Social Commerce

Amazon's Social Commerce Strategy: A Lesson for Brands

Yesterday, Amazon set about acquiring the Texas-based “one-deal-a-day” real-time social shopping phenomenon with added attitude Woot!

“Selling Cool Stuff Cheap”, Woot is a community-first group-buy site, a digital version of TV shopping that promotes interaction among shoppers, and offers various shopping channels – shirt.woot, kids.woot, wine.woot etc and a deal aggregator deals.woot (vital statistics, b. 2004, revenue $164m (08), growth 39.7%, 2.6m members, 2.2 monthly visitors, 1.6m Twitter followers, 19K Facebook fans, 160 employees).

We think the Woot! acquisition is a smart, pragmatic ‘look before you leap’ move from Amazon in the fast-evolving world of social commerce – and one that brands considering social commerce could look to for inspiration. The strategy is simple; identify social commerce solutions that work in the field first, and then deploy them.  Not necessarily through acquisition or partnership, but through emulation – emulation of that which works.

Social commerce has many facets, is evolving fast, and much of it is still experimental – Facebook social plugins, curated marketplaces, Facebook stores, deal feeds, real-time group deals with active pricing etc. Many but not all these new solutions have yet to establish clear proof-points in terms of opportunity and return – making investment risky.

In the social commerce arena, Amazon has been accused of missing the boat on social commerce, gold standard use of ratings and reviews, lists, social profiles and communities, notwithstanding.  Rumored to be interested in acquiring private flash-sale club giant, Vente-Privée after its purchase of Zappos, Amazon has stayed on the sidelines with respect to some of the more innovative and esoteric implementations of social commerce.  And watched, and learned – and now is investing in what works.

So how could Amazon’s pragmatic evidence-based social commerce strategy be applied to your brand?  Well, if we look at what appears to be working in the “new” world social commerce (i.e. beyond user content on e-commerce sites); group-buy deals and private sale clubs appear tower above other solutions in terms of user popularity.  So how could your brand deploy group-buy and private-sales – and in doing so emulate the strategy of the world’s premier e-commerce business?

Woot’s announcement of the Amazon acquisition – in it’s own inimitable style…  Followed by a recent interview with Woot! director Darold Rydl.

Chartered psychologist specialising in consumer behaviour, wellbeing and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.

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  1. Hi Paul,

    I notice that increasingly you report on strategies of selling large amounts of products to large social groups in a short space of time at a discounted rate.

    I work with clients who are in the fashion industry, and very much in the 'premium' category, and they simply do not want to do methods of selling large quantities at a discount (despite the benefits it may bring). How do brands remain exclusive, yet still get social commerce to work positively? If bulk buying at a discount is not an option, how can we stimulate people to buy, when increasingly they will just go to one of these group buy sites and wait for a deal…?

    Also, if one does engage in this, isn't there the risk of alienating a fanbase that are not on facebook/groupon? How do premium brands get involved and make it worthwhile, but refrain from tainting their image completely?

    This is just me thinking aloud, but I would love to know your views (if any) on it.

    Thanks

    Dan

    1. Dan, hi – thanks for comment and pertinent questions re. luxury/fashion industry.

      Street fashion (Diesel/Levi's – and even perhaps Burberry) is one thing – and social commerce can be/and has been appropriately deployed. And for high end designer fashion, private sale clubs such as Gilt et al is a great way of unloading overstock without damaging image.

      I personally see an opportunity for high-end brands to run their own private/sample sale clubs – like RowNine. I also think what LVMH has done with live-casting fashion shows on Facebook, turning social networks into event destinations and sharing the flagship store experience – and then linking this up to store preview/event invites and e-commerce stores is smart.

      I also think there is opportunity for loyalty programs with a referral mechanism built in – but done in an appropriate way – i.e. engaging fans as brand advisors, and giving them exclusive deals and opportunities as a thank you, with an offer to invite friends into the fold.

      Finally, I love the solution of the designer label VanRosen – they don't sell to anyone, you have to apply and be accepted to be a member of the club, pretty much sending in your CV to join – and buy their exclusive apparel. This takes exclusivity to a new level.

      Just some thoughts – happy to chat if you'd like to – as I think luxury/fashion nut still has to be cracked in social commerce – but think there is a big opportunity in this space.

  2. Yes I agree, there is something of a paradox in 'exclusive' and 'social', but its about finding clever answers to difficult questions and I'm excited by the prospect. Thank you for the insight and examples. Something I personally am starting to try is micro-targeting niche communities of interest for one of my brands that have a yachting theme to their fashion. I am starting on facebook due to the relative ease you can make and target ads quickly, but will be looking to expand this if successful.

    The idea of loyalty/refferal/fans as advisors is really good in my opinion, and am trying to convince some clients to adopt this path, but am struggling (like much of social media) to link it to any real ROI. Unfortunately no matter how many benefits an idea has, if it does not bring an ROI many clients do not seem to be interested. Will have to keep plugging away :)…

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