Enter a new generation of online financial service startups such as Azimo ($460K funding Jan 2013) that aim to cut the cost of sending money and make the customer experience smoother using native mobile apps and harnessing digital connections of Facebook.

A UK startup competitor to TransferWise and US counterpart Dwolla, Azimo makes signing up to its service easier by inviting them to do so their Facebook account.  They can then use Facebook’s messaging service to send money to Facebook friends; all for a fee of 1% – maximum (GBP15 ($23)).  Unlike Dwolla, says the FT, Azimo offers international transfers; recipients can route incoming funds to a bank account or to 150,000 payout locations around the globe.

As we put together a conference presentation for next month on how to make social media pay in the financial services sector, a theme is emerging; social as a service.

Sure, using social media for marketing and sales (customer acquisition and retention) can work, but real opportunity appears to lie in using social media (connections and functionality) as a service, in order to offer customers a better experience and service.  Social as a service.  That’s the future of social in financial services, and social commerce.

A new holiday trends shopping report from Yesmail Interactive says that, due to the sluggish economy, many shoppers may act similarly Scrooge-like. According to an eBay/Edgell Network report, retailers are looking at a 5% decline in Thanksgiving sales due to showrooming; the use of stores as showrooms to research, view, touch or try, but then buy elsewhere wherever the best value can be found.

In addition, according to the Yesmail research, there will be a lot of procrastinators (51 percent) making their holiday purchases during November and the first two weeks of December. However, a full 24 percent will wait until December to start their shopping.

The bright side to this Scrooge-like Christmas – 7 out of 10 surveyed consumers plan to spend the same or more than they did in 2011, thus continuing the trend from last year when overall holiday sales increased by 4.1 percent.

Mobile: Santa’s Little Helper

The report states that 75 percent of the people it surveyed owned a smartphone or tablet device, and that 41 percent of those have made a purchase as a result of an email promotion viewed on their device. (Yesmail is an email sending platform provider.)

But the real key where mobile is concerned – at least this year – is not that consumers use mobile devices to make a purchase, but that they use them predominately to comparison shop.

• 62 percent of surveyed mobile shoppers have used their device to compare web prices to in-store prices while in- store (at the point of purchase).
• 64 percent of surveyed mobile shoppers have used their device to visit a company’s website to learn more about a product.
• 48 percent of surveyed mobile shoppers have used their device to look up a product review while in-store in order to make an informed purchase decision.

Get Social This Year

Brand interaction on social media is growing, says the report, and social can have a big impact on consumer purchase behavior this holiday season. It found that:

• 50 percent of consumers are are somewhat to strongly influenced by social media when making an online purchase.
• 42 percent are somewhat to strongly influenced by social media when making an in-store purchase of consumers have
• 34 percent purchased a product as a result of a promotion they saw on social media.

Regarding social, the report stated that the “influence of social commerce on in-store purchase decisions calls for tighter integration between social media and in-store promotions.”

During the holiday season, social channels should be used to promote various sales events, in-store events such as sampling or flash sales. Promoting this information to a brand’s social channel followers creates a sense of exclusivity and urgency, recommends Yesmail.

The report further recommended that, since most consumers prefer to shop in-store mainly during the weekend, the use of social media to influence in-store sales should be concentrated in the latter part of the week, such as Thursday and Friday, in order to drive in-store traffic.

In fact, Yesmail has a lot to say about the use of social commerce, and I would highly recommend taking time to review its findings and subsequent recommendations.

Let’s hope that Black Friday doesn’t bring the blues to retailers, but even if it does this report provides hope that shoppers will shed their Scrooge-like behavior and start spending to an even greater degree than they did in 2011.

Today’s article is sponsored by Payvment: The #1 Social Commerce Platform

According to a recent PriceGrabber survey, 31 percent of consumers already have shopping-related apps on their smartphone, and 82 percent of those consumers plan to use those apps to help save money when purchasing holidays gifts.

One such app comes from coupon supplier RetailMeNot.

You are perhaps familiar with Shopkick, the app that recognizes when you cross a retail store’s threshold and begins rewarding you with loyalty points, called “kicks.” (If not, we talk about it here and here.)

Well, RetailMeNot has just released a new version of its iPhone app that performs a similar function. The difference is, rather than just focusing on individual stores, it’s also designed for use in shopping malls.

Just by entering a mall, you are sent a list of coupons directly to your iPhone. The app also allows people search for coupons on a per-store basis and even provides Passbook support, so coupons can be added to make mobile redemption even easier.

John Faith, senior vice president of mobile at WhaleShark Media, the company that owns RetailMeNot, said in a New York Times article, that “an average user will see 38 coupons from 25 stores upon stepping near a mall.”

RetailMeNot’s app uses a technology called “geo-fencing,” which is like a virtual perimeter drawn around an area. When someone using the app steps into that perimeter, the app knows it and starts presenting relevant deals.

It’s Still the Economy, Stupid

With the elections now behind us, the fate of the economy is still in question, and that has to affect consumer buying habits this holiday season.

The most recent WhaleShark Media trend report suggests that “deal-seeking behaviors among holiday shoppers will continue to grow,” and that “more than 90 percent said that they are more likely to make a purchase when a coupon or deal is available.”

That being the case, results of the aforementioned PriceGrabber survey should come as good news to the folks at RetailMeNot. It found that, when consumers were asked what types of shopping apps they plan to download for holiday shopping, coupon apps were the most popular.

Today’s article is sponsored by Payvment: The #1 Social Commerce Platform

One symptom of this disruption is – if course – “showrooming”; the use of physical stores as showrooms to research, view, touch and try, but then buy wherever the best value can be found (usually elsewhere, online and with the aid of a smartphone).

Showrooming has been getting a lot of press, but don’t mistake what’s a mere symptom for the underlying economic cause – SoLoMo technology give shoppers the two things they need to behave rationally (get the most value for the lowest cost); information and options.  The result is the inevitable rationalisation of retail.

How will you survive in a world of rational retail?

Here’s a useful primer on SoLoMo technology for retailers in an easy-to-digest infographic form from Monetate.

Both Solavei and Giff Gaff are (relatively) new virtual network operators offering consumer mobile phone services, and both have innovative but different social commerce models. Solavei operates in the US, and Giffgaff in the UK:

• Solavei: $49 sign-up fee, and $49 per month for unlimited talk, text and data on T-Mobile’s nationwide network.  The social commerce twist?   Solavei uses social (peer-to-peer) selling to drive new customer acquisition: a networked referral program means that for every three new customers you sign up you receive $20/month, and for every three customers they sign up you receive $20 too.  So recruit three “trios” who each recruit 3 “trios” and you’ll be receiving $240 per month.  Yep, it’s MLM (mutli-level marketing) There are tweaks, with significant added bonuses for the total count of “trios” in your extended network beyond your recruits and their recruits, but you get the idea.  Admirers will call this AT&T’s friends and family – one of the most successful word of mouth campaigns, ever, reinvented for a social networking age.  Detractors will call it pyramid selling. 20K subscribers in first month.
• Giffgaff: Free sign up and $25 (£15) per month for unlimited text and data, and 400 minutes talk on 02 (Telefonica) nationwide network.  The social commerce twist; Giffgaff uses social (peer-to-peer) selling to drive new customer acquisition and customers provide each other with customer support.  Subscribers can order free SIM cards to send to their social network with an invite to join; and for every SIM activated, they receive $8 (£5) into their PayPal account or nominated charity.  In addition, customers service each other by answering queries and trouble-shooting and are financially rewarded for doing so. Currently Giffgaff has approx. 100K subscribers.

With one foot in Miami, and the other in London, it’s interesting to compare the two styles;

• Solavei looks and feels more sales-led; whilst Giffgaff is more community oriented.
• Solavei subscribers use the service and sell the service, whilst Giffgaff subscribers use the service, provide the service, and sell the service.
• Solavei is more social sales, and Giffgaff is more social business.

From a psychological perspective, Solavei has more appeal as a get-rich-quick-and-easy scheme with the promise of big rewards (although partially offset by reputation and experience issues with MLM)), but by employing subscribers as a customer sales force, Giffgaff is perhaps more psychologically “sticky” – subscribers are the company, rather than simply selling it, so are more likely to stay.  With less of an extrinsic incentive to participate, Giffgaff member are paradoxically less likely to defect. We’d predict that Solavei’s initial growth will be phenomenal, but customer tenure will be short – whereas Giffgaff will have a slower growth, but customers will remain longer.

What do you think?  Is your social commerce more Solavei or Giff Gaff?

As interviewees, we got our hands on an advance copy.  Contact Nurun’s Toronto team direct for the full report, and/or subscribe to their future of retail email list and blog; but here’s what you need to know…

Six trends are shaping the future of retail, many with a social angle

• The Socialisation of Retail (Social Product Discovery, Consideration and Evaluation). Social influence has a major impact on what we buy, and new retail technology helps retailers harness this. From social recommender systems to social window shopping sites such as Pinterest
• PR with Sales (product placement morphs into content and commerce). The tried and tested PR strategy of sending new merchandise to editors and journalists in the hope they’ll mention, discuss, or review it is being taken in-house. Retailers such as Gilt Groupe and Zappos are becoming content creators, producing magazines to promote their wares
• Integrated Omnichannel In other words, ‘have it your way commerce’ offering a seamless experience between the silos formally known as channels. So shop online in-store (via mobile) or shop in-store (store-feeds) and pick up anywhere at home, in-store or at-work.
• Global Reach, Local Appeal (The New Geography of Merchandising) Smart retailers are using e-commerce to move beyond national and regional boundaries, but are also tailoring what they sell to local markets.  Columbia Sportswear has recently begun initiatives to localize site messaging, product assortment, pricing and promotions (Florletta, 2012)
• Privacy/Value Tradeoff Consumers value their privacy, and they value deals. Smart retailers are getting the balance right, offering more value to consumers who are willing to trade their privacy for deals
• Sophisticated Frugality Smart retailers are helping consumers get a bigger bang for their buck, not necessarily by dropping prices, but through private label options, bonuses and preferential terms.  Demand-led pricing and volume pricing (with consumers clubbing together to buy in bulk) are also helping consumers shop smarter