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Social commerce - the trends to watch

Social commerce - the trends to watch

By Caroline Parry, acting editor, UTalkMarketing

With social media now dominating the internet, it was only a matter of time before brands, retailers and companies trying to make money online adopted its successful features and tools.

Providing the missing link between the great access, deals and convenience of e-commerce with the inherently social experience of real life shopping, a social commerce revolution is predicted by media experts across the world (including social media overlord, Facebook).

Allan Blair, director of social media at integrated agency DDB UK and its digital sister Tribal DDB UK, believes social commerce is online retail reaching maturity. He explains: “For years, online retail has focused on allowing consumers easy access to hard to find products, or cheap deals on mass produced items.  However, the marketplace is now saturated with identikit web stores offering the same products for the same price.  Smart brands have realised that they need to differentiate themselves by offering their consumers something additional to attract them to their offering.”

Putting the buzz to one side, social commerce is a nascent market with only a handful of brands and companies driving it forward. Those that do it well, understand that social commerce will take online shopping (and the must discussed virtual goods economy) to the next level opening up new revenue streams, particularly m-commerce.

While there will be as many failures as successes in these early days of social commerce, Facebook is expected to play a major role, not least because its membership base is still growing. Indeed, shopping on Facebook (or f-commerce) is tipped as a trend in itself.

Steve Jarrett, chief executive of social media and mobile agency MePlease, explains: “Facebook is clearly the one to watch here. The extent to which it knows who you are and who your friends are will dramatically improve the relevancy of recommendations over time.”

With that in mind, it is crucial that brands understand the difference between creating something that is truly social (thus ‘shareable’) and just pushing their e-commerce through social channels. Tim Pritchard, social media manager at Manning Gottlieb OMD, points out: “With all the current noise around social commerce, many businesses are jumping right in without fully understanding what the true ‘social commerce’ or ‘social shopping’ possibilities actually are.

“It’s important to distinguish the difference between selling products through a shop that is on Facebook, and selling products through a Facebook shop that allows its users to seek comments/feedback even approval from friends before purchase.”

For many industry experts, including DDB’s Blair, online retailer Asos is perhaps the most established and successful brand in both social commerce and in its use of Facebook. “Its CRM strategy encourages customers to purchase items, share what they have bought, share photos of them wearing it,” he explains. “It has been wise not to limit this to the Asos website though and for years it has had a rich presence across every major social media site.

“Most interestingly though it has recently opened up a Facebook store that allows customers to browse, buy and share without even leaving the social network.”

Rufus Evison, consumer insight director for mobile marketing company Starfish 360, believes it is premature to talk about trends in this developing space, however, he concedes that enabling people to get online while in-store has struck a chord with consumers.

He explains: “Whether you are talking about people putting QR codes on their receipts to take you to a review page or about something that allows you to ask your friends, through Facebook or Twitter, about a purchase before you make it, this seems likely to become a trend as it is already firmly established behaviour amongst customers.”

Taking the idea of sharing with friends and family (and seeking approval from them) one step further is the “social shopping cart”, which would personalise your experience from the first step. Instead receiving the same generic homepage as everyone else, every user would get a page based on the purchases, ‘likes’ and recommendations of friends.

“As consumers we love to feel in control of the products and services we buy,” says Nick Ellsom, head of digital at agency PHD. “We despise the thought of faceless corporations and giant brands dictating what we spend our money on. Social commerce has allowed this to become a reality and the smart retailers are latching on to the possibilities this throws up.”

Similarly, personalised recommendations that offer you ideas based on your social interactions – which retailers can access by offering users Facebook Connect or other “social sign in”, which allows a site to connect to their social networks - are also expected to offer a huge opportunity.

“Facebook Connect is key trend,” says John Barton, head of planning and social media at Steak Media. “Levi’s was one of the first to take advantage of this, putting a “like” button against various jeans.  Allowing consumers to search for products by popularity, using crowd-sourcing to show what’s relevant and drive sales through target audience activity.”

“Social sign in”, including Facebook Connect, is expected to cause controversy for allowing brands to get too close for comfort. The fine line between useful, personal recommendations and invasion of privacy presents one of the key challenges for social commerce. For Jarrett, the key is respecting that consumers are giving up a lot of confidential information. “As both mobile and social move further into people’s space, consumers must retain control of everything and that is what will create brand advocates. The shift of advertising from intrusive to useful to, even, fun and pleasurable will take time.”

Rewarding consumers for social interactions (amongst other things) is one way to compensate them for what they are giving up. Multi-channel retailer Boden adopted this approach for its online community, which acts as a hub for customers with offers and reviews. Visitors to the site receive loyalty points for each action they take, as well as for completing research and polls, which are then converted into “money can’t buy gifts” including lunch with the company’s founder, Johnnie Boden.

The site, which operates through the BeAddictive platform, also helps to connect shoppers and allows them to share tips on subjects other than fashion, such as recipes. Mark Batty e-commerce manager at Boden, explains: “The social loyalty and shopping platform from BeAddictive will also increase brand loyalty with a powerful system rewarding our members with points which can be redeemed against products or services they purchase, which itself increases loyalty.”

Steak Media’s Barton believes rewards interactions is the foundation of social commerce. “Rewards drive business; it builds brands through word of mouth; people send it to friends/family and colleagues – this is a perfect arena to tap into – social circles are all about sharing and it drives traffic.  It’s the core essence of what social advertising is about – and why referrals and advocacy is important.”

It is also about delivering value back the consumer, says Ellsom. “Successful social commerce always delivers one thing and that is value back to the consumer. The value being delivered comes in many forms, but it must always be present. In exchange, some consumers will recommend you to their social communities and this is about as powerful form of marketing as possible.”

The introduction of a single social currency is also mooted as a possibility in the distant future, and, it may perhaps, be the key to ease of shopping on mobile devices. Facebook, once again, with its recently adopted Facebook Credits, which it is currently enticing game developers to adopt rather than retailers, is expected to be well placed should moves be made in this direction.

To keep ahead of social commerce trends from around the globe, check out 12ahead.com.


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