For those of you who missed it, here are the slides from Alvenda‘s social commerce webinar featuring David Saville, Innovations Product Manager at Hallmark, and Wade Gerten, CEO and Founder, Alvenda.
Social Commerce Today was delighted to play supporting act, presenting a 15 minute summary primer on the social psychology of social shopping. Enjoy. (Click through to Slideshare to download).
Just like Groupon will eventually be forced to conform to market realities, so will Alvenda. But it will have served a purpose — it will have employed Alvenda employees and fed families. And likely deliver a profit to Groupon's investors. But ultimately this will be a money-loser for the acquirer. Just as Linkshare was to Rakuten.
My main thesis: People don't shop this way. They don't much a) shop on Facebook — or any other non-ecommerce related sites… or b) "share stores."
Need proof? Look at the last 10 years of affiliate marketing where this model has been tried by the likes of Nexchange, iMediation, ePods, etc. And under the same promise — create a legion of free marketers. This is essentially the same thing but somehow Facebook makes it more compelling based on its mass.
"Your customers are here now" (at Facebook) is not a compelling enough business case.
But then again, 1800Flowers and others like them have never needed a compelling business case to make an investment that ultimately doesn't pay off.
The allure of 500 million high-energy active users who seem to be perpetually sharing and commenting on things is difficult to ignore for brands and retailers. It's hard not to fantasize a scenario where the "things" that they comment on are instead brands, products, recommendations, etc. That would be a marketer's wet dream. It's like organic marketing on steroids.
My take is that most people on Facebook in all likelihood have low purchase intent. People hanging out on Facebook have as much purchase intent as people hanging out at, say, a church social, and we know how important underlying purchase intent is to conversion numbers. The 500 million number is an illusion, and it's as useful as saying "set up an ecommerce website and have access to however-many-billion-internet-users".
The social commerce space is still nascent, and many companies have different takes on how best to leverage social to drive commerce beyond abstract things like "engagement" or "conversations." Between infusing commerce into social and infusing social into commerce, I believe in the latter; the difference is obvious. The former is obstructive, the latter is facilitative. I find difficulties in seeing how commercializing social will improve the social networking experience (but I find the reverse to be easily believable; aren't we all tired of all the social media marketing spam?). But maybe it's just my bias, but socializing commerce seems to have potential to improve the ecommerce experience.
Hi Jeff, thanks for this thoughtful and thought-provoking comments. I guess it all depends on whether one believes market realities are evolving – 15 years ago, nobody shopped on the web, and nobody used online classified ads (essentially what Groupon does); now both are mainstream. If e-commerce can be made quicker, simpler and cheaper from within Facebook or from local hubs such as Groupon, is there any reason why they should not take off.
Alvin, great analysis – love the distinction between facilitative (social in commerce) and obstructive (commerce in social). Today, it's hard to quarrel with your POV – I agree, but I think Facebook is evolving from a conversational platform to something bigger – a virtual web built on the web – a curated walled garden where progressively we'll find more and more of the functionality of the open web. If this is the case, commerce in social will be a natural evolution for Facebook.
[…] the open web – creating a convergence of social networking, e-commerce, and advertising (see presentation covering Alvenda’s StoreCast app – and their blog entry). Why just have your cake […]
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