What does social commerce hold for us in 2011? As aficionados of the Hitchhiker’s Guide to the Galaxy will attest, the evolution of things –  including civilisations – involves passing through three key stages:

‘The History of every major Galactic Civilization tends to pass through three distinct and recognizable phases, those of Survival, Inquiry and Sophistication, otherwise known as the How, Why and Where phases. For instance, the first phase is characterized by the question How can we eat? the second by the question Why do we eat? and the third by the question Where shall we have lunch?”

So in 2011, we contend we’re moving into the third phase of social commerce – “Sophistication” with Phases 1 (Survival) and 2 (Inquiry) now settled

  • Phase 1 (Survival): How do we do social commerce? A) By adding a social layer to retail or adding a retail layer to social)
  • Phase 2 (Inquiry): Why do we do social commerce? A) To increase customer lifetime value (by helping people use their social intelligence to shop smarter)
  • Phase 3 (Sophistication): Where is the future of social commerce headed? A) See below for a roundup of predictions

Facebook: Facebook as a Social Commerce Utility: “Facebook predicts a social commerce revolution” the title of a Guardian interview with Facebook PR spokesperson Sophy Silver.  It’s interesting that after feigning indifference in 2010, Facebook is now talking up itself as a social commerce utility – as it sports its shiny new $50bn valuation (with Goldman Sachs creating a “special purpose vehicle” to allow its high-net-worth clients to invest in Facebook in a new kind of IPO – where the P is private).  Here’s the official line from the horse’s mouth:

“What’s your hot tip for 2011? “

“Social is not just about sharing connections, it’s about providing different ways for people to interact and 2011 will see more and more things become social. We’ve already seen how the gaming industry has been transformed by becoming more social – whatever you think of Farmville, it’s been the game of 2010 because of the way it relies on people’s connections with their friends.

“Now TV, music and film are going the same way. 2011 is set to bring even more innovation, allowing people to share content in increasingly different ways which will integrate with their everyday lives and I’m really looking forward to trying them out myself. Social Commerce excites me – we already know how powerful recommendations from friends can be and the group shopping experience can easily be replicated through social commerce. If I like a pair of trainers on a retailer’s website then my friend can see what I want and click on the product to buy straight away, without us having to be in the same place at the same time – the potential here is huge.”

However, Ethan Beard, director of Facebook’s Developer Network points out that Facebook storefronts are really only one piece, and really a pretty small piece, of the burgeoning area of social commerce.  Facebook’s social commerce priority is not about adding a retail layer to Facebook pages, but helping retailers add a social layer to site-based e-commerce using Facebook’s open-graph powered Instant Personalization social plugins.

JWT (101 Things to Watch 2011): Automatic Check-ins, Buy-One-Give-One-Away, e-Book Sharing, F-Commerce, Group Manipulated Pricing, Moblogging, Near Field Communication, Personal Taste Graphs, Scanning Everything, Social Browsers Go Mainstream, Virtual Mirrors.  Ann Mack, director of trendspotting for JWT summarises,” f-commerce, faster fashion and temporary tattoos, top the list of 2011 trends“.

Michael Levy2011: Consumers won’t buy a product unless they feel they’ve gotten a great deal on it, and they expect a reward for spreading the word.

Paul Chaney (Social Commerce Daily/Practical Ecommerce): Five social commerce trends for 2011 – Facebook, Group Couponing, Local, Niche, Mobile

  1. Facebook will continue to dominate the social commerce scene
  2. Group coupon deal buying will either mature or die
  3. Social media will continue to become more local
  4. Social commerce will become more “niche-global”
  5. Expect a mobile commerce surge

All Things Digital (Liz Gannes): Social commerce will get…social:  Current so-called social commerce isn’t social at all: Gilt and Groupon are glorified email lists for deals driven by ads.  Only 8.3% of Groupon referrals come from social media (vs 24% from ads); traffic from social networks is down 83% in the last year. Amazon has deployed Facebook social plugins half-hidden and half-heartedly, and current Facebook stores look and feel awkward.  On the other hand, startups (Payvment, Milyoni, Alvenda) are working to make Facebook stores better, and retail sites such as Moxsie and Polyvore, and Tea Collection are using social technology to do “customer curation” for their stores – giving customers a say on inventory.  In 2011, social commerce may finally become social.

New York Times: Groupon IPO late 2011.  Having rejected a $6bn offer from Google, and negotiating another $1bn in funding, the group-buy couponing site is valued at $4.75bn, and may launch an IPO late 2011.

CMEA Venture Capital (Sumeet Jain): “It’s a matter of time—within the next five or so years—before more business will be done on Facebook than Amazon

Resource Interactive: The Future of Shopping

  • Newstream Stores
  • Mobile Loyalty Cards (Barcode Scanning Reward Program)
  • Check-in Promotions
  • Passive Geo-location (auto-check-in)
  • Virtual Fitting Room Mobile Apps
  • In-store AR Markers
  • Mobile as Digital Looking Glass
  • Google’s Image Recognition Search replaces Traditional Search

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Karen Webster (pymnts.com): Facebook, not mobile, as Fourth Retail Channel (stores, catalogues, web, Facebook) “anyone who still believes in 2010 that Facebook isn’t going directly drive a massive commerce opportunity for merchants and retailers alike on that platform will find themselves this time next year in 2011 wishing for their own Christmas miracle”

Amalia Agathou (TheNextWeb): Trends for social e-commerce in 2011: Opportunities and Challenges

  • Avoiding the Old Media Trap (social media is conversational media not broadcast media)
  • Providing a unified shopping experience
  • Privacy
  • Customer Engagement
  • Mobile Commerce (incl. Utility Apps for shopping)
  • Crowdsourcing
  • Gaming

The Huffington Post (Robert Ball): Group Buying Becomes Key To Your Business’s Social Media Strategy: Imagine a marketing campaign that is pay-for-performance and the “performance” is a sale to an actual customer. Now imagine you can actually measure the reach, frequency, conversion rate and cost of a marketing campaign precisely.  That’s Group Buying.

Mark Schaefer: The mainstreaming of Facebook Credits as the Net’s micropayment solution

Mike Fauscette (analyst at IDC): “In three to five years, 10 percent to 15 percent of total consumer spending in developed countries may go through sites such as Facebook” (BusinessWeek)

Patrick Kitano: 8 Social Commerce Trends for 2011

  1. Demand based shopping applications
  2. Identity brokering and qualification (prospect profiling/lead generation)
  3. The reduction of the sales force (disintermediation)
  4. Social Commerce conversion – the call to action returns
  5. The emergence of the pure social commerce campaign – game changing brand marketing (YouTube = TV commercial, Facebook = National media buy, College business class = Business incubator)
  6. Facebook is a defacto platform for social commerce, but it may be too massive for local socialization
  7. Globalization of social commerce (LatAm, Asia – e.g. Exclusively.in)
  8. Location based apps will drive social commerce

Ron Conway (SV Angel): Tech Mega-Trends Investment Guide (broader than social commerce, but relevant – see here for detail)

  • Social: The web is now truly social via the explosive growth and wide adoption of FaceBook, Twitter, and other social media.
  • Real-time: A corpus of time-relevant data is being created and used in new ways.
  • Location-based Services: “Check-ins” are the new ‘status message’.
  • The Urban Entrepreneur: A new field of entrepreneurs is developing where key insights are coming from founders in large cities.
  • Mobile: Mobile is deeply intertwined with real-time data.
  • Flash Sales: Online shopping experiences ranging from high-end “invite-only” clubs to mass adoption deal sites have gained rapid momentum and revenues.
  • Behavior & Transactions: In 2010-2015 we will see analog transactions and behaviors rapidly convert into real-time feeds of data and services.

Matt Rhodes (FreshNetworks): Five trends all marketers should watch in social media in 2011 (not specific to social commerce but relevant)” In 2011 we will hear much more about social business, and probably less about social media marketing”.

  1. Social media marketing budgets set to rise
  2. Location-based marketing should be about more than just vouchers
  3. The rise and rise of the social graph (AKA Facebook Open Graph)
  4. We should all be talking about value from social media (less about measuring what can be measured to demonstrating value)
  5. Social media is not just about marketing – also about public relations, customer service, insight, new product development (and sales)

Peter Leech (Social Shopping Labs): Social Commerce, Six Killer Ideas for 2011

  1. Promotional Wall Posts to Fanbase:  Measurability (High), Likelihood of Success (High), Level of Difficulty (High)
  2. Facebook Advertising:  Measurabilty (High), Likelihood of Success (Mid), Level of Difficulty (High)
  3. Facebook Promotions and Games:  Measurabilty (Mid), Likelihood of Success (High), Level of Difficulty (Mid)
  4. Facebook Co-Marketing (with companies in your category that don’t compete.
  5. Email to Drive Facebook
  6. Don’t forget Facebook Search

ClickZ Cathy Halligan: The Case for Facebook Commerce Emerges (with attractive Traffic, Conversion and Average Order Value, Facebook is becomes a viable referral channel for retail: “On November 16, the first day Beatles songs were available on iTunes, 26% of UK traffic to Apple.com came from social media, about double the amount that came from search”

Sam Decker (ClickZ): The future is Relevance (social commerce delivering relevant social content relevant that impacts real metrics (time on site, page views, participation, conversion, loyalty)

Social Media Examiner (Jay Feitlinger): “Facebook becomes the new payment processor + loyalty program of the future

  • Facebook will launch a new social plugin (ecommerce).
  • Companies will integrate the Facebook Connect ecommerce program into their websites and start leveraging Facebook Credits as their new loyalty program, as well as provide an end-to-end commerce platform.
  • Facebook supports real-world transactions connecting well over 500 million users to the consumption of pretty much anything. Facebook credits currently cost $5.00 for 50 credits, $10.00 for 100 credits and so forth, and can now even be purchased at 7-Eleven, over 20,000 CoinStar machines, Wal-Mart, Best Buy, and as of this week, my grocery store, to name a few.
  • Credits become an alternate form of currency on both transaction-based sites and brick-and-mortar stores.

BusinessNewsDaily (50 Big Ideas, Predictions and Trends for 2011 and Beyond):

  • Social shopping (communicating with your network and sharing what you find) is just going to keep growing.
  • Tracking Social Media ROI
  • Flash Sales – more aspects of this model translate into retail
  • E-commerce-social-shopping experience, built around the context of what the user is reading
  • Groupon-type services for the business industry to market content and services.
  • Virtual referrals, including customer reviews and recommendations from friends via Facebook and Twitter, will become increasingly important
  • Mobile coupons and discounts leading the mobile advertising category

Nick Grant (ZippyCart): 10 Ecommerce Trends for 2011 All Merchants Must Know (broader than social commerce, but relevant)

  1. Co-creation
  2. Mobile Commerce
  3. Social Commerce
  4. Group Buying
  5. Private Sales
  6. Virtual Goods/Currencies
  7. Online + Offline Integration
  8. Video
  9. Social Media as Customer Service Channel
  10. Push Shopping (e.g. JewelMint – subscription-based personal shopping/stylist service)

TribalCafe: Social Commerce addresses the issue of social media ROI

Carla Rover (DigiDay): Top Four Trends in Social Commerce

  • Niche Social Shopping
  • Mobile Micro-commerce
  • Social Haul Platforms
  • Content-Driven Commerce

John Battelle: The rise and rise of Groupon (hitting all the big MOLRS trends (MObile, Local, Real-time, Social) vs James Surowiecki on the rise and fall of Groupon (voucher book 2.0 – so what…)

2011 image courtesy of freeimageslive