Nothing So Practical as Good Theory 2 | Altimeter's Lora Cecere on Social Commerce

Next up in our series of “There’s Nothing so Practical as Good Theory”; a speed summary of February’s social commerce webinar by Lora Cecere and Jeremiah Owyang from the Altimeter Group.  The webinar itself, which you’ll also find below, is a distillation of research conducted by Lora for the 2010 Rise of Social Commerce Conference.

What is Social Commerce (The Definition): “The use of Social Technologies to anticipate, personalize and energize the shopping experience.” Both a channel and a new way of doing business.

How Social Commerce Works (The Theory): A pioneer metaphor, social Commerce is a four-stage journey west.

• Stage 1: Awareness: “Let’s be Social” Social for the sake of being social – retailers (mis)using social media as push media, marketing media – with no goal
• Stage 2: Dialogue: Enlightened Engagement: Enlightened Engagement: Using social technology to make it easier for the shopper to buy
• Stage 3: P2P: Store of the Community: Using social technology to create a community of customers, based on shopper insights and serviced by an adaptive store addressing changing customer needs
• Stage 4: Redefinition: Frictionless Commerce: Using social technologies to redesign the buying experience

The biggest growth in social commerce with come from travel, hospitality, finance and insurance, fashion (virtualization, customization and group-buy)

The Evidence

• Stage 1 (Awareness) brand Facebook/Twitter pages (good at updating, bad at dialogue and facilitating P2P interaction – just marketing) (Kenneth Cole Twitter page)
• Stage 2: (Dialogue) HP, Dell, and Zappos using social media as an internal collaboration tool and a research to better service customers. Levi’s using Facebook plugins for the Friend’s Store – recommendations based on popularity and popularity among friends, brands like Rubbermaid, deploying user reviews
• Stage 3: (P2P) Diapers.com (Amazon) Facebook page – enabling customers to connect – a community for mothers, customer’s baby photos as Facebook profile. ModCloth ‘be the buyer’ program – customers vote together on what gets sold – ModCloth use as customer insight/understanding resource.  Key is to find a community and service it – not create one. WetSeal – on-site ‘Shop with Friends’ app, mobile app – scan and see it modeled, how to wear clothes app.  Customer-centric store
• Stage 4: (Redefinition) – Delta’s social booking engine on Facebook (TicketWindow) – redefining group travel

The Recommendations:

• Start with the basics – Social commerce is about customer closeness: customers are moving offsite and connecting with each other on social platforms, and making decisions with each other there. Businesses need to be on social media to be where your customers are.
• Begin by engaging your fans on Facebook – ask your fans how you should use social media to add value, and which products they’re most likely to recommend
• Use e-commerce to sell social commerce internally: 10 years ago – when the Web was smaller than Facebook, CEO’s balked at requests for budget to deploy social commerce (no-one will buy online) but those that believed profited.  Social commerce is the second online commerce revolution
• Have clear measurable goals in social commerce – are you primarily seeking to anticipate, personalize or energize the shopping experience
• Use social commerce as a solution to offer your best customers a unique VIP buying experience
• Have a roadmap – awareness – dialogue – P2P – redefinition to anticipate, personalize or energize the shopping experience
• Deploy social commerce with emerging trends – Universal ID, Intersection of Interest and Social Graphs, Like Button tied to Open Innovation Networks, 2-D Barcodes, Social Search and Virtual Currency
• Fail fast, fail forward – social commerce is a journey not a destination, so start the journey  now, become a pioneers and learn as you evolve

SCT Likes: Using your best customers as a resource to develop your social commerce strategy, and then using the insights to offer your best customers a unique VIP buying experience, and deploying a customer-closeness strategy

SCT Adds: The ultimate destination of social commerce can be more than ‘frictionless commerce’ – it can be ‘social business’ – where social technologies deliver true ‘customer closeness’ allowing businesses to solve customer problems better, faster and more profitably.