Five by Five Social Commerce

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?

1. Adding social features to e-commerce sites

2. Adding e-commerce functionality to social sites

3. 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


Introduction

Context



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-Facebookhttp://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


Introduction

Context



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 swarmhttp://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

IntroductionGroupon is the “fasting growing company ever” – growing faster than EBay, Yahoo, Facebook or Google grew – founded November 2008Only company to have been valued at more than a billion dollars faster the You TubeGroupon has a $1.3bn valuationYou Tube has yet to turn a profit, but Groupon was in the black in its first 7 monthsOn track for $500m revenue this yearhttp://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.


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.


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


Introduction

Context



Q&A

34

Deploy the LEAD approach

ListenExperimentApplyDevelophttp://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

Documents

Five by Five Social Commerce