As requested, here’s today’s “Does My Butt Look Big in This?” presentation on emerging trends in social commerce – what works and why. Presented at the Social Media Summit – Wiesbaden August 31, 2010.  Click through to slideshare to download deck.

Bottom line (pun intended ) – the social commerce sweet-spot is where brands and retailers monetize their social media investment by helping shoppers use their social intelligence to make smart shopping decisions (i.e. ‘social learning’ from the experience and opinions of others… answering the perennial and profound question of “does my butt look big in this?”).  Enjoy.

Here’s a short downloadable presentation on three ways the luxury sector is using social commerce – selling with social media – to drive sales for premium upscale brands, but without discounts and deals and whilst retaining and image of exclusivity.

Enjoy, and comments welcome (link through to Slideshare to download deck).

The good folks at ZippyCart.com, the reviews and comparison site for e-commerce shopping carts, have put together a nice infographic (below) summarizing the evolution of e-commerce, providing a context and pointing to four trends patterning e-commerce today and in the future – social commerce, group buy, private sales and mobile commerce. Click the infographic for a larger version.

The ZippyCart infographic reads well with John Provisor’s (e-commerce specialists Guidance) white paper From eCommerce to We-Commerce: The Social Evolution of eCommerce (download).

We’re old enough to be fans of Sting – so we’d have have bumped Pizza Hut off the infographic for the first ever [secure] e-commerce transaction in 1994 – the sale of Stings CD “Ten Summoner’s Tales” for $12.48, plus shipping, on August 14, 1994 on NetMarket.  But we like pizza too.

It’s up for debate whether group-buy and private-sale ‘clubs’ are distinct from, or fall within within social commerce – we’d include them as components of social commerce – but not social shopping (sharing the act of shopping), as clubs and groups are by definition social.

But sterile definitional debates aside – it’s a lovely infographic and great backgrounder  for [social] e-commerce workshops.

Forbes has just published a useful introductory ‘birds-eye’ overview of social commerce (archived below) – explaining how social commerce is driving the fortunes and future of e-commerce. It’s a useful teaser/primer for management, social media marketers and e-commerce teams thinking about social commerce.

Along with SEO, Patricia Nakache, partner at venture capital firm Trinity Ventures, argues that social commerce boosts customer acquisition effectively – but it does more than that – it boosts customer retention, by delivering fresh (user generated) content and tapping into existing communities (social networks); thus fulfilling the holy 3C e-commerce grail of content, community and commerce.

Top factoids from the article:

• Over the last decade, e-commerce sales have grown on average 19% per year, far faster than offline retail.
• Even during the dark days of 2009 when retail sales shrank 2%, e-commerce vendors grew sales 1.4%, .
• Facebook now boasts 500 million active worldwide users (150 million in the U.S.), and 56% of online shoppers use Facebook.
• Social marketing alternatives [to SEO] are emerging, including allowing customers to post their purchases or their “likes” to their Facebook walls, or encouraging them to invite friends to participate in a discounted group purchase.
• Though many retailers have not yet been able to drive meaningful traffic from social media, 11% of them consider social media to be their most effective acquisition tactic, and that number is likely to grow.
• Private sale sites such as Gilt.com, RueLaLa and Zulily create a perception of scarcity, to boost e-mail open rates tenfold or more from 2%-3% historically.
• Interesting hybrid offline/online social retail models are emerging such as Stella & Dot, which melds multi-level marketing home-based “jewelry parties” with online shopping.
• Today, the 3C’s (content, community, commerce) is emerging as a viable model because sites can rely on free user-generated content and can capitalize on existing social networks to grow viable communities.
• Woot!, the trailblazer in the “one deal at a time” space recently acquired by Amazon, has more than 1 million visits each day but employs no e-mail. Instead, Woot! broadcasts through Twitter each daily deal and now has 1.6 million followers, the second most among retailers.
• Many sites are introducing game-like loyalty programs or “book-of-the-month” subscription models to drive retention. For $39.95 a month, ShoeDazzle delivers its members a pair of shoes, though members can opt out any given month.

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Article Archive

Why E-Commerce Is Flourishing

by Patricia Nakache, 08.03.10

Archived from http://www.forbes.com/2010/08/02/groupon-facebook-shopstyle-technology-ecommerce-social-media.html

Recent headlines that retail sales shrank in June for the second straight month were a grim reminder of how the Great Recession has torpedoed traditional retailers. Thousands of stores closed last year, and chains ranging from Circuit City to Filene’s Basement declared bankruptcy. But shopping is flourishing someplace else: the Internet.

Over the last decade, e-commerce sales have grown on average 19% per year, far faster than offline retail. Even during the dark days of 2009 when retail sales shrank 2%, e-commerce vendors grew sales 1.4%, capitalizing on price-sensitive and increasingly Web-savvy consumers to continue to gain market share. So while traditional retailers have been struggling to survive, forward-thinking online merchants have unleashed a wave of innovation that is improving the economics of e-commerce.

Until recently, when it came to landing new shoppers, e-tailers had fallen into a rut. They relied heavily on search engine marketing. It’s popular because it delivers customers reliably, but there is a marginal cost associated with each new customer. That cost can grow at periods of peak demand.

Online merchants, emulating their online media counterparts, have gradually recognized the value of search engine optimization to drive free users to their sites through natural search. Amazon.com and shopping search sites like TheFind.com and ShopStyle have led the way. TheFind.com now has 16 million visitors each month, almost entirely from search engine optimization. In an Internet Retailer survey, 73% of e-commerce vendors cited better search engine optimization as a website design priority in 2009.

Meanwhile, social media has burst on the scene with the promise of more free (aka viral) traffic. Facebook now boasts 500 million active worldwide users (150 million in the U.S.), and 56% of online shoppers use Facebook. Social marketing alternatives are emerging, including allowing customers to post their purchases or their “likes” to their Facebook walls, or encouraging them to invite friends to participate in a discounted group purchase. Groupon presents to its subscribers a deal of the day from a local business, such as a restaurant or spa, but the deal does not “tip” until enough people have signed up for it, creating an incentive for users to tell their friends about the deal.

Though many retailers have not yet been able to drive meaningful traffic from social media, 11% of them consider social media to be their most effective acquisition tactic, and that number is likely to grow.

Once visitors are browsing the site, the next challenge is to convert them to buyers. Traditionally, online retailers have focused on landing page optimization (ensuring that the messaging and layout of the first page that visitors see entices them to buy), streamlining the checkout process, and deep, relevant content, such as product specifications, photos, and reviews that can help shoppers make decisions.

Many online merchants have injected an additional conversion-boosting element into the Web shopping experience: fun. They have begun to adopt techniques that are tried and true drivers of impulse shopping in the bricks and mortar world: limited time or limited quantity offers (think Home Shopping Network or Kmart’s Blue Light Specials), brand or product discovery, and product “story-telling.”

Private sale sites such as Gilt.com, RueLaLa and Zulily offer members-only access to limited quantities of deeply discounted designer goods. By creating a perception of scarcity, e-tailers have been able to boost e-mail open rates tenfold or more from 2%-3% historically. Techniques such as game play are unique to the online environment with, for example, Swoopo and BigDeal introducing the concept of penny auctions to e-commerce. Interesting hybrid offline/online models are emerging such as Stella & Dot, which melds multi-level marketing home-based “jewelry parties” with online shopping.

Perhaps the most disruptive innovation is occurring on the customer retention front. When e-commerce first emerged, pundits spoke of the 3C’s of successful e-commerce sites: content, community and commerce. The model failed because content was expensive to produce and individual e-commerce sites had a difficult time sustaining true communities. Today, however, 3C’s is emerging as a viable model because sites can rely on free user-generated content and can capitalize on existing social networks to grow viable communities.

Woot!, the trailblazer in the “one deal at a time” space recently acquired by Amazon, has more than 1 million visits each day but employs no e-mail. Instead, Woot! broadcasts through Twitter each daily deal and now has 1.6 million followers, the second most among retailers.

Many sites are introducing game-like loyalty programs or “book-of-the-month” subscription models to drive retention. For $39.95 a month, ShoeDazzle delivers its members a pair of shoes, though members can opt out any given month.

The generation that grew up with the Internet is now in its first jobs and has spending power. These individuals are comfortable buying online, but they also have high expectations for a compelling online experience. The good news for e-tailers is that the pillars of a great consumer experience–friend referrals and recommendations, a fun shopping environment and a vibrant community–can also translate into superior customer economics. No wonder e-tailing is flourishing.

Patricia Nakache is a partner at venture capital firm Trinity Ventures in Menlo Park, Calif. where she focuses on business and consumer services and software companies.

ATM or bank clerk?  Self-service or live-service? Which do you prefer?

A new Havard Business Review article - Why Your Customers Don’t Want to Talk to You – suggests, on the back of recent research, that your customers don’t want to talk with you, or have any kind of ‘relationship’ with you – they just want you to solve their problem, and if that entails buying a product or service from you, then all the better (for you).

And if that problem-solving process can be automated to be smoother, faster and more efficient than dealing with a human – then most customers may prefer that too.  Self-service wins out against live-service.

So what’s this got to do with social commerce?  Well, it underscores the truth about business-customer relationships – you’re there to serve them, not be friends with them.  It also helps explain the finding by Razorfish that customers don’t want to have conversations with you in social media, nor do they want you be part of their conversations – what they want from you is simple; news about deals, events and offers.

Secondly, and by extension, the implication of the HBR article is that social features on e-commerce sites or on e-commerce-enabled social platforms shouldn’t get in the way of transactions.  Rather social features should make the business of companies serving – and selling – to customers, smoother, faster and more efficient.

More generally, if the HBR view holds for your market and your customers, something that is worth checking out, then there are a number of implications for social commerce;

• Throw out the Cluetrain Manifesto – markets are not conversations, they are markets
• Review your social media strategy – think commerce platform not conversational platform (and consign ‘engagement’ and engagement platform to the bin)
• Use social media to make it faster, smoother, and more efficient for customers to buy from you. If social makes things more complex, it’s getting in the way.
• To the degree that social media is conversational media for customers, don’t crash the party, host it – stop engaging in conversations with customers, and start facilitating and curating conversations between customers.
• Prioritize passive social features that require the least effort on the part of customers (e.g. social recommendations based on social graph, group-buy deals etc).

Food for thought.

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).

Here’s a short and instructive podcast from leading UK trade magazine New Media Age, on the state of social commerce in the UK.

NMA Social Commerce Podcast

The NMA podcast is part of the rising tide of media coverage that social commerce is receiving in the UK right now.

Last week New Media Age ran a high profile article with the title “Is the UK ready for social commerce?” by Charlotte McEleny (archived below). In the NO camp, Ebay representatives Phillip Rinn and Alex Marks and online retail trade body IMRG suggested that the Brits, or rather their digital markets, are too immature for social commerce.

The argument seems to be an alleged British disconnect between an e-commerce mindset, which is still “transactional”, and a social mindset, which for brands and retailers is about “reputation management”; essentially another PR vs Marketing debate.

In the YES camp, Sienne Veit, social and mobile commerce development manager at high street retailer Marks & Spencer, argued that brands and retailers are being pulled into social commerce by consumer demand.  Smart brands and retailers are wising up to this market demand – and offering social commerce services. Jim Clark, analyst at retail analysis firm Mintel, dismissed Ebay’s dissing of social commerce as ostrich-like motivated perception: Social networks pose one of the biggest threats to Ebay and its PayPal subsidiary, with Facebook with it’s size and imminent launch of Facebook Credits, the leading menace.

That Ebay’s cries of British immaturity are acts of self-delusional bad faith gets echoed in the above NMA podcast, where the NMA editorial team conclude if “if I was Ebay, I’d be quite worried at the moment”.  Charlotte McEleny summarizes current social commerce excitement due to opportunities for building in real-time social functions into the transactional process – at the point of transaction and concludes “it’s going to be huge”. Nevertheless, both the article and podcast suggest that in the UK there is still some confusion over what social commerce actually is – social on commerce sites and/or commerce on social sites?

And today Marketing Week publishes a bombastic article “Forget e-commerce; social commerce is where it’s at” (archieved below) penned by Michael Nutley explaining that with leading brands such as P&G and Disney embracing f-commerce, and the upcoming launch of Facebook currency, social commerce is set to go mainstream in the UK. Michael notes that if social commerce on Facebook stumbles, it’ll only be because of Facebook itself – 30% commission on transactions (when using credits) and privacy concerns.

And finally in an accompanying article in today’s Marketing Week ”Local businesses turn to social commerce“, Peter Briffett, managing director of group-buy site LivingSocial UK, sets out guidelines for local businesses looking to choose from the myriad of group-buy sites sprouting up over the country.

1. The group buying site has invested money and energy into building quality lists in your city.
2. The group buying website has been running deals successfully in your city or others.
3. There is dedicated team on the ground that will help you make sure you get the exposure you seek and have someone to call if something is not to your liking.
4. Checkout past deals to see if you would like to be in their company.
5. Check the terms and conditions carefully to ensure you’ll be paid promptly for all the sales not just vouchers redeemed and that you have a way out in the future and are not promising exclusive rights to one group buying operator.

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Archived articles

Is the UK ready for social commerce?

By Charlotte McEleny, in New Media Age

Archived from http://www.nma.co.uk/news/is-the-uk-ready-for-social-commerce?/3016051.article

Ebay, one of the world’s biggest ecommerce brands, has said that the UK market isn’t yet mature enough for social commerce, despite commitment from brands such as Dell and Disney.

Phillip Rinn, director of advertising partnerships at Ebay UK, said British consumers aren’t ready for social commerce, and the auction site is instead testing ways in which social media more broadly could fit into a transactional website.

This is in contrast to commitment from big-name brands including Dell, Disney, easyJet and P&G (nma 22 July 2010), which have launched social commerce services and tools or plan to over the next year.

Dell has been using Twitter to sell computers since 2007 and earlier this year said it had made $6.5m via the profile since it launched (nma 25 March 2010), while Disney was the first brand to sell cinema tickets directly through a Facebook app to US consumers.

But Ebay’s Rinn said, “For us social is probably not where it could be. We’re using Twitter and Facebook but haven’t fully embraced them. We’re in a testing mode to see how social fits into a transactional mindset. Social shopping isn’t yet mature in the UK.”

Likewise, Alex Marks, head of international business marketing at Ebay Advertising, said that although social media is important for retailers, it doesn’t need to be a separate focus.

“I don’t think social shopping needs to take a foothold because it’s by definition a social activity and a retailers’ experience should be worth talking about,” he said.

David Smith, operations director at online retail trade body the IMRG, said there are still some doubts from retailers, whose focus in social media is on reputation management.

“For a lot of retailers there are other channels from which they feel they can get a better return on investment,” he said.

However, Sienne Veit, social and mobile commerce development manager at M&S Direct, said Marks & Spencer is investing in social media because of demand from consumers.

“I don’t think anyone has yet come up with the perfect solution but our customers have a propensity to shop in this way,” she said. “The more people access social media the more this will be the case. The potential lies with the link between social and mobile, which is where we’re already seeing good results.”

Will Dymott, head of ecommerce at men’s fashion retailer Lyle & Scott, said the problem lies in a lack of definition around social commerce. “Ebay was one of the pioneers in social functionality by introducing feedback on sellers,” he said. “The problem is that social isn’t defined yet because it’s so new. It can mean either using Facebook to sell or including customer reviews.”

Facebook, expected to announce its 500 millionth user imminently, is due to roll out its credits service beyond beta trials this September. Brands and agencies said it could become a challenger to big online retailers because it can use social information for targeting and recommendations (nma 15 July 2010).

Jim Clark, senior technology analyst at retail analysis firm Mintel, said social networks could pose one of the biggest threats to Ebay.

“It has become paralysed by the fact that it now has a massive audience but has moved away from its roots as an online car boot to become a high street aggregator,” he said. “Social networks also have the added benefit of products being recommended or people buying directly from friends.”

Forget e-commerce; social commerce is where it’s at

By Michael Nutley, in MarketingWeek, 29 July 2010

Archived from http://www.marketingweek.co.uk/disciplines/digital/forget-e-commerce-social-commerce-is-where-its-at/3016388.article

Plans from Facebook that will enable users to buy products without leaving the site could have major implications for etailers.

New buzz word ahoy!

Yes, for those of you who have been eagerly awaiting the latest phrase with which to impress your less digitally inclined friends and colleagues, I give you: “social commerce”.

As a term for the latest development in the interactive space, social commerce has a lot going for it. It includes the word social, for a start. It’s vague enough to be subject to a number of different definitions, which allows for endless discussions about whether something is, or isn’t, part of it. And what’s more, by some of those definitions it has been around for ages, allowing some “promise of the internet” credibility to cling to it.

Amazon’s use of customer reviews and eBay’s system of groups and seller ratings could both be seen as early examples of social commerce, while Dell claims to have made $6.5m (£4.2m) selling computers on Twitter since 2007. But if that’s the case, why are people just beginning to talk about social commerce now?

Two announcements in the past month have catapulted the concept into the forefront of discussions on new media. The first was that Facebook announced it would shut down its Facebook Gift Shop next month, paving the way for the launch of its virtual currency, Facebook Credits, possibly as early as September. Already in beta testing, Facebook Credits will initially allow users to pay for virtual goods such as games, but will eventually let them buy anything, with the network expected to take a 30% cut of all transactions.

The second announcement was that Procter & Gamble has started selling its Max Factor brand cosmetics through Facebook as part of what the FMCG giant calls “small-scale direct-to-consumer” initiatives. This follows in the footsteps of Disney in the US, which recently launched a Facebook app allowing people to book tickets for Toy Story 3 without leaving the social network.

These two approaches take social media on a step by bringing the ability to purchase what you’re talking about on the social network within the network itself. Etailers know that every page you ask people to click through results in a drop-off in numbers, just as each floor you ascend in a shopping mall has fewer shoppers. So when there’s buzz being generated about your products in the social space it makes sense to bring the checkout to the potential customers, rather than the other way round.

Facebook Credits could take that principle and write it very large indeed. The social network is on the point of announcing its 500 millionth member, which alone makes it a compelling place for brands to set up shop. That, along with the cost, is one of the reasons brands are increasingly using Facebook pages rather than microsites as the hubs of their digital marketing campaigns. Add to that the amount of data that Facebook collects on its users, and the fact that Facebook Connect allows users to log into sites outside the platform using their Facebook login, and you have an ecommerce platform of unprecedented reach and power.

But while there are compelling reasons to use Facebook as an ecommerce vehicle, there are also big questions. The first is whether this is a vehicle for everyone with a product to sell, or whether that 30% transaction fee will mean it will be used mainly by brands looking to sell direct. Certainly it opens up the possibility of brands collecting levels of data about their customers that have never been available before.

Another big question is what Facebook’s move means for other players that could be considered to be in the social commerce space. Speaking to New Media Age last week, eBay UK’s director of advertising partnerships Phillip Rinn said that social shopping isn’t yet mature in the UK. This seemed like a curious remark from one of the pioneers of social commerce, not so much because it’s clearly true as because one of the signs of a market maturing is the arrival of new entrants. The real concern for eBay must be the threat that Facebook Credits would pose to PayPal, which is currently the closest thing there is to a web currency. There must also be a concern that a retail structure based on Facebook could damage eBay Shops, but as this has carved out a niche providing an ecommerce platform for smaller retailers, it may be able to coexist with Facebook Credits.

The final question is one of privacy. A similar scheme to the one proposed for Facebook Credits was suggested back at the beginning of the decade. It would have stored people’s personal data, allowing them to shop across participating sites with only one login. But it was proposed by Microsoft and people decided they didn’t trust the Redmond giant with that sort of data. The question for Facebook is how much times have changed, and whether people now trust Mark Zuckerberg more than they used to trust Bill Gates.

Inset: Facebook Credits will initially allow users to pay for virtual goods such as games, but will eventually let them buy anything, with the network expected to take a 30% cut of all transactions… and Procter & Gamble has started selling its Max Factor brand cosmetics through Facebook as part of what the FMCG giant calls ‘small-scale direct-to-consumer’ initiatives.

Michael Nutley is editor-in-chief of New Media Age and Reputation Online

Local businesses turn to social commerce

By Peter Briffett, in MarketingWeek, Wed, 28 Jul 2010

Archived from http://www.marketingweek.co.uk/opinion/local-businesses-turn-to-social-commerce/3016351.article

Peter Briffett, managing director of LivingSocial UK, sets out some guidelines for small, local businesses looking to harness the power of social commerce.

“Group buying” is an advertising phenomenon that has proven popular with local businesses in the US, and it is rapidly gaining ground in the UK marketplace as businesses look for cost-effective and low-risk ways to promote their business and acquire new customers. Group buying enables merchants to market their products and services directly to consumers living in their local area with zero risk and ROIs unmatched by other digital and traditional marketing channels.

Tens of thousands of subscribers opt-in to receive emails with daily deals for restaurants, spas, concerts, sporting events, attractions and consumer goods in their city at a significantly reduced rate. In addition, the retailer is promoted on the group buying website, through social media and the word-of-mouth “buzz” that the campaign creates by focusing on one great local merchant per day.

How does group buying work?

The concept of group buying is quite simple: Every morning subscribers receive an email with a daily deal from a local business at a significantly reduced price, generally 50-90% off. Subscribers who grab the deal within the 24-hour window immediately commit to becoming customers of the featured business, but don’t have to redeem the voucher for a few months to a year. It is a risk free platform that guarantees local businesses more customers into their shops, restaurants or venues without making any upfront investment.

How is this different from other types of online marketing?

Unlike other forms of online marketing such as Google AdWords which is constructed on the pay per click basis , “group buying” businesses only pay commissions on each deal sold. Local merchants also benefit from exposure on a highly trafficked website and to tens of thousands of email subscribers in their geographic area. On a per click model this would normally cost the business thousands of pounds. Although merchants need to put together an offer to generate interest, the cost per new customer has been proven to beat all other forms of traditional marketing by an order of magnitude.

Who buys daily deals and what’s in it for the merchant?

There are a number of different group buying sites, some general and some specialising in health and beauty or a specific audience. Contrary to detractors’ belief that group buying sites are only used by people on tight budgets or who would have shopped there anyway, the subscriber lists are comprised of affluent, socially networked professionals. They have higher than average income and enjoy going out, want to learn about new things to do in their city and like to get a great deal in the process.

In addition, the subscribers are social media savvy and use platform such as Twitter and Facebook to let their friends know about a great deal they’ve just purchased or plan to buy if their friends join them. This creates a huge word of mouth buzz about a business over a 24 hour period. Some of the group buying sites even offer free deals or rewards to those subscribers who recommend a deal to their friends who then purchase it. If they like the restaurant, spa or venue, they will keep coming back and spreading the word online and offline.

How to pick the right site for me?

Group buying has become a very successful marketing tool for many businesses. Below are a few tips on how to pick the right group buying site for your business:

1. The group buying site has invested money and energy into building quality lists in your city.

2. The group buying website has been running deals successfully in your city or others.

3. There is dedicated team on the ground that will help you make sure you get the exposure you seek and have someone to call if something is not to your liking.

4. Checkout past deals to see if you would like to be in their company.

5. Check the terms and conditions carefully to ensure you’ll be paid promptly for all the sales not just vouchers redeemed and that you have a way out in the future and are not promising exclusive rights to one group buying operator.

While this is still relatively new in the UK, group buying has already attracted the attention of many successful brands including the Marco Pierre White restaurant group and London Zoo. If you have wondered how to acquire new customers quickly, harness the power of social media and get your brand into email inboxes of tens of thousands of local residents, group buying could be the way to go.

It’s good to feel part of something big – so here’s the latest 15 minute inspirational TED talk – from popular science author Matt Ridley (The Red Queen, The Origins of Virtue, Genome, The Rational Optimist) at Oxford University – on “When Ideas Have Sex.”

So what does ‘the sex life of ideas’, whatever that is, have to do social commerce? Well, Ridley argues convincingly that the more trade-based interactions a society makes, the smarter, more advanced, and prosperous it gets.  When commerce happens, it’s not just products and money that get exchanged, but ideas embedded in those products get exchanged too. And as these ideas get exchanged, they get recombined and evolve, like cultural genes – driving technology, innovation and even knowledge forward.  And with digital technology democratizing trade – allowing more people that ever to trade online on social commerce platforms such as Etsy, Ebay and Amazon, more people are contributing to the collective brain, and participating in the evolution of humankind. Cool.

If sex is about exchanging bodily fluids to drive biological evolution, then social commerce is about exchanging ideas to drive social evolution.

For further reading, check out Ridley’s Wall Street Journal Saturday essay - Humans: Why They Triumphed

Over at Gigaom, ShinyOrb co-founder Elizabeth Yin has posted a useful primer on social shopping; ”e-commerce sites that facilitate interaction among customers as part of a shopping experience“.

It’s jargon free, succinct and practical.

Elizabeth breaks down social shopping into three buckets

• Group shopping sites – online equivalent to Costco such as Groupon, LivingSocial and BuyWithMe
• Shopping communities – sites such as Kaboodle, Stylefeeder, and Polyvore that connect shoppers with similar tastes
• Recommendation engines – such as Amazon reviews, Bazaarvoice and PowerReviews, online equivalent to asking a fellow customer in store for a recommendation

In Elizabeth’s view, social shopping is hot right now because

1. So many people have an online identity
2. Social graph APIs and tools have become available and easy to use

Elizabeth identifies a number of business opportunities in social shopping

• For group-buy, focusing on niche verticals (travel, wedding photography, ultra-local),
• For shopping communities, to break out of fashion with sites focused on other categories (travel and (adverture) sports), using marketplace technology (such as listia), and connecting real friends (using Facebook social plugins) such as on Elizabeth’s bridal site ShinyOrb).  Wherever there is a club in real life, there is an opportunity for a shopping community (nice).
• For recommendation engines, friendcasting (our term) –  reviews from friends, via Facebook, Blippy, Swipely etc, rather than reviews from strangers

We really like Elizabeth’s succinct, practical and pithy definition and categorization of social shopping – in our view the definition is far better than both the existing Wikipedia definition – doing shopping in social networks like MySpace (paraphrased), or indeed our definition – a subset of social commerce in which people share the act of online shopping together.

And Elizabeth’s categorization of social shopping is inclusive enough to hold most of what is taken to be not only social shopping but social commerce too. Whilst there may be more ways of using of social media to assist in the buying and selling of products and services than than the facilitation of interaction among shoppers (for example using social media to decide whether to go shopping or what to buy with non-shoppers – it does cover most of the bases.  If you like Occam’s razor – you’ve gotta love Elizabeth’s primer.

• Group Shopping <- ‘Social Shopping’
• Shopping Communities <- ‘Forums & Communities’
• Recommendation Engines <- Ratings & Reviews, Referrals & Recommendations, Social Media Optimisation (and Social Ads and Apps?)

The one thing we’d suggest tweaking is the exclusive focus on e-commerce sites, we’d be keen to include all digital tools that facilitate interaction among customers as part of a shopping experience – whether online or offline, not just e-commerce sites (i.e. mobile tools for in-store retail).

From this perspective, social commerce and social shopping can be seen as, if not synonyms, then two sides of the same coin – one from the shopper perspective and the other from the vendor perspective.

• Social Shopping – facilitating [digital] interaction among customers as part of a shopping experience (in order to improve the shopping experience)
• Social Commerce – facilitating [digital] interaction among customers as part of a shopping experience (in order to improve sales effectiveness)

This is of course very different from Stephen & Toubia‘s differentiation (in the JMR) of social commerce as online networks of vendors and social shopping as online networks of shoppers, but perhaps more in adequation with how the term is used today.  Thoughts?

The future of digital marketing is…

Well, the good folks over at Econsultancy have posted presentations answering just that question from their “The Future of Digital Marketing” conference with a wondrous range of insightful speakers, held on 16th June 2010 in London, UK.

Social and mobile – including social and mobile commerce – figured prominently, as you might expect.

Econsultancy subscribers can download decks for free, non-members can purchase the decks – but for the time-pressed here’s a speed summary of the presentations (250+ slides) for you; we’ll be using it as creative stimulus in digital strategy workshops – hope you find it useful too.

(NB - the keynote deck from Gerd Leonhard has found its way onto slideshare – and is embedded below, along with several related decks).

The Future of Digital Marketing is… Social Commerce

Rowan Gormley (Naked Wines)

• Naked Wines is a wine buying club launched 18 months ago (Dec 08) and has recruited 80,00 customers, 25,000 of whom are investing £20 a year to help Naked Wines help 22 independant winemakers set up/build businesses. Naked Wine ships 35,000 bottles per week
• Naked Wines has a ’sell before you source’ business model (customers commit to buying, before wine is produced) to secure better prices – no marketing costs needed – Naked Wine brand works as intermediary between wine lovers and wine producers – organizing group-buy deals
• Customers (buying club members) get award winning wine at 50% cost of standard retail
• Gets customers to buy not-yet-produced none-label wines by allowing them to select wines to be sourced, and decide the real selling price – a real buying club.  Business developed into customer angel investor model, investing in winemakers
• Key to success is reviews and recommendations – expert reviews, user reviews (% who would buy this wine again), and personal shopping recommendations (based on customer profile/feedback)

The Future of Digital Marketing is… M-commerce

The Future of Digital Marketing is… Mobile

Nick Gee (Autotrader)

• THE high growth channel
• The next phase is mobile integration – integrating web with overall digital strategy
• The technical challenge is dealing with multiple mobile platforms – necessary to ensure distribtion and usage
• Media sites can use mobile apps and sites to drive traffic to advertisers sites with short codes and promotions

The Future of Digital Marketing is… Open APIs

Angela Maurer (Tesco)

APIs offer

1. More opportunities for collaboration with suppliers and 3rd parties – e.g. Kellogg’s Special K site -> Tesco ordering
2. External developer community creating apps for customers -> Facebook/Mobile shopping assistants
3. Easier & faster development of prototypes for testing with customers

Tesco, the leading UK supermarket, is seeking to 1) Enhance API functionality, 2) Create APIs for its other businesses, and 3) Support the developer community to deliver new and compelling applications for customers

The Future of Digital Marketing is… a Technology/Data Mashup

Matt Isaacs (Essence)

• So much innovation in the space, so many possible futures (The Cloud, Semantics, Android, IE9, Statistics, Mashups, Mobile, Social sphere, Attribution, User targeting,  HTML5, Location-based Devices, Gaming consoles, Ad exchanges, Path to conversion, 3D Set top boxes, Dynamic ads, IPTV, Channel interaction, Optimisation, Mapping, APIs, HD video, Augmented reality, Test and learn, Data visualisation, Widgets, RSS Feeds, Apps
• “Don’t confuse the art of the possible with the art of the profitable.” David Tansley
• Three trends will pattern the future of digital marketing
  1. Mobile Devices: Tired of hearing about the “Year of Mobile” But it is coming, coming soon and it’s not about phones: The Mobile Internet – Any service, Any time, Anywhere, On any screen.  Marketers challenge – platform fragementation
  2. New Experiences: Digital marketing will be about connecting information that’s otherwise not connected to create new possibilities (mashups)
  3. Advertising Shift: The major shift in advertising from being predominantly TV focussed to something new has yet to come, but the the economic drivers are compelling:
  • • Imbalanced economics (CPM rates – Internet $2/3, cable TV $12, newspaper/magazine $16, broadcast TV $28).
    • The rise of Facebook Marketing (in UK Facebook has 30% of display advertising share), but privacy issues will have to be addressed
    • Rise of display exchanges (doubleclick, OpenX) means advertising media market will become more like financial exchanges
    • Twitter advertising is new and uncertain (promoted tweets, trends)
    • Digital advertising analytics tools are there already and will become more powerful – path to conversion/Attribution tools,

The Future of Digital Marketing is… The Cluetrain Manifesto

Jesse Engle (CoTweet Social Inbox for Teams)

• 10 years old, and on trend – markets are indeed conversations (on the social web) – Conversations among human beings sound human. They are conducted in a human voice. Social Media is conversational media
• There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone (BP)
• The Rise of Social Social CRM – for Marketing insights, campaign response, tracking, social event management) Sales (Sales insights, sales response, lead generation), service and Support (insights, response, p2p self-support), Innovation (insights, ope R&D), Collaboration (insights, enterprise collaboration, extended collaboration),  Customer Experience (seamless customer experience, VIP experience)
• Four emerging trends will define the future of digital marketing
  1. Social Integration: Integrating social to email, sites, and mobile
  2. Blurring of earned and paid media (promoted tweets (Starbucks), trends (ToyStory)
  3. Geo-targeting
  4. Leveraging social influence (Prospects, Customers (Advocates/Others), Employees (Approved/Field), Brand Team (MKTG, PR, CORPCOM, execs)

The Future of Digital Marketing is… Distributed & Decentralized

Gerd Leonhard (The Futures Agency)

• Mainstream broadband adoption (mobile and fixed) means 30% of all advertising will shift to digital (interactive, social, mobile and video) in next 2/3 years
• Connectivity + Mobile + Social is changing the very definition of Marketing and Commerce: Social Commerce is Distributed Commerce (e.g. Disney selling ToyStory tickets on Facebook)
• In a networked world, brands will learn to become networked brands - Distributed & De-centralized Production, Creation, R&D, Marketing, Distribution, Selling and Public Relations.
• Non-networked brands will become invisible: Links are the new currency of marketing.
• Social media, virtual events and mobile channels are emerging as new channels for lead generation and customer acquistion
  • North American companies using these channels for marketing who have acquired customer by a blog (B2C 57%, B2B 43%), Facebook (B2C, 68%, B2B 33%), Twitter (B2C 51%, B2B 38%), LinkedIn (B2C 26%, B2B 45%) (Source Hubspot State of Inbound Marketing 2010)
• The Future of Selling will include: Involving the Users (Fiat Mio), Giving Something (Pepsi Refresh the World), Personal Selling (Etsy Marketplace)
• We will see a complete Online Convergence with Meatspace
• Filters will become ever more important

The Future of Digital Marketing is… Game-Based Marketing (& ‘Kindness Marketing’)

Vincent Sider (BT)

• How do you get people to do stuff they don’t want to do (like learn about new products, buy new products)?  Turn it into a game (cf. Game-Based Marketing).
• Humans are reward-based creatures – and games are designed to be rewarding. Applying game mechanics to the customer journey, particularly product/site/brand discovery – with levels, engaging fun challenges, and rewards can be very effective.
• Farmville as creative stimulus for next generation digital marketing – Users earn currencies by doing actions – logging in, staying longer, recruiting friends, completing missions – users can purchase ‘currency’ without leaving game, redeem for (virtual goods – decorative (to express identity) or functional (for better experience) (90% of Zynga’s $200m revenue is from virtual goods)
• Example: BRAVO (CBS), has partnered with cosmetics retailer Sephora to reward Foursquare users who unlock the Bravo Real Housewives badge, with $100 Sephora gift cards at select stores in New Jersey and New York over the next four weeks
• Example: NBC “Fan It’ leverages the presence of show fans on social networks and incentivizes them with points for engaging with content — i.e. watching videos on NBC.com, Liking shows, chatting and recruiting friends. Points can be redeemed for goodies like NBC merchandise, show previews, virtual goods, badges and sweepstakes entries.
• Marketers will learn to use engagement game mechanics and attention triggers: Engagement: Collecting, Points, Feedback, Exchange, Customization. Attention: Allowing people to feel important, to get better stuff, to achieve things (small steps for levels), build relationships and reciprocity, feel good about themselves, express themselves, feel superior, get instant gratification.
• Marketers, like game designers, will learn to ask two key questions: Is it fun? Can it be monitized?
• The shape of tomorrow’s digital marketing team
  • Actions: Marketers define desirable actions
  • Story: Story designers in collaboration with marketers define the story according to the targeted behaviours
  • Mechanics: Designers setup the business rules for achieving the desirable actions
  • Sink/Source Marketers design business rules for sinks and rewards, badges & prizes
  • Assets Design Designers create assets for trophies, virtual goods, widget skins, and notifications
  • Service Design Developers instrument your site and embed widgets and other data.
  • Conversation: Marketers talk about the offering, focus on long-term, social results
• Expect a future where you can experience points from a toothpaste company for brushing your teeth. Earn points from health insurance companies for walking to work instead of driving. And even trade brand points – ’30 toothpaste points for 25 of your cereal points’.
• Expect a massive adoption of game mechanics for web design and engagement marketing as well as explosion of sensors and tracking mechanisms make casual games a little less casual, and reality augmented.
• This future will be dependent on marketers promoting actions that are kind – the social web creates a visible correlation between customers behaviours and actions suggested by the company. People will judge the business to the actions that they incentivize.
• To this end, Kindness will be the new ultimate killer app.