction with selected brands that they like, but by and large this doesn’t seem to extend to actual transactionThis is because of 1) Separation of functions2) Concern about commercial clutter3) No perceived value exchange (better places to transact)
- #10 When we look at many of the case studies of F-commerce , we see that most have objectives other than sales (ie commerce) .So for eg, the Heinz Get Well Soup campaign , which let fans send personalised cans of soup to sick friends was aboutRewarding existing fans (ie a form of CRM)Generating buzzNOT driving sales
- #11 Having highlighted the pitfalls around F-commerce, we do see that transactions directly through Facebook will provide certain categories with opportunities, namely:Small retailers who can benefit from plugging into an existing platform (Payvment) Digitally produced products such as music, games , virtual goods, etc.
- #13 Integrating the social graph across platforms has largely been driven by Facebook ConnectHere’s a short video explaining how one of the early pioneers , Levis, went about integrating the Social Graph with their e-commerce platform.
- #14 Platform integration complements current e-commerce solutions and augments the user experience rather than introducing an entirely new transactional platform.By integrating the social graph into existing e-commerce solutions, retailers have one central point of access for all e-commerce transactions, rather than a fragmented multi-channel solution.From a consumers’ point of view, it works with current shopping behaviours and doesn’t ask them to learn a new shopping behaviour
- #15 From what we’ve seen, consumers are broadly positive about the Trust – People take comfort in knowing their friends have purchased a particular product and knowing that the personal friends recommendation is more trusted than an anonymous oneExpertise – This kind of recommendation via platform integration helps cement the purchase decision, especially if the recommendation is coming form a known expert within a particular field.
- #16 But consumers point out one of the inevitable drawbacksWhich we have come to call the baking tray problemAs one of our members pointed out
- #17 This will partly be overcome by much richer social signals for retailers to work withCurrently the social graph and platform integration is driven by the ‘Like’ button, which does provide a signal of interest, although at a one dimensional emotion level.Going forward the social graph will be driven by more subtle emotion indicators, such as ‘Love’, ‘Want’, ‘Own’, etc. This will provide much richer & more subtle data for retailers to exploit & deliver more personalised experiences
- #18 So we expect to see the future application of Social Graph data to be less about1) Seeing what your friend has likedAnd more2) A customisation of the e-commerce experience based upon insights driven from your social graph
- #19 Data control – retailers are likely to be rightly nervous about ceding too much control to Facebook. Terms of engagement will take time to work outWillingness to share – I think as a society we are becoming more willing to share than ever before (& share new types of info) , but there will be large chunks of the population who will remain much less inclinedCategory – what we are prepared to share information on is getting wider over time, but clearly some product categories are going to be more ‘shareable’ than othres
- #20 A different form of platform integration , which will take longer to develop, is the integration of the Social Graph with the physical world.
- #21 The increasing ubiquity of smartphones (50% pen) allows social commerce to make the transition to the physical world, and to shopping on the High StreetGiven that 90% (ONS) of retail sales are still in the physical world this is clearly a large opportunity for socially enhanced shopping
- #22 We can learn some lessons from the slow development of F-commcerce when we think about how social commerce might work in the ‘real world’Just as Facebook Stores which fail to offer a clear (socially based) consumer benefit have tended to fail, for mobile based social commerce solutions to be succesfsul we believe there needs to be clear ‘social utility’ created. In essence, this takes 2 formsSolving an everyday shopping problem through your social connectionsFulfilling an underlying social need state while shoppingSolving a problem through Social could be Using social connections to help a research a purchase while at POSGetting validation or reassurance around a decision
- #23 Being able to access friends’ recommendations at point of sale has potentially strong social utilityThis is a pic of a prototype app recently developed for retailers by IBM research which would as well as allowing the user to access product information , could pulll in likes, recommendations , reviews from a user’s social graphLiikely to be of more use for higher end purchases or leisure / entertainment categories
- #24 When shoppers are closer to a purchase decision there is the clear opportunity for social to help confirm or validate an imminent decision This is an idea that has been trialled by a number of retailers, allowing shoppers to share pictures of themselves trying on an item of clothing to their social circle , to get a response on whether to buy or notThis example comes from Selfridges Next Generation Fitting Rooms which were launched at London Fashion Week earlier this year
- #25 We can also see how mobile social commerce solutions can tap into our underlying need to be social and connected to our friends & family. This could be aboutGifting – allowing consumers to give directly to their friends at POSOr, the need to make a statement about your self to your social circle – self-affirmation
- #26 This idea from Pepsi allowed users to send voucher codes to their friends’ mobiles direct from the vending machine
- #27 A great example of self-affirmation in action are the physical ‘like’ buttons that have started to emerge. This particular example from Diesel used QR codes to allow shoppers to effectively demonstrate their own coolness by liking one of Diesels products in store.
- #28 So if mobile social commerce applications can demonstrate social utility , there is great potential for social commerce developing on the High StreetBut there are a number of challenges which are likely to make it a slow journeyCategory – Fundamentally , mobile social commerce is going to better suited t o categories that are inherently more social , ie Fashion , eating / drinking out, entertainment NOT groceryTechnical – Its harder to integrate the digital with the physical than the digital with digital . So platform integration within e-commerce platforms is likely to develop more quickly than the AR ytpe applications we have seenConsumer - we need to acknowledge that using the smartphone in this way requires a bigger change in consumer behaviour than just logging into a site with FB Connect and continuing to buy online as before (only 6% are using price comparison at POS atm)
- #30 The Social Graph is based on an individual’s personal connections to people he or she knows.The Interest Graph is built on connections between people built upon shared interests or passions.Social Graph = Friends / acquaintancesInterest Graph = Strangers
- #31 The Interest Graph is being fuelled by a growing need for content curation, using social tools to:Manage the deluge of information to keep up with their interestsDeclare our deepest interests by collecting, or ‘curating’, things & stories that are most important to usThis has supported the development of both :Generic platforms (Twitter, Tumblr, Pinterest)Specific & controlled communities of interest (eg Lady Gaga’s Little Monsters, Beauty Talks)
- #32 Why is the Interest Graph so important for Social Commerce?1) It gives a much better indication to retailers and brands of what you’re likely to buyKnowing what someone is interested in is a much stronger indication of what they are likely to want to buy, than knowing who they are connected to Knowing who someone is connected to , is a weak signal of what they are likely to buy but not nearly as explicit
- #33 Why is thisimportant for social commerce?2) It is not so dependent on scale as the Social GraphIf you have relatively few friends or a browsing a relatively niche product category, then your Social Graph may have little scope for helping with your purchase, whereas if your interest graph indicates you are into that particular area the retailer can tailor your experienceSo for eg, a person may decide they want a new bike and visit Evans Cycles websiteIf none of their Social Graph has liked or interacted with a product on the site there may be little the retailer can do to influence the journeyIf on the other hand, the retailer pulls in that person’s Interest Graph data and knows that they curate a Pinterest board on BMXes, they can tailor the product offering accordingly.That opportunity is not scale dependent, so is there irrespective of how niche the product category is or how limited or irrelevant that person’s Social Graph may be
- #34 1. Every platform wants to be in the Top right quadrant – where Social scale meets the deeper Interest graph. No one particular platform is there yet, which is why no brand has quite achieved it.2. Twitter – is developing its platform to help create stronger signals within the Interest graph – through Apps a2. nd Cards3. Facebook – always allowed developers to use it’s users data, including allowing the creation of new Verbs – Listening to, Wants, is watching… giving more opportunity for commerce4. Tumblr / Pinterest / Instagram – using Facebook’s integration & scale to leverage their own platforms5. Niche communities – Beauty talk and Chef Hangout, using other network’s functions to create their own business models- based on INTERESTS
- #35 Importantly all this allows brands to make earned media actually shoppableMadeByNikeTumblr blog storeAgain, playing to the trend of social curation, Nike identified that Tumblr users like to ‘re-tumble’ stylish, well produced images to their own Tumblr blogs – spreading content virally. Rather cleverly, Nike made those images shoppable by connecting their Tumblr images to e-commerce. They also ran a number of exclusive ranges on the blog, further inviting users to share the shoppable content
- #37 Excluding reviews / forumsBased on people you have a social connection with N
- #38 Facebook’s ‘edgerank’ algorithm is making branded earned media less and less visible in users’ newsfeeds (need stat here). This means that brands are finding less and less value in simply building fan pages and hoping that the earned media coverage gained off the back of distributing content to their existingcustomers will drive awareness or response amongst non-customers.
- #39 The time has come for brands to evolve from being primarily focused on retention/protective-focused marketing strategies using social media, to more commercial-acquisition-focused marketing strategies in social media. Retention/protective social strategies – a summaryWhat is it: get existing brand advocates to sign up to fan pages on social networks, and reward them by sending them info on products & offers. Doesn’t really help to acquire new customers. Benefits: Once people are members of these fan groups, the groups become a replacement for traditional CRM and can help to improve existing advocates’ loyalty towards the brand by reinforcing the brand’s values to them in a social context.Value of a fan in a retention-based social strategy contextAs you would expect, fans tend to be worth more than non-fans, and are more brand-loyal:-$136 extra per fan per year (Syncapse 2010, 20 global brands)27% increase in brand loyalty (Syncapse 2010, research across 20 brands)Commercial-acquisition social strategies – a summaryWhat is it: leverage social platforms & social media to a) use existing brand advocates to acquire/refer new customers at scale, b) leverage shareable media to acquire new customers, c) increase spending of existing customers/fans.Benefits: Social platform technology enables new business models and new forms of shoppable earned media.Value of new social business models: xxxx
- #40 Key tactics for brands to take more of a commercially-focused approach in socialMindshare believes that if brands want to use social marketing to drive commercial acquisition objectives it is crucial to capitalise on the new opportunities around platform integration & the interest graph
- #41 Use scarcity & exclusivity mechanics to drive sales in a social environmentASOS Virtual Facebook Queue. ASOS was exploring ways of increasing revenue from its summer sale, in June 2011 on ASOS.com. The company had never pre-promoted its sales before and wanted to find a way to generate excitement and hype to drive uplift in their sale. Users had to ‘like’ the virtual queue app in Facebook to join the pre-sales queue, which created significant organic coverage. Games within the app created further organic coverage – eg ‘confessions of a queue-jumper’ which encouraged users to post what they would do to move up the queue, on the ASOS Facebook wall. Paid media was used to promote the queue app and to amplify subsequent interactions. Depending on the time that you joined the queue you received different levels of access to the sale.Results: 174,000 joined the queue via the app426,000 plays of the in-app games32,000 campaign-related tweets 715,000 invitations were shared to join the app – effectively communicating with NEW CUSTOMERSOver 1m organic impressions per day at the peak of the campaign, generating 67,000 clicks to ASOSASOS had their biggest ever sales day during the campaignMedia spend – only £10,000Heinz – Get Well SoupHeinz wanted to allow their Facebook fans to create exclusive, personalised cans of soup to send to non-fans, via the Facebook platform. The messages of goodwill helped to improve the perception of Heinz Soup amongst non-customers, and Heinz also generated a small revenue stream by charging a small fee. By using an app and also paid media to amplify the interactions with the app, the brand managed to generate additional organic earned media which further spread their positive brand message to non-customers.
- #42 Create ‘social referral programmes’ or ‘acquisition focused social CRM programmes’ where the shopper becomes an affiliate.Retailer/brand-controlled social referral programmes, egTesco ‘share and earn’ Existing customers of Tesco Direct can earn Clubcard points if their friends buy Tesco Direct products they have officially flagged into the programme via a ‘like’Fab.com –This designer retailer has built its entire e-commerce platform on the Facebook Open Graph. Fab rewards shoppers who refer their friends by the Facebook social-graph, and also rewards you if you share products to your Friendswhich they go on to buy.
- #43 Tap into the ‘social curation’ trend by makingcuratableearned media shoppable to drive sales as well as driving earned coverageZapposPinterest appUsing the Pinterest open API, Zappos have created a utility app which allows users to scan Pinterest boards that they are interested in and return Zappos products which are of a similar style/colour/texture/shape as the items displayed on the Pinterest board. Effectively this turns earned media into shopping lists for real products inspired by the earned media. This is an early example of leveraging social curation for commercial goals but shows the way for the future.MadeByNikeTumblr blog storeAgain, playing to the trend of social curation, Nike identified that Tumblr users like to ‘re-tumble’ stylish, well produced images to their own Tumblr blogs – spreading content virally. Rather cleverly, Nike made those images shoppable by connecting their Tumblr images to e-commerce. They also ran a number of exclusive ranges on the blog, further inviting users to share the shoppable content
- #44 Use interest-data to increase likelyconversion of paid media into sales. Maximise the audience of people who are most likely to buy, by fusing social interest data with loyalty scheme data. By analysing the interests of existing customers it is possible to target other users who display similar interests – creating a larger targeting segment who have a higher propensity to purchase.Data on likelihood to purchase comes from actual purchase/loyalty scheme data. Lookalike audiences are created using the interests of these actual customers.Furthermore – because GroupM/Mindshare have exclusive access to Facebook’s ad exchange via our DSP (Xaxis)this means we can deliver ads to our scaled-up interests-based audience in to Facebook, as well as the wider internet.
- #45 Excluding reviews / forumsBased on people you have a social connection with N
- #48 Introduce the Future of… programmeGrounded in realityDebunking myth and puncturing hypeHousekeepingTweet #msfutureof