Q: How do you define social commerce?
A: Shopping is an inherently social experience. We’ve always wanted our friends’ input on things we’re buying, whether it’s the experiences they’ve had with a camera or whether it’s asking, “Does this look good on me?” Social commerce is about taking the digital networks that we’ve spent time building up over the last few years and bringing that social graph into the online and offline shopping experience.
I liken where we’ve been over the last year to the early days of ecommerce, where a lot of the sites were awful, overly literal skeuomorphic translations of the shopping experience into digital (even today brands like Tesco and Norma Kamali are still trying to pull off 3D ecommerce experiences). Obviously as we progressed and got more sophisticated we realized we didn’t want to shop a store that looked like a store online. The earliest social commerce were sort of the same thing—cram a store into Facebook.
Q: So who is doing social commerce well and why?
A: Some sites like Fab are creating social commerce feeds that show what your friends and larger networks of like-minded people are adding to their wishlists and buying. Groupon is using social as a way to deliver targeted offers and deals primarily as a means of getting people into physical retail environments. It’s really not so much brand new ideas as much as it is adding kind of a social layer to things that have already worked within the retail environment.
Product reviews, wishlists that allow you to share what you want, and even many of the recommendation features that Amazon pioneered are still valid; these featured paved the way to bringing social aspects to commerce.
Q: Are you sure that social commerce is going to take off?
A: Ultimately, social media is about tapping into and augmenting existing human behaviors. As I said, shopping is already a social process, so I fully expect social commerce to become the dominant paradigm, but maybe not the way (storefronts embedded into social networks like Facebook) that some originally expected. We’re going see more and more ways to use social triggers and apps as a means to get people into stores, to give people a reason to shop, get them over the hump, to complete a purchase.
Q: Is there a disruptive component to this that’s going to fundamentally change an aspect of shopping?
A: I see mobile as the true disruption and consider social an enablement on top of that. The delivery of social through mobile in a commerce environment is powerful, allowing me to bring the right parts of my network into the in-store experience in a way that’s intimate yet extremely timely. Whether it’s seeking reviews from trusted sources or being able to seek the opinion of select friends and family when you need them most, the key is being able to access those social networks when you’re prepared to buy, not losing a consumer when he or she is deep into the purchase funnel.
Look at how many people are going into stores and using mobile price comparison apps. I think that that’s the big disruption—52% of consumers are already using their phones in stores.
Q: So what are some of the barriers to the mobile and social evolution of shopping?
A: A lot of ecommerce sites have spent years optimizing their purchase paths, so the integration of new social layers has to be backed by strong data that supports that it’s worth making significant changes to their experience. Add in the realities of the retail calendar, where if it doesn’t get done by October or early November then it has to be pushed into next year’s calendar. There are also barriers with the physical environment. Changes in retail stores require adequate testing before implementation.
All that being said, we’re seeing a number of mobile and social commerce experiments being put into play in advance of this holiday season. I’d expect those to provide the case studies and learnings that will influence a significant number of retailers, online and off, in 2013 and beyond.
Q: How do you see this developing over the next 12-24 months?
A: An aspect that will continue to drive a lot of attention in the social shopping space are platforms like Pinterest—where millions of people are curating beautiful wishlists of the things they want. We’ve seen recent studies that are starting to suggest that Pinterest is a more important driver of online commerce sales than Facebook is. Some estimates from ecommerce studies are placing Pinterest as high as the 3rd largest source of referral traffic on the web today.
Retailers are putting a lot of resources behind efforts to increase consideration and get people from these thriving networks into purchase paths.
Q: What can we do to help our clients to better leverage social tools?
A: Too often, whenever new social solutions have come along, a client has seen some breathtaking case study where somebody increased sales by a staggering percentage and they expect that they’re going to be able to get those same returns. And we know that depending on the client and what business they’re in, that just may not be the case. Being able to get our clients to experiment and be excited about learning in an iterative approach without overselling will keep them from being disappointed when they realize they haven’t increased sales by 300% over a year. It’s not about expecting next quarter’s numbers to skyrocket because you just added a new Pinterest page to your social portfolio.
Social CRM is something of a north star that we’re tracking. The promise is to build a very rich consumer profile that reflects all of the purchases someone made and the things that he’s done in store and online. From the social side, we’ll have all this great data about who he is and what he likes, and where his passions lie.
What does the future of our relationship with our consumer look like the more we know about them? I believe that working with our clients, experimenting, and using what’s at our disposal and developing new approaches, we can get to a place where we’re doing some really exciting things.
Author: Kyle Bunch, Group Director, Mobile and Social Platforms, R/GA Austin