Social Commerce

DEVASHISH

Definition:~

Social commerce is a subset of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services.

Evolution of S-Commerce:~

• Started with social networking sites such as facebook, twitter, etc.

• Facebook commerce (f-commerce) has become popular.

• Collaboration amongst customers, suppliers and retailers.

• Retailers are looking at having their own Facebook page.

• Consumers can take buying and purchase decisions.

• Creation of virtual marketplace with social shopping websites.

Evolution of S-Commerce :~(contd…)

TraditionalCommerce Electronic

Commerce

Mobile TechnologyInternet(1990’s)

Social Media

MobileCommerce

SocialCommerce

S-Commerceaccessible from theInternet & Mobiles

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.

How can retailers influence shoppers to buy??

Retailers have used 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:~

Social Comm

erce

Marketing techniques available within S-Commerce:~

SCRM: 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 user to others.

Social Shopping: Informed shopping from Social Networking sites based on reviews, feedbacks or recommendations made by friends, family or contacts.

Customer-to-Customer: Platform which permits a transaction from one customer directly to another, e.g. eBay.

Open-Source: Platform where online users can discuss and share their ideas on products or services among each other freely and anytime.

Viral: Mass advertising by using email footers, spam, or ads.

Features of Social Commerce:~

• Ratings and reviews for the products and services by users• Recommendation technology features• Get product recommendations based on their own interests or

preferences• Customers likely to check online for reviews prior to making a purchase• Networked users generate new ideas, advertise, and create added value

at virtually no cost• Facebook ‘Like’ Button on the product’s web page• Better Understanding of the Consumer’s behaviour• Instant Personalization of the user experience• Brand Growth

6 C’s of Social Commerce :~

• Content – The basic need to engage with customers, prospects and stakeholders through valuable published content on the web.

• Community – Treating the audience as a community with the objective of building sustainable relationships by providing tangible value. Early incarnations of Community were mobilized through registration and engaged via email programs, this evolved into online forums, chat-rooms and membership groups where users were able to interact with each other.

• Commerce – Being able to fulfill customers' needs via a transactional web presence, typically online retailers, banks, insurance companies, travel sales sites provide the most useful business-to-consumer services.

• Context – The online world is able to track real-world events and this is primarily being enabled by mobile devices.

• Connection – The new online networks are defining and documenting the relationships between people – these relationships may originate in the physical world or online.

• Conversation –A conversation between two parties will likely surface a need that could be fulfilled, thus providing a potential market for supplier organizations.

7 Species of Social Commerce :~

• Social Network Driven Sales : Facebook commerce and Twitter commerce belong to this part. Sales take place on established social network sites.

• Peer-to-peer sales platforms(eBay, Etsy, Amazon) : In these websites, users can directly communicate and sell products to other users.

• Group buying(Groupon, LivingSocial) - Users can buy products or services at a lower price when enough users agree to make this purchase.

• Peer recommendations(Amazon, Yelp, JustBought) - Users can see recommendations from other users.

• User-curated shopping(The Fancy, Lyst, Svpply) - Users create and share lists of products and services for others to shop from.

• Participatory commerce(Threadless, Kickstarter, CutOnYourBias) - Users can get involved in the production process.

• Social shopping(Motilo, Fashism, GoTryItOn) - Sites provide chat sessions for users so they can communicate with their friends or other users for some advice.

Benefits of S-Commerce for shoppers:~

Social Commerce

Informed purchases

Reviews /Feedbacks

Info Sharing

Recommendation

Feel part of a community

Transparency

Group-buy, promotional

vouchers, latest deals

Single log-in

Benefits of S-Commerce for retailers:~

Social Commerce

Target vast audience at one location

Gain insight on popular products

Ability to act on negative

product reviews and

re-gain customers

trust

Use the word-of-mouth

referral to increase

demand & profit

Obtain product-shopper

data and use it for

marketing and business

decisions

Closer customer-

retailer relationship

Increased demand, sales and

profits

Trends and the challenges of Social Commerce:~

Moving Away from the Traditional Media Offering a United Shopping Experience Privacy Customer Engagement Facebook’s security issue Tools for social commerce change rapidly Hidden soft costs Building a strong relationship with the customer takes time Customers can express their disappointment and negatively impact a

brand’s reputation Usability testing is complex and requires advance skills Need domain knowledge to have effective data analytics

Companies 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

Examples of E-Commerce & Social Media Integration:~

Social Networking

Facebook

MySpace

Twitter

LinkedIn

Bebo

Hi5

Friendster

E-Commerce

ASOS Clothing

Dove

Delta Airlines

1-800 flowers.com

These retailers have fully integrated S-Commerce platforms available already