eConsultancy has been producing reports and presentations on social commerce since 2007 – and it’s insightful stuff. So we’ve distilled their work into a top 10 list of social commerce insights and predictions.
Sources (some public, some members only) and accompanying facts are listed below.
Top 10 Social Commerce Insights (Top Takeouts)
1. Social commerce is about selling on the social web – the web that connects people not pages (nb. the ‘semantic web’ (connecting data) will offer new opportunities (see 10)).
2. The social web is evolving into a universal media and communication platform (it’s not just a new digital channel) – social commerce adds e-commerce into the social web.
3. Social commerce is part of the Recommendation Economy – What are people like me buying? What are people I aspire to be buying? What are people who I trust buying?
4. Social commerce is about customers having the means to interact with one another in order to make better buying decisions.
5. Social commerce is based on a CPA model (cost per acquisition, cost per (trans)action)), and works by boosting a) traffic (direct and indirectly), b) conversion, c) AOV and d) repurchase rates (loyalty).
6. There are 2 basic social commerce strategies – putting tills next to water-coolers, and putting water-coolers next to your till.
7. Be present where your audience is; Mostly, this is NOT on your website, so atomise your content and make yourself portable, embed-able and useful – Social commerce involves connecting products with people in a distributed, networked, real time, shopping environment.
8. A simple 10 step social media plan for online retailers: 1. Monitor, 2. Map (gap analysis between what you want to be said about you and what is said about you), 3. Nominate SM Manager, 4. Set up Twitter Account(s), 5. Set up profile on one Social Network only, 6. Set up LinkedIn company profile, 7. Blog on your site, 8. Add a forum, 9. Add ratings and reviews (and testimonials) – (NB negative reviews are positive – they validate site and product review authenticity, and provide useful feedback) 10. Measure
9. What to do after ratings and reviews? 1) Social syndication (SWYN – share with your network) 2) Social navigation (tags), 3) Store syndication (to social shopping networks and social networking sites).
10. The future of social commerce is smarter, personalized and ubiquitous: and will involve 1) Using UGC in other marketing collateral (DM, PR, ads, product development), 2) Social navigation (tag), 3) e-commerce on social media and networking sites (transactional ads (e.g. tailgate), storefront widgets, newsfeed stores etc), 4) Social utility – adding value with social services, 5) Google – which will be a determining factor in social commerce success – Google owns the start, and increasingly, the middle, even the end of the customer journey 6) personal recommendations; collaborative filtering based on input from social graph, and comparisons between product graphs: Just as we have a social graph, we also have a product graph (purchase graph/feedback graph).
Insights generated from…
- Social Media Marketing and Monetisation Ashley Friedlein July 2009
- What’s the value of “social media” for retailers online? Ashley Friedlein, June 2009
- Using social media for marketing and monetisation Ashley Friedlein May 2009
- “Social Commerce” – what next? Ashley Friedlein, Jan 2008
- Social Commerce Report 2007 (with Bazaarvoice)
- Monetizing Social Media Ashley Friedlein
- UK Social Commerce 2007 – Linus Gregoriadis
- The battle for social commerce has been won; onsite user content (ratings, reviews, testamonials) increases conversion (83.5% in case of figleaves)
- 80% of UK online retailers consider user ratings and reviews a medium or high priority (28% using them already, 52% considering it)
- Over 50% of UK online retailers consider the inclusion of UGC to their e-commerce site as either ‘extremely important’ or ‘very important’
- Online retailers cite the following as the top benefits of hosting ratings and reviews; 1) higher conversion rates, 2) improved retention and loyalty, 3) SEO benefit (traffic), 4) ideas for product development, 5) differentiation, 6) lower cost to serve, 7) reduced returns rate
- The average customer rating for a product is 4.3 stars (out of 5 stars)
- 61% of UK consumers rate customer reviews extremely or very important when making a purchase decision
- 55% of UK consumers would be more likely to buy from a site hosting customer reviews
- Figleaves.co.uk, online retailer of branded intimate apparel measured a 35.27% increase in session conversion rate when it implemented user reviews, and the look-to-book ratio (number of views per sale) improved 4 fold
- Dell has generated >$1m in sales with Twitter deal feeds