SOCIAL COMMERCE 101

Social Commerce Accounts For Nearly 35% Of Total Of Online Transactions
Social Commerce Accounts For Nearly 35% Of Total Of Online Transactions

ALL COMMERCE IS “SOCIAL,” SO IT’S BEST TO GET A GRIP ON IT

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Way back in 1999—a thousand years ago in Internet years—a writer and designer, named Darcy DiNucci coined the phrase Web 2.0. This marked the beginning of the web as a social experience, eventually altering commerce so that today customers can be brand advocates who play a crucial role in building your business.

Popular Social Platforms Represent Untold Potential Profit
Popular Social Platforms Represent Untold Potential Profit
You already know that your customers are talking about your brand on social media platforms, posting images from your product pages to Pinterest, and checking reviews. The brick-and-mortar and virtual commerce experiences have become so intertwined that customers sometimes make an online purchase while standing in your store. Today, these social behaviors are integrated into every aspect of the way we do business and have become part of the business model. We can break down the purchase interaction in three distinct phases: pre-purchase, mid-purchase, and post-purchase.

Throughout each step of the purchase cycle, customers are socializing. In our increasingly digital world, offering ways for our customers to stay connected socially as well as digitally becomes increasingly important.

Let’s break down the purchase into its three phases:

Pre-Purchase
The rise of discovery platforms, such as Pinterest, The Fancy, StumbleUpon, Chill (for videos), Trippy (for travelers), and many more, have cemented the consumer behavior of engaging in social interaction before (sometimes way before) the actual point of a purchase. This behavior has also been called reverse-showrooming; it has the capacity to drive users from discovery sites to stores.

Beauty and makeup tutorial videos on YouTube account for 14.9 billion views. Brands have a long way to go: A paltry 3 percent of these videos are produced by the brands themselves, meaning that 97 percent of this content comes from customers and fans. YouTube currently has 45,000 beauty channels not run by brands. (Source: Pixability)

Mid-Purchase
When searching for rooms on Hotels.com, customers are alerted to how many other people are searching that city or looking at that same hotel’s page. It creates a sense of urgency and community. Trending products feeds can show your customers what’s being pinned, posted, shared, and purchased—as it happens.

This real-time user engagement can help morph a website from a static page into an engaging platform for socializing as well as shopping.

Post-Purchase
In many ways, the social aspects of shopping begin in earnest after the point of conversion. Many brands now offer shoppers the ability to share their purchases in real time; seconds after the purchase is made, entire social graphs have been alerted.

Haul videos are a phenomenon that has skyrocketed in popularity in recent years; users upload simple videos of themselves sharing their latest shopping “haul,” including stores and prices. The customers making these videos are not celebrities or even experts; one 10-minute haul video has 1.7 million views. It features a young woman sharing what she bought on a shopping trip and includes her telling the camera that she doesn’t consider herself a stylish person.

There are over 800,000 haul videos on YouTube; they have more combined views than the insanely viral “Gangnam Style” video and its imitators, which have received 1.8 billion views. It’s difficult to imagine what the cost to brands would be to produce this amount of content themselves.

Offering a different perspective are companies like Olapic, which offers a visual commerce platform that aggregates and curates social content for brands. You know that your customers are out there creating content about your brand; these tools give you the power to feature and brand that content. Their installment for COACH, called “#COACHFROMABOVE”, is a great example; see it live at http://coachfromabove.coach.com/.

Along every step of the purchasing cycle, from discovery and inspiration to uncrating and styling, cross-channel social interaction is the name of the game.

Best Practices for Creating and Driving Social Commerce Experiences

As the increasingly social nature of the Internet continues to alter the world of commerce, the most recent changes have seen the consumer take a more active role—a partnership role—in producing and consuming a brand’s content or services.

online-reviewsIn the past, user testing held a prominent place in many brands’ product development roadmaps. Today, consumers essentially are driving product choice and design through real-time interaction with each other and with the brand. In the same way, consumers are participating as full partners in providing services and products offered by brands. This can be a two-edged sword, for individuals rely more the recommendations of friends as part of the deciding process, and Reviews are a major ‘go-to’ indicator that fills this need. It is important to effectively manage online Reviews, and to continue to invite consumers to share their satisfaction.

The new phenomena of social production and social consumption is helping brands explore how they are changing the nature of commerce and finding new paths to success.

Social Production

T-shirt company, Threadless, was one of the first social production websites; started with only a thousand dollars, the company has grown into a 30 million dollar design powerhouse. They achieved this with little risk: The model revolves around users uploading designs to be voted on by other users; top designs are put into production. The company doesn’t have to guess at what their customers want; they just have to listen; they already have a fanbase for each design. Social features are built in at every level of the site; one search filter allows customers to shop by “Popularity.”

It’s not necessary, however, for a business to be built entirely around the social production model. Small upstate New York-based supermarket chain, Tops Friendly Markets, wanted to promote its new Carry Out Café pizzas, so they designed a contest for its Facebook page. Employees submitted their favorite specialty pizza designs, and Facebook fans voted (and received $1 off coupons for doing so) for the top three, which then went into production.

Social Consumption
We’re in the midst of economic turmoil, and we all share increasing concerns about the environment. These factors combined with our need for sharing have precipitated the rise of social consumption. Some call this the sharing economy; others have called it rentership society or non-ownership. Blame it on Netflix.

Using the web, it’s now possible to share eBooks with friends, find a stranger’s couch to sleep on, or borrow a neighbor’s ladder. This behavior has become integrated into business models as well. Customers can rent textbooks, prom dresses, nail polish, fine jewelry, tools, and pets.

Special occasion dress rental site, Rent the Runway (named a “Top 50 Website” by Time Magazine in 2010), has turned sharing clothes into what is estimated to be a 200 million dollar business. Customers search by color, occasion, and date available and rent the dresses for four to eight days, at a fraction of the price of a new dress. The site offers free second-sizes and sells dress insurance; it is interesting to note that Rent the Runway houses the largest dry cleaning facility in America.

Conclusion
In a volatile economy with a strong culture of sharing, companies are not being intimidated by customers’ changing demands, building social aspects into every piece of their businesses.

All parts of the selling cycle benefit from some type of social engagement. You’ve already dipped your toes into the waters of social selling; these examples should give you some inspiration and ideas to help you take things to the next level.