Harnessing the power of Social Commerce and Consumer Advocacy

Lately there has been a lot of talk around social shopping and Social Commerce. With over 86% of all online users engaged in some form of social activity it’s clear that the age of the Socially Connected Consumer is here. Power is shifting from institutions to the consumer and it’s critical to capitalize and embrace this trend. The question is, how?

Over the next few weeks we will examine the Socially Connected Consumer and explore the hottest trends and technologies in social commerce. Upcoming posts will include an interview with Sam Decker, CMO of Bazaarvoice as we look at the next generation of consumer driven content, we’ll then explore best practices to harness the power of active participation, and finally a look at how social networking technologies are evolving to drive sales/transactions.

So lets start by looking at the basics.

Social Commerce will impact more than just websites; it will become the new DNA of the customer interaction. A recent study conducted by the e-Tailing group, (Social Shopping Study 2007), uncovered some insightful trends. We already knew that ratings and reviews have become the number one buying aid with 71% (Forrester) to 79% (Jupiter) of shoppers using them. The study corroborated these facts, but also revealed that “82 percent [of shoppers] found reading reviews better than researching a product in-store with a knowledgeable sales associate.” This statistic has huge implications to multi channel retailers: if consumer-driven content is more effective than your most knowledgeable sales associates, perhaps it’s time to incorporate it into the in-store shopping process. This can be accomplished via a kiosk or mobile device, but it’s critical to do so in the context of the overall shopping experience. Don’t just throw your web-site on a kiosk in the store; instead focus on keeping the customer on the path to purchase by placing very specific reviews and product information related to the department or category where the kiosk is placed.

So now that we're thinking beyond just the web site and ratings and reviews, lets look at how Social Commerce is impacting key stages of the shopping process.

80% of the shopping process is spent in the “browse and research” stage which has been heavily impacted by a broad range of social commerce technologies:

• Social shopping engines such as MyShoppingPal aid in the product discovery process by employing collaborative filtering technologies and algorithms to generate “social” recommendations based on what similar users were interested in.
• Public shopping communities such as Kaboodle, Yahoo’s Shoposphere, and eBay Neighborhoods or private communities such as Netflix’s community enable shoppers to share lists, recommend favorite products, and discover new products.
• There are also SEO implications since searches typically focus on ‘problem oriented’ phrases that are frequently contained in consumer content.
• Social tagging or folksonomies enable shoppers to assign their own product tags. This is particularly effective to tap into the hippest lingo of your teen segments that traditional marketing hierarchies don’t support.

Once customers have established their short list and have moved into the research phase we see ratings and reviews come into play:

• 81 percent of consumers use customer reviews to decide between two or three products or to confirm that their final selection is the right one.

The product selection and configuration process may also be enhanced through social interaction

• Providing customer driven FAQs help close the sale by augmenting the selection and configuration process (not to mention reducing call center volume.) According to Bazaarvoice, "Online businesses lose as many as 67% of consumers due to a lack of online product information". To solve this problem they have launched Ask and Answer a hosted social commerce service that gives shoppers the answers they need.

The next generation of Service and Support will also be driven by the consumer:

• Your customers are the product experts and typically have more ‘hands-on’ time with the products you sell than your CSRs. Many brands have tapped into the collective intelligence of their customers to drive the next generation of customer support. Open up knowledge databases and enable customers to share and add their product expertise (in a moderated fashion) since your support representatives can’t possibly master all of the different configurations or usage scenarios. For example, networking a DVR into a home network/theater or configuring a product for a specific use case. This is an excellent example of cross-channel optimization since it’s significantly more cost effective (and more efficient) to drive customers to online support than to a call center. Brands should also use this information to close the loop -- learning more about key usage scenarios and challenges, while better arming call center representatives.

Building loyalty and driving repeat business

• Finally, many retailers are using community and social features to bring customers back to their sites to share experiences. This pull strategy leverages capabilities such as forums and photo boards – a favorite example of mine is Bass Pro Shop’s OutdoorSite Library. Their customers come back to share stories and post pictures to the Braggin' Board from the weekend’s outdoor adventures… and while they’re there, Bass Pro Shops is not just building brand awareness but can actively sell. Jeep is another great example, they're not only building brand loyalty with their customer photos but they're using them as the foundation for print campaigns.
  

But successfully harnessing social commerce requires you to think more broadly than just your website. Progressive retailers already have Facebook and Myspace pages. Who would have ever thought that a retailer would have over 6300 BFFs, (that’s Best Friends Forever for us non-millennials). Other brands are employing viral marketing strategies to publish content, photos, and video on existing social networking sites and sharing sites like YouTube. An entire viral marketing industry has emerged that’s focused on exploiting social and customer content and advocacy. eBay has embraced Marsha Collier as one of their leading advocates and Diesel leveraged the influence of social web star Ze Frank.

Brands are just starting to harness the full potential of social commerce and consumer advocacy. In the future, customers will be accustomed to actively participating and collaborating with brands while relying on each other for product discovery and as the most credible source of brand and product information. Join us over the next few weeks as we dive more deeply into this topic

What are you doing in this space?