Social Commerce Trends Report
Key takeaways from Social Commerce Summit 2010
April 19-21, 2010
Each year, the Social Commerce Summit brings together innovative brands and thought leaders to share best practices and trends in social media. At the 2010 event held in Austin, Texas, Mitch Joel, author of Six Pixels of Separation, explained that social media is the first and only real medium where users create their own experiences. It’s the first channel where brands have to force themselves in, because users are in control, so they must “invite” them in; “my” Twitter experience is different from “your” Twitter experience. Mitch is excited because marketing is finally back to being about real interactions between real people. While companies are still in control of their brand, the amplified consumer voice is equal to the brand’s voice.
forced or “branded” way. Douglas Rushkoff, author of Get Back In the Box, first coined the term “viral media,” which was meant as a type of media or message that evolves naturally, is invited in by users, and replicates just like any type of information a user wants to share. It’s called “viral” because, like a virus, it feels natural, like it’s a part of the eco-system, and replicates as part of the natural system of sharing. A virus gets invited into the body because it looks and acts like a normal cell, then it replicates just like a normal cell. Today, consumers use social media in many ways, including making a variety of purchasing decisions – from buying clothing and electronics to selecting insurance or a new bank. This paper uncovers the trends from this conference and includes insights from some of the thought leaders who attended.
The customer voice is a form of viral media, meaning that it evolves naturally – not in a
TRENDS REPORT
Contents Most social commerce begins with experimentation.............................................................................3 Consumers are closer than ever to the people who actually create the products they buy and use...................................................................................................4 ROI varies, but it must always be measured..........................................................................................5 Social commerce can – and should – spread throughout the entire business and across all channels...........................................................................................6 Search informs much of how people shop online..................................................................................6 Digital Millennials are changing shopping..............................................................................................8 To be successful, make the most of your unique influencers................................................................9 The potential downfall of social media? Privacy..................................................................................11 What will social commerce look like in a year?...................................................................................11 Your next steps.....................................................................................................................................11 Sources and contact information.........................................................................................................12
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Most social commerce begins with experimentation. Bazaarvoice CMO Sam Decker encourages organizations to “Be the conversation. Your brand and the products you sell are a reflection of the conversations that are happening out there.” He outlines three roles companies should take to facilitate conversations and use them to improve products. Be like a parent. Parents have commitment, perspective and give guidance. Try new things, learn, and realize that today is just one step in your evolution. Look at results as a moment in time. Focus on gathering data and content from your users. Be a good host. Make it easy for your “guests” (consumers) to share their opinions and meet others like them. Keep them engaged, which will bring more people to the “party” (your site). When you facilitate conversations online, you’ll help people make good purchase decisions, creating an asset that builds over time. This is different than what most traditional marketing does; you’re engaging people to help themselves and others. Be a prospector. Look for gold. Start with the basic, business-driving metrics such as number of site visits driven by user-generated content, sales conversion, and average order value. Then use customer participation to go beyond your site – ask for customer stories via Facebook, or put ratings information on in-store fact tags. Spread this content to shoppers wherever they are, to help them regardless of where and how they shop. This is where true transformation occurs – beyond the walls of your online community.
Bazaarvoice CMO Sam Decker advises brands to be good parents, hosts and prospectors. Social commerce evolves, according to Manish Mehta, VP Social Media and Community for Dell. He suggests there are five phases of social commerce evolution. Experiment. The social web originally began as an experiment. Product. Soon, products were created to facilitate social media, such as MySpace, bulletin boards, forums, and more. Application. Companies such as Dell attached “social” to their products by adding customer reviews to products at dell.com. They were able to measure increases in sales and other metrics with this application of social media, so they continued to build out social communications throughout their business Build-out. Once Dell gathered reviews, they shared them with other divisions to improve customer service and product development. Connect and scale. Today, Dell and other brands work to connect all their social inputs, wherever consumers want to participate. They combine all inputs to build relationships and commerce, gain further insights, and understand the entire customer experience.
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In a similar way, golf and tennis retailer Golfsmith learned a lot on its journey into social media. When they launched their Facebook fan page in 2008, they didn’t focus on selling; their page began as more of a brand and customer service play. When they responded to customer complaints on Facebook, Golfsmith learned that those customers were more likely to come back to Golfsmith.com. Today they use Facebook and Twitter for customer feedback. For example, in 2009 they asked customers to vote for their favorite designs for holiday gift cards, and they have also asked customers if they would use a mobile application, to help Golfsmith determine if they should create one. And experimentation goes beyond the internet. Google’s Sameer Samat noted that brands should also experiment with mobile to let consumers search for and find specific information, whether they’re in a store or on the road. Google has seen an exponential jump in Google shopping queries from mobile devices.
Consumers are closer than ever to the people who actually create the products they buy and use. “Technology, media and branding create a problem for people who want to make companies better; they distance companies from real consumers,” said Douglas Rushkoff, “and the mythology of a brand means that products don’t have to be as good as they used to be. In social commerce, where consumers can share their experiences directly with other consumers – without the mythology
of branding between them – consumers must be close to the products and the people actually creating products. With the use of the Internet today, those who produce products don’t have to be huge corporations; they can use social commerce to get input from, buy from, and sell to others. Rushkoff points out that social media promotes honesty and peer-to-peer communication, letting users exchange products, goods and services – and opinions – directly amongst themselves. This actually takes us back to the times of the real bazaar – where trade and commerce were done face to face, among individual people – not between faceless corporations and consumers. “Social media speaks to the geeks,” he says. “We know Google has the smartest, craziest people working for them because their social media strategy shows us the geeks at the middle. Social media is a shift from technology and media that separate you from consumers – social media brings you closer to the people who actually use your products.” Rushkoff advises keeping the people who create products close to the people who use them. Marketers have to embrace and encourage their true believers – far beyond just people who recommend your products. These must be true believers of your culture – not your “brand” culture but your actual culture. For example, when Urban Outfitters customers ask questions about specific products online, often the product designer will respond directly to the question. In addition, team members from Best Buy and Dell both said that they refer to customer reviews when developing new products or improving existing ones.
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ROI varies, but it must always be measured. Just because social media is a new way of communicating doesn’t mean it shouldn’t be measured. Like any promotional or marketing tactic, objectives must be set and tracked – and they should ultimately track to bottom line company goals. Golfsmith tracks hard impact (dollars) and soft impact (things like branding, staying top of mind, which are harder to track) to determine which social media they continue to pursue. For example, they track all links from Facebook and Twitter and look at customer interactions on their site. To effectively track soft impact, they developed a score card which measures trends for traffic, sales, likes, posts, customer services, mentions, retweets and more across all their social networks. Golfsmith recommends that brands tag all links to user-generated content to understand how people who read or contribute user-generated content interact with the site. For example, Golfsmith found that those who interacted with customer ratings had 11% higher revenue per person, a 2% increase in AOV and a 9% increase in conversion. The most interesting finding was that a full 18% of all Golfsmith visitors interacted with customer Q&A or reviews between January and April 2010. Douglas Rushkoff contends that the goal of social media isn’t sales; it’s meant to build the culture of your industry. It can start with the culture in your company and extend to the culture of your customer, your shareholders, your partners, and your competitors. But, ultimately, it’s the culture of the thing you do. The new organizational chart for a genuinely social organization puts the most competent
Get Back in the Box author Douglas Rushkoff says product creators must stay close to product users. people – those who design and create the products – in the middle, but still close to the customer. Ideally, every employee in the company stays very close to the customer. Seth Greenberg from Intuit adds, “Give up the idea that it’s not about the money. It is about the money. People are talking about you online – it’s happening whether you’re involved or not; it’s okay to set goals, set a bar.” Manish Mehta from Dell advises companies not to get head-faked by “shiny objects.” Keep your eyes on what’s important to your business, and make decisions from this point. He also reminds brands to stay open to different types of ROI. The ultimate challenge in social media involves putting a value on relationships, networks and connections.
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Google’s Sameer Samat encourages brands to think beyond their sites.
Social commerce can – and should – spread throughout the entire business and across all channels. Social media is unique because anyone can participate – much different than traditional advertising. For example, Golfsmith gets their entire organization involved in social media. They display their entire Twitter feed in their offices, so anyone can see what people are saying about Golfsmith at any time, and the appropriate people jump in to help customers in need. Golfsmith also uses customer reviews and ratings in all types of marketing, and they have looked at customer support questions before and after the launch of their online Q&A solution to understand how online questions and answers can help them reduce customer support calls. They also look for new ways to connect their social networks; today Golfsmith’s Facebook page helps people engage, then directs them to Golfsmith.com to make purchases. Google’s Sameer Samat recommends that brands leverage the entire shopping ecosystem – multiply the value of all content — by making it available beyond the organization’s site. For example, Google Product Reviews Program is the first program that lets online brands use their full review
content to directly impact natural search, mobile, and Google advertising results. Brands can expose star ratings to searchers, put their logos next to their reviews, and link directly back to the product page where a searcher can buy. This lets the consumer reviews gathered on the site help consumers who are still just searching for products. Manish Mehta from Dell suggests that companies embed “social” in every function of the organization, from sales to product development. Embed social information and culture across the fabric of your business; it shouldn’t just be about sales and marketing – get your products, support, and human resources teams to think socially and transparently, too.
Search informs much of how people shop online. More and more of today’s shoppers begin with search – most of them with Google. 87% of internet users have used the internet to browse research and compare products in the last year (eMarketer Report, March 2010). 45% of in store purchases are influenced by online research (Forrester 2009). Sameer Samat, Director of Product Management for Google, highlighted three industry trends that drive Google’s strategy: online-to-store shopping, mobile, and social.
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Many people are first researching online, then going to a physical store to make purchases. Retailers should think cross-channel; consumers will interact with any channel they want, when they want. Many retailers have divided brick-and-mortar and online responsibilities within their organizations, which contradicts this trend. The linear shopping trend is being shifted; consumers expect a more cohesive experience. Innovative retailers are tearing down some of these walls, not letting “their organizational chart show up in their marketing or product development,” according to Sameer. Aligned with the localization trend is the promise of mobile: the ability to target users on a one-to-one basis. A mobile phone is not shared, it’s usually on and with you at all times. It knows a lot about you, your calendar, your social network, and it’s location-aware: it knows where you are. Currently two thirds of the world’s population have mobile phones, and smart phones are expected to eclipse PC sales by 2012. Google’s internal data has shown a 3000%+ growth in mobile “shopping” queries over the last three years; mobile queries to Google now exceed online queries in some geographies, and the number of queries issued to Google Maps products has grown substantially. Retailers are testing in-store traffic based on online traffic in specific DMAs. Google has added click-to-call ads on mobile devices, which is good for local businesses because the phone knows the closest location for the user, so he or she can call with
one click. Innovations in mobile have only just begun. Google realizes that “social” is just the web catching up with life. Each minute, more than 24 hours of content is uploaded to YouTube, and 270,000 words are written every minute on Blogger. If you do a query on Twitter every morning on “What to wear,” you’ll get responses every few seconds. Even if a brand isn’t mentioned, participants are still talking about products. Sameer suggests making these trends part of a company’s operational plans. For example, retailers should make sure they have 3G mobile coverage in all stores, making it easy for customers to bring information from the web directly into store aisles. He also suggests that UPC codes for products be prominently displayed, so people with mobile phones can easily scan them to get online information with new smart phone applications. However, Mitch Joel believes that, with the increasing connectedness of everyone, search will actually be less pervasive in shopping. He believes people will get information from friends, then purchase immediately, such as through their smart phones. To illustrate this point, he spoke of a dinner he had with two other bald men. They started talking about how they shaved their heads, and one of them suggested a razor that has a vacuum in it. One of them found it on Amazon.com via his smart phone and purchased it immediately.
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Resource Interactive’s Kelly Mooney interviews four typical millennials.
Digital Millennials are changing shopping Millennials are ages 10-28, and they make a $200 billion contribution to our economy each year. They have become our largest generation, bigger than the baby boomers; there are about 82,900,000 Millennials. Resource Interactive has researched Millennials since 2006 and has uncovered key defining traits of millennials. Defining traits of Millennials
»» Perpetually connected – they are never without their phones and are heavily engaged with social networks.
»» Multi-tasking and “productive” – they are watching TV, homework and online at once.
»» Filtering for immediacy and control – they’re smart about marketing and will filter it out.
»» Self-expressive yet assimilative – they express individuality, but it’s also very important to be part of the group.
»» Optimistic and self-entitled – they’ve grown up in very affluent times until just the last few years.
Millennials explain that they’re always connected.
»» They all prefer Facebook and use it a lot; none of them regularly use Twitter.
»» They use Facebook mostly for socializing; they are not sure they would shop via Facebook.
»» Privacy could be the downfall of Facebook; it’s very important to have control over who sees your profile.
»» They send more than 100 texts per day; they are constantly texting.
»» In large college classes, students will see hundreds of laptops open to Facebook; some are watching Hulu.com with one earbud speaker in, while “listening” to a lecture. The recession has had an impact on Millennials.
»» The recession has made some of them not want to buy as much as they did in the past.
»» They’re spending less today; waiting for sales and coupons.
Kelly Mooney interviewed a panel of four Millennials at the Social Commerce Summit, made up of males and females from age 13 to 23.
»» Their parents are giving them less money than they did in the past.
»» The 13-year-old who still lives at home must work harder to earn money from her parents now.
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»» None of them have their own credit cards; they’re fearful of credit cards and are more comfortable with debit cards. If they don’t have the money for something, they don’t buy it. They see their parents have a hard time keeping up with their credit cards so they are less likely to use them. Social media influences their shopping and purchase decisions.
»» They research purchases carefully, asking their friends and family, and customer reviews. Some post questions on Facebook to their network about products.
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If they are “fans” of a brand on Facebook, too many messages from a brand can become annoying.
»» Some of them use Foursquare or Gowalla; they may be interested in getting offers when they “check in.” They have unique interactions with media.
»» They watch most of their TV on Hulu.com; they only watch “real” TV for sports.
»» None of them have magazine subscriptions; they get most of their information and news online.
To be successful, make the most of your unique influencers. Social media levels the playing field, making consumer contributions as loud as – or sometimes louder than – the corporate marketing message. Dmitri Siegel, Executive Director of Marketing, Urban Outfitters, shared how this unique brand – with independent, creative consumers – uses social media to
take core business values and blow them out exponentially. According to Siegel, “We don’t have a logo. We don’t have a style guide. We have a spirit.” Their social strategies reflect this spirit and get their customers involved. Here are some guidelines Dmitri suggests. There are some people you want to be friends with, and some you don’t, just like in any social situation. Urban Outfitters started out by featuring some of its customers on its blog – people they or their customers “want to be friends with.” They interview their customers to draw in others who share the same lifestyle/style. But don’t be a snob – don’t ignore people. To get all types of consumers involved – not just the fashionistas or style mavens who regularly review products. Urban Outfitters ran a contest where consumers submitted images of love, so anyone could submit something creative. The company also embraces different uses of its products – photo reviews show the way people actually wear Urban Outfitters clothes, even paired with clothing and accessories that does not come from Urban Outfitters. Their products don’t really come to life until people show exactly how they actually wear it in the real world. Be a good listener. This is basic. Urban Outfitters gets about 1,500 reviews per week; they read them and dig into them. You also see what it’s like to be your own customer. For example, one woman said that a shirt she purchased was too big, but she cut it and wore it off the shoulder, and submitted a photo of her new creation. This gives Urban Outfitters a relevant data point about how the product is actually used.
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Ask good questions. If you put a good question out, you’ll be amazed at what you get. For example, last year Urban Outfitters did a “lo-fi, high style” sweepstakes/contest, where customers shared the cool things they had created for cheap. When Urban Outfitters started getting photographs from their customers, they saw that they are beautiful and creative. Today, when Urban Outfitters mashes up their own professional photos with those submitted by customers, even the marketing team can’t tell the difference – which is exactly as it should be. Urban Outfitters’ customers are creative and inspire Dmitri and the design team. Make some introductions. Urban Outfitters added community Q&A to their site, which created a good format for introducing customers to one another; they now get about 400 questions each week. Other customers as well as Urban Outfitters designers respond. The more people you can get involved in the conversation, the better the experience. Stop talking about yourself so much. Being social allows you to let your customer be the voice for awhile; be quiet, ask questions, and see what they have to share. You need a good party spot. It must be free to participate. For example, Urban Outfitters has often unsigned bands perform in its Backlot, their back parking lot behind a flagship store, and they stage similar events around the country. They’ve been doing these events for years, so now tens of thousands of people watch them through their live broadcasting. During and after the events, they feature cool people they met in their blog and on Twitter.
Music can really set the mood. Urban Outfitters has Music Mondays on Twitter, giving away hundreds of thousands of songs each month; it’s a top topic on Twitter each week. They usually feature unsigned bands, and play these songs in their stores, too, which creates a sense of discovery in the store. Urban Outfitters believes that if someone recommends good music to you, their level of credibility goes up. Be spontaneous. Urban Outfitters shares live links to their in-store events, so customers can watch even if they’re across the country. Don’t take yourself too seriously. Anybody can be cool, but awesome takes practice. Social media is a chatty medium; be authentic to your voice. Be vulnerable – share information to get information. When Urban Outfitters encouraged customers to send photos of their mothers as part of a Mother’s Day contest, their team members sent in their own photos, too. Keep in touch. These relationships have real value – keep them going. Keep up with the people you have interacted with. It’s less about numbers; more about oneto-one connections. Social media can’t be measured solely by number of people who potentially see the information, like traditional advertising is measured. The deep connections with individuals build over time and create an annuity that continues to grow.
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The potential downfall of social media? Privacy.
What will social commerce look like in a year?
Users must be able to control who sees their information, and brands must be responsible in data sharing and usage.
The third annual Social Commerce Summit lets us look back over the years to see the true evolution of social commerce. Two years ago, topics revolved mostly around retail and customer ratings. Today’s brands are taking social commerce – including all social interactions with consumers – seriously. Companies are learning to relate and act more as people, breaking down inauthentic walls of “marketing-speak.” And they’re experimenting and building best practices along the way.
Manish Mehta from Dell claims that the big, scary risk of social media could be privacy. Marketers must be mindful not to blindly promote social commerce growth at the expense of privacy (or even the perception of loss of privacy). A panel of four Millennials – digitally-enabled people between the ages of 10 and 28 – said that they must be able to control who sees their information on social networks such as Facebook. They are also reticent to share details about how they spend their money and are fearful of credit cards, partially due to the fear of identity theft.
The 2010 Social Commerce Summit reflects a moment in time. We’ll keep you posted on what continues to evolve.
Your next steps. These insights should answer some questions, but raise even more. Bazaarvoice is the world leader in social commerce, serving top brands across a huge variety of industries. Visit us at www.bazaarvoice.com and schedule a demo, where we’ll help you understand how to connect to consumers, build engagement, and drive measurable return on investment.
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Sources and contact information Presentations excerpted in this paper came from the following sessions at the 2010 Social Commerce Summit, April 19-21, 2010. For more information on this and future events, visit socialcommercesummit.com and socialcommercesummit.co.uk.
»» From Participation to Transformation Sam Decker, CMO, Bazaarvoice Twitter: @samdecker Email: sam.decker@bazaarvoice.com
»» Social to the Core: How New Media Unlike Marketing - Forces You to be Competent Again Douglas Rushkoff, author, Get Back in the Box Twitter: @rushkoff Site: rushkoff.com
»» The Bottom Line: Measuring Social Media to Deliver Business Value Manish Mehta, VP Social Media and Community, Dell Twitter: @Manish@dell.com Site: huffingtonpost.com/manish-mehta
»» Who are Digital Millennials and How are They Changing Shopping? – a panel of Millennials Interviewed by Kelly Mooney, CXO, Resource Interactive Twitter: @pkmooney Site: resourceinteractive.com
»» The Social rEvolution at TurboTax: Friendcasting the age of media anarchy Seth Greenberg, Director of National Media and Digital Marketing, Intuit Twitter: @sethg Site: linkedin.com/in/sethgreenberg
»» How Urban Outfitters Makes the Most of its Unique Influencers Dmitri Siegel, Executive Director of Marketing, Urban Outfitters Twitter: @dddmitri Site: dmitrisiegel.com
»» Organizing the World’s Information for Shoppers Sameer Samat, Director of Product Management, Google Site: linkedin.com/pub/ sameersamat/0/6b/530
»» How Golfsmith measures ROI Jamey Maki, Director of E-Commerce Twitter: @golfsmithhq Email: jamey.maki@golfsmith.com
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