BV White Paper- Social Commerce Trends 2010

8/8/2019 BV White Paper- Social Commerce Trends 2010

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Social Commerce Trends ReportKey takeaways from Social Commerce Summit 2010

April 19-21, 2010


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Each year, the Social Commerce Summit

brings together innovative brands and thought

leaders to share best practices and trends in

social media.

At the 2010 event held in Austin, Texas,

Mitch Joel, author of Six Pixels of Separation,

explained that social media is the rst and

only real medium where users create their own

experiences. Its the rst channel where brands

have to force themselves in, because users

are in control, so they must invite them in;

my Twitter experience is different from

your Twitter experience. Mitch is excited

because marketing is nally back to being

about real interactions between real people.

While companies are still in control of their

brand, the amplied consumer voice is equal

to the brands voice.

The customer voice is a form of viral media,

meaning that it evolves naturally not in a

forced or branded way. Douglas Rushkoff,

author of Get Back In the Box, rst coined the

term viral media, which was meant as a type

of media or message that evolves naturally,

is invited in by users, and replicates just like

any type of information a user wants to share.

Its called viral because, like a virus, it feels

natural, like its a part of the eco-system, and

replicates as part of the natural system of

sharing. A virus gets invited into the body

because it looks and acts like a normal cell,

then it replicates just like a normal cell.

Today, consumers use social media in many

ways, including making a variety of purchasing

decisions from buying clothing and electron-

ics to selecting insurance or a new bank. This

paper uncovers the trends from this confer-

ence and includes insights from some of the

thought leaders who attended.

Contents

Most social commerce begins with experimentation.............................................................................3

Consumers are closer than ever to the people who actually

create the products they buy and use...................................................................................................4

ROI varies, but it must always be measured..........................................................................................5

Social commerce can and should spread throughout

the entire business and across all channels...........................................................................................6

Search informs much of how people shop online..................................................................................6

Digital Millennials are changing shopping..............................................................................................8

To be successful, make the most of your unique inuencers................................................................9

The potential downfall of social media? Privacy..................................................................................11

What will social commerce look like in a year?...................................................................................11

Your next steps.....................................................................................................................................11

Sources and contact information.........................................................................................................12


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Most social commerce begins

with experimentation.

Bazaarvoice CMO Sam Decker encourages

organizations to Be the conversation. Your

brand and the products you sell are a reectionof the conversations that are happening out

there. He outlines three roles companies

should take to facilitate conversations and

use them to improve products.

Be like a parent. Parents have commitment,

perspective and give guidance. Try new things,

learn, and realize that today is just one step in

your evolution. Look at results as a moment

in time. Focus on gathering data and content

from your users.

Be a good host. Make it easy for your

guests (consumers) to share their opinions

and meet others like them. Keep them

engaged, which will bring more people to

the party (your site). When you facilitate

conversations online, youll help people

make good purchase decisions, creating an

asset that builds over time. This is different

than what most traditional marketing does;youre engaging people to help themselves

and others.

Be a prospector. Look for gold. Start with

the basic, business-driving metrics such as

number of site visits driven by user-generated

content, sales conversion, and average order

value. Then use customer participation to go

beyond your site ask for customer stories

via Facebook, or put ratings information on

in-store fact tags. Spread this content toshoppers wherever they are, to help them

regardless of where and how they shop. This is

where true transformation occurs beyond the

walls of your online community.

Social commerce evolves, according to

Manish Mehta, VP Social Media and

Community for Dell. He suggests there are

ve phases of social commerce evolution.

Experiment. The social web originally began

as an experiment.

Product. Soon, products were created to

facilitate social media, such as MySpace,

bulletin boards, forums, and more.

Application. Companies such as Dell attached

social to their products by adding customer

reviews to products at dell.com. They wereable to measure increases in sales and

other metrics with this application of social

media, so they continued to build out social

communications throughout their business

Build-out. Once Dell gathered reviews,

they shared them with other divisions

to improve customer service and

product development.

Connect and scale. Today, Dell and otherbrands work to connect all their social inputs,

wherever consumers want to participate.

They combine all inputs to build relationships

and commerce, gain further insights, and

understand the entire customer experience.

Bazaarvoice CMO Sam Decker advises brands

to be good parents, hosts and prospectors.


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In a similar way, golf and tennis retailer Golf-

smith learned a lot on its journey into social

media. When they launched their Facebook fan

page in 2008, they didnt focus on selling; their

page began as more of a brand and customer

service play. When they responded to custom-er complaints on Facebook, Golfsmith learned

that those customers were more likely to come

back to Golfsmith.com.

Today they use Facebook and Twitter for

customer feedback. For example, in 2009 they

asked customers to vote for their favorite de-

signs for holiday gift cards, and they have also

asked customers if they would use a mobile

application, to help Golfsmith determine if theyshould create one.

And experimentation goes beyond the internet.

Googles Sameer Samat noted that brands

should also experiment with mobile to let

consumers search for and nd specic infor-

mation, whether theyre in a store or on the

road. Google has seen an exponential jump in

Google shopping queries from mobile devices.

Consumers are closer than

ever to the people who actually

create the products they buy

and use.

Technology, media and branding create

a problem for people who want to make

companies better; they distance companies

from real consumers, said Douglas Rushkoff,

and the mythology of a brand means that

products dont have to be as good as they

used to be. In social commerce, where

consumers can share their experiences directly

with other consumers without the mythology

of branding between them consumers must

be close to the products and the people

actually creating products. With the use of the

Internet today, those who produce products

dont have to be huge corporations; they can

use social commerce to get input from, buyfrom, and sell to others.

Rushkoff points out that social media

promotes honesty and peer-to-peer

communication, letting users exchange

products, goods and services and opinions

directly amongst themselves. This actually

takes us back to the times of the real bazaar

where trade and commerce were done face to

face, among individual people not between

faceless corporations and consumers.

Social media speaks to the geeks, he says.

We know Google has the smartest, craziest

people working for them because their social

media strategy shows us the geeks at the

middle. Social media is a shift from technology

and media thatseparate you from consumers

social media brings you closerto the people

who actually use your products.

Rushkoff advises keeping the people who

create products close to the people who

use them. Marketers have to embrace and

encourage their true believers far beyond just

people who recommend your products. These

must be true believers of your culture not

your brand culture but youractualculture.

For example, when Urban Outtters customers

ask questions about specic products online,

often the product designer will respond directlyto the question. In addition, team members

from Best Buy and Dell both said that they

refer to customer reviews when developing

new products or improving existing ones.


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ROI varies, but it must always

be measured.

Just because social media is a new way of

communicating doesnt mean it shouldnt be

measured. Like any promotional or marketingtactic, objectives must be set and tracked

and they should ultimately track to bottom line

company goals.

Golfsmith tracks hard impact (dollars) and

soft impact (things like branding, staying

top of mind, which are harder to track) to

determine which social media they continue to

pursue. For example, they track all links from

Facebook and Twitter and look at customer

interactions on their site. To effectively track

soft impact, they developed a score card

which measures trends for trafc, sales, likes,

posts, customer services, mentions, retweets

and more across all their social networks.

Golfsmith recommends that brands tag all links

to user-generated content to understand how

people who read or contribute user-generated

content interact with the site. For example,

Golfsmith found that those who interactedwith customer ratings had 11% higher revenue

per person, a 2% increase in AOV and a 9%

increase in conversion. The most interesting

nding was that a full 18% of all Golfsmith

visitors interacted with customer Q&A or

reviews between January and April 2010.

Douglas Rushkoff contends that the goal of

social media isnt sales; its meant to build the

culture of your industry. It can start with the

culture in your company and extend to the

culture of your customer, your shareholders,

your partners, and your competitors. But,

ultimately, its the culture of the thing you do.

The new organizational chart for a genuinely

social organization puts the most competent

people those who design and create the

products in the middle, but still close to

the customer. Ideally, every employee in the

company stays very close to the customer.

Seth Greenberg from Intuit adds, Give up the

idea that its not about the money. Itis about

the money. People are talking about you online

its happening whether youre involved or

not; its okay to set goals, set a bar.

Manish Mehta from Dell advises companies

not to get head-faked by shiny objects.

Keep your eyes on whats important to your

business, and make decisions from thispoint. He also reminds brands to stay open to

different types of ROI. The ultimate challenge

in social media involves putting a value on

relationships, networks and connections.

Get Back in the Box author Douglas

Rushkoff says product creators must stay

close to product users.


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Social commerce can and

should spread throughout

the entire business and

across all channels.

Social media is unique because anyone can

participate much different than traditional

advertising. For example, Golfsmith gets their

entire organization involved in social media.

They display their entire Twitter feed in their

ofces, so anyone can see what people are

saying about Golfsmith at any time, and the

appropriate people jump in to help customers

in need. Golfsmith also uses customer reviews

and ratings in all types of marketing, and they

have looked at customer support questions

before and after the launch of their online Q&A

solution to understand how online questions

and answers can help them reduce customer

support calls. They also look for new ways

to connect their social networks; today

Golfsmiths Facebook page helps people

engage, then directs them to Golfsmith.com

to make purchases.

Googles Sameer Samat recommends

that brands leverage the entire shoppingecosystem multiply the value of all

content by making it available beyond

the organizations site. For example, Google

Product Reviews Program is the rst program

that lets online brands use their full review

content to directly impact natural search,

mobile, and Google advertising results. Brands

can expose star ratings to searchers, put their

logos next to their reviews, and link directly

back to the product page where a searcher

can buy. This lets the consumer reviews

gathered on the site help consumers who are

still just searching for products.

Manish Mehta from Dell suggests that

companies embed social in every function

of the organization, from sales to product

development. Embed social information and

culture across the fabric of your business; it

shouldnt just be about sales and marketing

get your products, support, and human

resources teams to think socially andtransparently, too.

Search informs much of how

people shop online.

More and more of todays shoppers begin with

search most of them with Google. 87% of

internet users have used the internet to browse

research and compare products in the last

year (eMarketer Report, March 2010). 45%

of in store purchases are inuenced by onlineresearch (Forrester 2009). Sameer Samat,

Director of Product Management for Google,

highlighted three industry trends that drive

Googles strategy: online-to-store shopping,

mobile, and social.

Googles Sameer Samat encourages brands to think beyond their sites.


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Many people are rst researching online, then

going to a physical store to make purchases.

Retailers should think cross-channel;

consumers will interact with any channel

they want, when they want. Many retailers

have divided brick-and-mortar and onlineresponsibilities within their organizations,

which contradicts this trend. The linear

shopping trend is being shifted; consumers

expect a more cohesive experience. Innovative

retailers are tearing down some of these walls,

not letting their organizational chart show up

in their marketing or product development,

according to Sameer.

Aligned with the localization trend is the

promise of mobile: the ability to target users

on a one-to-one basis. A mobile phone is

not shared, its usually on and with you at all

times. It knows a lot about you, your calendar,

your social network, and its location-aware: it

knows where you are.

Currently two thirds of the worlds population

have mobile phones, and smart phones

are expected to eclipse PC sales by 2012.

Googles internal data has shown a 3000%+growth in mobile shopping queries over the

last three years; mobile queries to Google now

exceed online queries in some geographies,

and the number of queries issued to Google

Maps products has grown substantially.

Retailers are testing in-store trafc based on

online trafc in specic DMAs.

Google has added click-to-call ads on mobile

devices, which is good for local businesses

because the phone knows the closest location

for the user, so he or she can call with

one click. Innovations in mobile have only

just begun.

Google realizes that social is just the web

catching up with life. Each minute, more than

24 hours of content is uploaded to YouTube,

and 270,000 words are written every minute

on Blogger. If you do a query on Twitter

every morning on What to wear, youll get

responses every few seconds. Even if a brand

isnt mentioned, participants are still talking

about products.

Sameer suggests making these trends part of

a companys operational plans. For example,

retailers should make sure they have 3G

mobile coverage in all stores, making it easyfor customers to bring information from the

web directly into store aisles. He also suggests

that UPC codes for products be prominently

displayed, so people with mobile phones can

easily scan them to get online information with

new smart phone applications.

However, Mitch Joel believes that, with the

increasing connectedness of everyone, search

will actually be less pervasive in shopping.

He believes people will get information from

friends, then purchase immediately, such as

through their smart phones.

To illustrate this point, he spoke of a dinner

he had with two other bald men. They started

talking about how they shaved their heads,

and one of them suggested a razor that has

a vacuum in it. One of them found it on

Amazon.com via his smart phone and

purchased it immediately.


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Digital Millennials are

changing shopping

Millennials are ages 10-28, and they make a

$200 billion contribution to our economy each

year. They have become our largest generation,

bigger than the baby boomers; there are about82,900,000 Millennials. Resource Interactive

has researched Millennials since 2006 and has

uncovered key dening traits of millennials.

Dening traits of Millennials

Perpetually connected they are neverwithout their phones and are heavily

engaged with social networks.

Multi-tasking and productive they arewatching TV, homework and online at once.

Filtering for immediacy and control theyresmart about marketing and will lter it out.

Self-expressive yet assimilative theyexpress individuality, but its also very

important to be part of the group.

Optimistic and self-entitled theyve grownup in very afuent times until just the last

few years.

Kelly Mooney interviewed a panel of four

Millennials at the Social Commerce Summit,

made up of males and females from age

13 to 23.

Millennials explain that theyre

always connected.

They all prefer Facebook and use it a lot;none of them regularly use Twitter.

They use Facebook mostly for socializing;

they are not sure they would shopvia Facebook.

Privacy could be the downfall of Facebook;

its very important to have control over

who sees your prole.

They send more than 100 texts per day;

they are constantly texting.

In large college classes, students will seehundreds of laptops open to Facebook;

some are watching Hulu.com with one

earbud speaker in, while listening toa lecture.

The recession has had an impact

on Millennials.

The recession has made some of themnot want to buy as much as they did in

the past.

Theyre spending less today; waiting forsales and coupons.

Their parents are giving them less moneythan they did in the past.

The 13-year-old who still lives at homemust work harder to earn money from

her parents now.

Resource Interactives Kelly Mooney interviews four typical millennials.


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None of them have their own credit cards;theyre fearful of credit cards and are more

comfortable with debit cards. If they dont

have the money for something, they dont

buy it. They see their parents have a hard

time keeping up with their credit cards sothey are less likely to use them.

Social media inuences their shopping and

purchase decisions.

They research purchases carefully, askingtheir friends and family, and customer

reviews. Some post questions on Facebook

to their network about products.

If they are fans of a brand on Facebook,too many messages from a brand can

become annoying.

Some of them use Foursquare or Gowalla;they may be interested in getting offers

when they check in.

They have unique interactions with media.

They watch most of their TV on Hulu.com;they only watch real TV for sports.

None of them have magazine subscriptions;they get most of their information and

news online.

To be successful,

make the most of your

unique inuencers.

Social media levels the playing eld,

making consumer contributions as loud as

or sometimes louder than the corporatemarketing message. Dmitri Siegel, Executive

Director of Marketing, Urban Outtters, shared

how this unique brand with independent,

creative consumers uses social media to

take core business values and blow them out

exponentially. According to Siegel, We dont

have a logo. We dont have a style guide. We

have a spirit. Their social strategies reect this

spirit and get their customers involved. Here

are some guidelines Dmitri suggests.

There are some people you want to be

friends with, and some you dont, just like in

any social situation. Urban Outtters started

out by featuring some of its customers on

its blog people they or their customers

want to be friends with. They interview their

customers to draw in others who share the

same lifestyle/style.

But dont be a snob dont ignore people.To get all types of consumers involved not

just the fashionistas or style mavens who

regularly review products. Urban Outtters ran

a contest where consumers submitted images

of love, so anyone could submit something

creative. The company also embraces different

uses of its products photo reviews show

the way people actually wear Urban Outtters

clothes, even paired with clothing and

accessories that does not come from UrbanOuttters. Their products dont really come to

life until people show exactly how they actually

wear it in the real world.

Be a good listener. This is basic. Urban

Outtters gets about 1,500 reviews per week;

they read them and dig into them. You also

see what its like to be your own customer.

For example, one woman said that a shirt she

purchased was too big, but she cut it and wore

it off the shoulder, and submitted a photo of

her new creation. This gives Urban Outtters

a relevant data point about how the product is

actually used.


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Ask good questions. If you put a good

question out, youll be amazed at what you

get. For example, last year Urban Outtters

did a lo-, high style sweepstakes/contest,

where customers shared the cool things they

had created for cheap. When Urban Outttersstarted getting photographs from their

customers, they saw that they are beautiful

and creative. Today, when Urban Outtters

mashes up their own professional photos

with those submitted by customers, even the

marketing team cant tell the difference which

is exactly as it should be. Urban Outtters

customers are creative and inspire Dmitri and

the design team.

Make some introductions. Urban Outtters

added community Q&A to their site, which

created a good format for introducing

customers to one another; they now get about

400 questions each week. Other customers

as well as Urban Outtters designers respond.

The more people you can get involved in the

conversation, the better the experience.

Stop talking about yourself so much. Being

social allows you to let your customer be thevoice for awhile; be quiet, ask questions, and

see what they have to share.

You need a good party spot. It must be

free to participate. For example, Urban

Outtters has often unsigned bands perform

in its Backlot, their back parking lot behind a

agship store, and they stage similar events

around the country. Theyve been doing these

events for years, so now tens of thousands

of people watch them through their live

broadcasting. During and after the events,

they feature cool people they met in their

blog and on Twitter.

Music can really set the mood. Urban

Outtters has Music Mondays on Twitter,

giving away hundreds of thousands of songs

each month; its a top topic on Twitter each

week. They usually feature unsigned bands,

and play these songs in their stores, too,which creates a sense of discovery in the

store. Urban Outtters believes that if someone

recommends good music to you, their level of

credibility goes up.

Be spontaneous. Urban Outtters shares live

links to their in-store events, so customers can

watch even if theyre across the country.

Dont take yourself too seriously. Anybody

can be cool, but awesome takes practice.Social media is a chatty medium; be authentic

to your voice.

Be vulnerable share information to

get information. When Urban Outtters

encouraged customers to send photos of

their mothers as part of a Mothers Day

contest, their team members sent in their

own photos, too.

Keep in touch. These relationships have realvalue keep them going. Keep up with the

people you have interacted with.

Its less about numbers; more about one-

to-one connections. Social media cant be

measured solely by number of people who

potentially see the information, like traditional

advertising is measured. The deep connections

with individuals build over time and create an

annuity that continues to grow.


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The potential downfall of social

media? Privacy.

Users must be able to control who sees their

information, and brands must be responsible in

data sharing and usage.

Manish Mehta from Dell claims that the big,

scary risk of social media could be privacy.

Marketers must be mindful not to blindly

promote social commerce growth at the

expense of privacy (or even the perception

of loss of privacy).

A panel of four Millennials digitally-enabled

people between the ages of 10 and 28 said

that they must be able to control who seestheir information on social networks such as

Facebook. They are also reticent to share

details about how they spend their money and

are fearful of credit cards, partially due to the

fear of identity theft.

What will social commerce

look like in a year?

The third annual Social Commerce Summit

lets us look back over the years to see the

true evolution of social commerce. Two yearsago, topics revolved mostly around retail

and customer ratings. Todays brands are

taking social commerce including all social

interactions with consumers seriously.

Companies are learning to relate and act more

as people, breaking down inauthentic walls of

marketing-speak. And theyre experimenting

and building best practices along the way.

The 2010 Social Commerce Summit reects

a moment in time. Well keep you posted on

what continues to evolve.

Your next steps.

These insights should answer some questions,

but raise even more. Bazaarvoice is the world

leader in social commerce, serving top brands

across a huge variety of industries. Visit us

at www.bazaarvoice.com and schedule a

demo, where well help you understand how to

connect to consumers, build engagement, and

drive measurable return on investment.


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Sources and

contact information

Presentations excerpted in this paper came

from the following sessions at the 2010 Social

Commerce Summit, April 19-21, 2010. Formore information on this and future events,

visit socialcommercesummit.com and

socialcommercesummit.co.uk.

From Participation to TransformationSam Decker, CMO, Bazaarvoice

Twitter: @samdecker

Email: [email protected]

Social to the Core: How New Media -Unlike Marketing - Forces You to be

Competent Again

Douglas Rushkoff, author,

Get Back in the Box

Twitter: @rushkoff

Site: rushkoff.com

The Bottom Line: Measuring SocialMedia to Deliver Business Value

Manish Mehta, VP Social Media

and Community, Dell

Twitter: @[email protected]

Site: hufngtonpost.com/manish-mehta

How Golfsmith measures ROIJamey Maki, Director of E-Commerce

Twitter: @golfsmithhq

Email: [email protected]

Who are Digital Millennials and Howare They Changing Shopping? a panel

of Millennials

Interviewed by Kelly Mooney, CXO,

Resource Interactive

Twitter: @pkmooneySite: resourceinteractive.com

The Social rEvolution at TurboTax:Friendcasting the age of media anarchy

Seth Greenberg, Director of National

Media and Digital Marketing, Intuit

Twitter: @sethg

Site: linkedin.com/in/sethgreenberg

How Urban Outtters Makes the Most of

its Unique InuencersDmitri Siegel, Executive Director

of Marketing, Urban Outtters

Twitter: @dddmitri

Site: dmitrisiegel.com

Organizing the Worlds Informationfor Shoppers

Sameer Samat, Director of

Product Management, Google

Site: linkedin.com/pub/

sameersamat/0/6b/530

Documents

BV White Paper- Social Commerce Trends 2010