Rise of Social Commerce Key Takeaways – 'Legacy People' and SEX Shopping (Smart, Easy, eXciting)

So here are our top takeouts from Altimeter’s ‘Rise of Social Commerce‘ conference in Palo Alto last week (see accompanying post of showcasing 42 real world social commerce example covered at the conference)

• Definition: Altimeter’s take on social commerce – “Social commerce is the use of social technologies to connect, listen, understand, and engage to improve the shopping experience”
  • Comment – This new definition (appropriately) breaks social commerce out of the e-commerce box, to encompass social technologies used in the context of all shopping –  whether online, offline or, as is increasingly the case, a mobile powered hybrid of the two.

NB % in above table refers to % of retailers and brands interviewed by Altimeter

• Framework: Altimeter propose four stages of social commerce from “Let’s Be Social”, to “Enlightened Engagement”, “The Store of the Community”,“Frictionless Commerce”
  • Comment – we’re not sure that it’s useful to see the ultimate goal of social commerce as frictionless commerce; we think it’s more about shopper experience optimization.
    • From a customer-centric perspective we think social commerce is about SEX
      • Smart (shopping using social intelligence)
      • Easy (easy to discover, easier to choose, easier to buy),
      • eXciting (fun, rewarding, engaging) shopping
  • Interesting alternative frameworks were proposed by Pete Blackshaw (three moments of truth in retail “See It”, “Experience it”, “Express It” (social commerce is about the 3rd moment of truth – harnessing advocacy) and Alvenda’s Wade Gerten (The future of social commerce is portable, personal, and participatory)
  • A distinction was frequently made between onsite social commerce (adding social features to an e-commerce site) and offsite social commerce (adding e-commerce features to social presence – e.g. on Facebook)
• No to Social Strategy: A point made repeatedly was that having a social commerce strategy is meaningless – you have a retail strategy, and then look to how social technology can help (you, your partners and customers)
• ROI: The ROI of social commerce is not sales increase minus deployment cost, nor life-time value increase minus deployment costs – you have to factor in the value of referral, insights, ideas, peer support
• Beyond Social Commerce: A number of the speakers sought to move beyond (social) commerce, and spoke about rewiring retail to a social business/organization – using social technologies to hardwire the voice of the customer into the business
  • In addition to ‘Voice of the Customer‘, ‘Customer Closeness‘ was another recurrent theme with Apple help up as an example of understanding customers – and getting close to them (quite literally by removing the sales desk barrier between staff and shoppers with the mobile checkout in store)
  • Comment – Refreshing and a useful counterpoint to a focus on adding social to e-commerce sites, or e-commerce to social sites.  However, we were left wondering where the commerce bit went…
• Legacy People: Lovely soundbite from Ray Wang of Altimeter – when asked what are the biggest barriers to adopting social commerce: Legacy technology, legacy processes and ‘legacy people’! Love it
• Social Commerce & Brand Equity: Social commerce can build brand equity (your ability to take margin) by adding tangibly to the brand value proposition with (socially) powered apps – e.g. Kraft iFood Assistant (recipes, shopping lists, community)
• Why People Connect with Brands: The top 3 reasons people connect to a brand on Facebook – To stay current on available new products (35%), To receive coupons and discount offers (37%), To let my friends know what products I support (41%)
• Fish where the Fish Are: Facebook is the #1 website, with over 500m users – users who spend a 1/3 of their time online on Facebook. Implication: A significant portion of the social commerce pie will be Facebook flavored
• The Power of Likes: Fascinating presentation by Sinan Aral looking into causal peer influence – two key points
  • A Facebook “Like” has more viral reach (cascading likes) – than a Facebook  message/invite, and has a greater overall impact on trial (even though a single active word of mouth message is more likely to result in trial).  However, Facebook invites have a greater overall influence on sustained adoption [26% of Facebook Users use the Like button, which gets hit 65m times per day, over 2 million websites are using Facebook social plugins]
  • Just because behavior clusters in social networks, it doesn’t mean there is influence happening – homophily (birds of a feather flock together) is an alternative explanation
• More on The Power of Likes:  All talk is self-talk – when a user likes a brand, they’re telling their friends about themselves – not the brand (‘identity construction’)
• Social Commerce Priorities: What the voice of experience – social commerce practitioners – recommends:
  • Modcloth: Humanizing the brand
  • Kaboodle: Testing and Optimizing
  • Wet Seal: Social features not campaigns
  • Sephora: Integration (joining the dots)
• Shopkick: Cyriac Roeding from ShopKick had everyone hanging on his every word with an insightful market analysis and a product with strong value proposition.
  • ShopKick is social commerce for in-store – a check-in app that rewards you (kickbucks) for just stepping in the store (inc. Macy’s, Best Buy, Sports Authority)
  • Solves the problem of getting people into your store – if Google is for click traffic, ShopKick is for foot-traffic
  • He believes the future of social commerce is mobile (‘presence-based’)- because mobile is always-on personal media (its not about realtime, or on demand media)
  • The O2S (online 2 store market (research online, buy instore) is 4.5x the size of the e-commerce market – and growing faster (19% vs. 12%): Implication retailers with a bricks and mortar presence should focus on this