Oct 10, 2009

What do the “Waves” of Google bring to Social Commerce?

The sudden arrival of Google Wave last week, where100,000 guests were each able to invite 5 other people, made a powerful sweep over Web 2.0.

In Google own terms:

"What is a wave?

A wave is equal parts conversation and document. People can communicate and work together with richly formatted text, photos, videos, maps, and more.

A wave is shared. Any participant can reply anywhere in the message, edit the content and add participants at any point in the process. Then playback lets anyone rewind the wave to see who said what and when.

A wave is live. With live transmission as you type, participants on a wave can have faster conversations, see edits and interact with extensions in real-time."

What are the benefits of Wave and how can it change E-commerce?
The main idea here is conversation.  With traditional E-commerce sites the products are displayed with information about each item, the client is then directed to the bottom of a “funnel” that reduces the number of clicks before verifying the purchase.

This new social commerce tool allows the consumer to rate the products, share information, and inquire about the items posted.
For merchant sites and brand sites, it is more about involving the consumer than directly persuading them…
It is global conversation around a brand, a product, or a service that makes up the funnel.

Up until now, this communication technique has been poorly structured, its persistence is limited, and the consumers don’t really discuss among themselves.  They read published information by others who they do not know. At best it becomes a forum and the funnel is dismantled.
A social network is the only place where one can engage in conversation between those they know.

It is here that Google Wave comes into play.

By organizing conversations in the form of a document (Wave) that in turn includes other published documents (blogs, other sites, forums, emails, social networks, photo and video sites, SMS…) Wave organizes and centralizes these discussions.

Discussing a hotel, a Netbook, a stroller, a movie, or a diet pill can take new form in that the consumers will play a role in the power given to brands and merchants, in the hope of selling better.

Wave is a potentially very powerful social commerce tool, perhaps even overshadowing Facebook and Twitter.   Social Networks can lose their monopolies of the conversation, and this one can breakdown the barriers of each site.

 Ride the Wave!

RackUp, the shopping game where you are sure to win!

Social Commerce permanently increases new forms of e-commerce and business models.  There will be winners and losers!

It is difficult to say whether RackUp, a new start-up model presented at the TechCrunch conference will succeed in asserting itself.  It does present more than one advantage:

RackUp renews auction items.  RackUp makes shopping fun, and RackUp assures you of winning!
How does RackUp work?  It is hard to explain without having used it before and I recommend the video demo, but here are the main aspects:

  1. RackUp is an on-line auction system of gift cards and gift certificates, with all kinds of attractive packages with companies like American Airlines and Travelocity Hotel, including Legal Sea Food restaurants, or brands like Calloway Golf or MocaShop jewelers.
  1. RackUp has auction rooms for gathering bidders who want to purchase gift certificates for a particular brand.
  1. Each bid is very quick, lasting only 60 seconds.  An auction is held every two minutes.  Therefore there is no long waiting period.
  1. At the very beginning of the auction, each bidder can purchase a gift certificate, but only the first will buy it at the purchase price, each of the following bidders will increase the bidding price by 10cents so that the 10th bidder will pay $51 for a gift  certificate of $50.
  1. However, as items are purchased, each bidder progresses to a level which gives complimentary value (from 3 to 100%) to his/her certificate.
  1. This progression continues for 60 seconds.  If you reach 100% after 60 seconds and the bid is marginal, it will be cancelled.  However, nothing is lost, you can start over, paying a little bit more for your certificate, for which you are assured a 3% reduction.

In the example given by RackUp, the purchase of a gift certificate for American Airlines at $50 for a price of $51.20 will in turn become a certificate of $76.80.  Well done!

RackUp is part of the array of on-line auction sites that Ebay made popular world wide, casual bidding that has become an incredible success with women and the gift card phenomenon.

RackUp is pretty clever in emphasizing the social aspect of bidding.  The competition sets people up to bid against each other but also increases the stakes by increasing the bonuses.

The bonus system, which is linked to group or personal purchases, is starting to appear more and more often in the new economic models of on-line auction sites.

In these tough economic times, the bonuses given by RackUp are a type of discount and will become more popular.

While you wait, is there anyone that has to take an American Airlines flight?

Team with Twangu?

Form teams with Twangu?

Speaking of social commerce, here is a new Facebook application that is 100% "team commerce".
Only a few weeks old, Twangu wants to initiate this wave of social commerce predicted to be massive within the next several months or years. 

How does Twangu work?  Facebook users are invited to form "teams" that want to purchase items for a fixed price by the users themselves.

Once these groups are formed Twangu intervenes and places each team with a vendor of the product wanted, provided the seller agrees to purchase conditions of the team, notably on the price proposed for the item.

Items are usually purchased through PayPal and Twangu takes great care to guarantee that the transactions do no take place on Facebook itself, but on a secured site.  Obviously the idea of giving out your credit card number several days before buying the item creates a considerable problem, but Twangu is hoping that the possibility of getting your hands on something for a cheaper price will entice users to overcome their fears…..

And what kinds of teams are formed using Twangu?

Here is a sneak peak….

Ipod Touch 32GO for $100; PS3 games (without precision) for $30; jeans for $25; Wii Rockband 2 for $50; Windows7 for $49.95; Iphone 3G's at $199; "Future beach" kayaks for $199; Skullcandy helmets for $21.50 etc….while scrolling through red shoes, red dresses and red accessories for $1.

It is still too soon to tell whether this intermediary business model and the idea of the "group discount" implemented by Twangu will work!  Let's bet that other projects are in the works and is owed to the innovation of Twangu.

Social commerce and the "discount group" are, in any case, signed on in the context of the current recession.

The prestigious Wall Street Journal, in its Smart Money column, published an article in January entitled "How to Score Group Discounts With Strangers".

Shweta Oza, a Marketing professor at the University of Miami states in this article:

"Businesses worried about slumping sales and continued cutbacks in consumer spending are more amenable to offering group discounts.  You're enticing them by bringing them in more business, which they're hunting for in today's economy".

Oct 9, 2009

The Twitter Paradox

Following the serial “Where is Twitter’s business model”, an article published on the trendy on-line magazine Fast Company.

Twitter Doesn’t Sell Advertising”, Yet 20% of Tweets Mention Brands

Biz Stone, co-founder of Twitter, nonetheless continues to say that Twitter is not ready to sell [advertising] space.  There are so many brands mentioned in the tweets, however, it’s enough to make any one give in!
Twitter archives already represent a database of comments on very popular brands.

By the time this post is published, Renault, passively defeated by Twitter’s French community, would without a doubt pay good money to analyze conversations.

Read the rest on Fast Company

Friends and Feeds

These are  two key players in the upcoming Social Marketing and Social Commerce revolution!

Abbey Klassen is a huge believer and talks about it on the very serious on –line media and marketing source Advertising Age:

“Social Shopping Takes on New Meaning With Newsfeed Purchasing

1-800 flowers and the start-up Alvenda not only are beginning to sell on their customers Facebook pages, but are preparing to advertise through feeds also.

The art of business is being restructured!

Abbey Klassen goes on to say,

A recent study by Ripple6 and The E-tailing group suggests 83% of people want to share information about their purchases and that 43% credit making purchases as a result of their social networking surfing”

Read the rest on Advertising Age

Sherpad: the social-commerce revolution blog!

An e-marketing and e-commerce revolution is going to come about.  It is the irruption of social commerce using feeds, blogs, social networks, and community sites.

The idea behind this blog is to chronicle this revolution, regardless of the medium & technology it uses.

Brands can no longer ignore the profound changes taking place on the web nor the social relationships brought on by the explosion of community based media and social networks.  Sales and marketing companies can’t afford to turn a blind eye either.

E-commerce is on the verge of important changes.  Several brands and start-up sites are starting to work differently by providing information, expert knowledge and recommendations, thus, in short, giving the power back to the consumers, and especially to the various multifaceted links that are accessible to them.

Ebay is, of course, the most popular site that started this revolution, however, beyond Ebay, there are numerous other models that are slowly cutting out their little niche in the world of social commerce.

We bet that within the next 1 to 2 years the face of e-marketing and e-commerce will take a new direction.

Several times a week, this team of writers, Pierre (virtual world and social network creator), Bertrand, (financial analyst), Jerome, (Internet and e-commerce entrepreneur), and Arnaud, (Web 2.0 IT specialist), who are based in Paris and New York, will talk about their discoveries, practices and projects by making you a part of a most innovative and unusual world.