Social Commerce? Just Tell me When!

The advent of social commerce, this is the whole bet and project of this blog and its team.

If numerous signs have indicated premises for this new form of consummation, keep in mind that this is only a taste of what’s to come.

Jeremiah Owyang, analyst at Forrester Research, predicts a bright future for social commerce….after completing 5 key phases of social media:

1. Social relationship phase: people connect with each other and share information
2. Social functionality phase: social networks take on the form of operating systems
3. Social colonization phase: each experience can now be “social”
4. Social context phase: the content is personalized and targeted
5. Social commerce phase: communities define the new products and services

We can see well how social networks complete phase 1. 

Phase 2, the era of applications and widgets, social interconnection is already well advanced.

In phase 3, the one of “shared ID”, individual identities shared between networks and websites is also taking place. Thus, a lot of internet users directly share videos on their profile from YouTube on these social networks.

However, a real “portable” identity is not yet in place, despite having the OpenID standard.

Phase 4, the one of social context, involves the availability of targeted content and seems to me more confusing.  Fortunately, for Jeremiah Owyang, these phases superpose with time, as indicated in the graph above.

This puts the horizon of  social commerce  around 2011!

Will we, impatient social consumers, be able to wait?

See Jeremiah Owyang’s article  

Just Dropped In To Check What Reputation My Reputation Was In….

This is from now on the problems brands are facing today.

With 20% of Tweets mentioning some kind of brand or mark, dozens of millions of fans benefiting from the advertising on Facebook, forums and e-commerce sites becoming more and more widespread for hundreds of thousands of Internet users, and with over 40,000 new blogs created daily and millions of emails in circulation, the problem is immense!

Word of mouth has changed its form.

The Internet and, particularly, social media has transformed conversations once limited to the classroom, the coffee machine at work, or mothers, into millions of simultaneous discussions that become more and more interconnected.

How can brands catch on?  According to The BIA Kelsey Group, a consulting firm, the expenditure of ERPM (Email, Reputation and Presence Management) will reach $3.1 million by 2013.

Word of mouth is the Holy Grail when it comes to marketing strategies.  A rainbow of media tactics on the Internet offer a key to the world, but until that point, there is word of mouth.

Managing the reputation of a brand on the Internet has generated a demand for technological business, professions, and solutions, a little like SEO (Search Engine Optimization), and has become a major business for brand marketing. 

Among the existing solutions, to quote BrandsEye that states to be the only tool…..

However, if BrandsEye boasts a series of impressionable functions, enabling to:

1. listen to the "global discussion" about the brand
2. offer the possibility to enter into the conversation
3. react as fast as possible if ever a "crisis" came about
4. create quantified relationships with up and coming trends
5. monitor the competition

It is to a great extent defensive ORM (Online Reputation Management) and tools for crisis management.

True, a large number of brands fear a blow to their reputation on the Internet.

The result is a cautious approach to word of mouth on the Internet.  Hundreds of millions of discussions about brands develop and form a global conversation which is very quickly becoming the key to a successful e-commerce experience.

Is this conversation destined to stay out of hearing distance form marketing managers?

Matt Booth, (senior vice president and program director), à BIA/Kelsey adds,

"There are too many disparate conversations going on through social networks, user reviews, message boards and online affinity groups for a small business to find let alone track manually......The market has developed in such a way that ERPM (Email, Reputation and Presence Management) is basically a white space that capital and technology will rush to fill."

This requires a lot of skill!
How does one speak when there are so many word of mouth flows?

This is the question that opens access to $3.1 billion by 2013!

From Social Marketing to Social Commerce

On the Internet e-marketing is linked much more to e-commerce than marketing and commercial activities outside of the Internet.

This is even more the case with social networks.  Social marketing and social commerce often overlap each other.  If the second one is not yet come about, it is very possible that it will directly develop from the first.

Several recent contributions by reputable commentators are following the leads of both E-Marketer and WebPro News.

Chris Crum wrote on WebPro News “Beyond Social Media Marketing to Actual E-Commerce”

“We talk a lot about social media marketing – using social networks like Facebook and Twitter to market brands and drive traffic to sites.  There is no question that these can be effective tools for doing both of these things”.

But will social marketing remain limited to these two objectives?  Is it just a question of developing a fan base and then directing it to brand sites or E-commerce sites?

Chris Crum continues:

“As time goes on, it may become helpful or perhaps even necessary to use these tools for actual e-commerce.  The common thinking behind social media marketing is that you don’t want to be too sales-pitchy in your conversations, and in some ways that is still very true.  However, while social media is largely about conversations, it’s not only about conversations”.

Activity on social networks is not, strictly speaking, only built on conversations. For dozens of millions of young people and more and more adults, social networks have become a “hang out place” that have developed into mediums where one can share photos or even play between friends, on asynchronous mode . All these are social activities that continue or strike up conversations.

He adds however that people are not content with conversations only,

“They are looking for information.  They’re using social networks to help them make purchase decisions.  Sometimes this is through conversation.  Sometimes it’s as simple as being a fan of a brand’s Facebook page and receiving timely updates.”

The commercial outlet of all this social activity is logical.  It is the outcome of two symmetrical forces at work.

There is an obvious social aspect to shopping that has been part of our culture for a long time while shopping also plays an integral part in our social relations.  Take, for example, the Tupperware network that developed in 1948. 

Denise Zimmerman, president of NetPlus Marketing Inc. was actually just interviewed on this subject by E-Marketer, “Social Shopping and the Brand Experience” and talks about a natural evolution.

“If you successfully connect and make shopping valuable to the community in a way that’s easy and accessible and meets their needs, it’s a no-brainer”.

As a matter of fact, Facebook just simplified Facebook Connect implementation on web sites.  This is currently the best way to link E-commerce sites to the network which has an extremely practical advantage.

Paul Dunay, Global Managing Dir. of Services, Social Marketing Avaya, was also interviewed by E-Marketer, “The Future of Social Shopping” touching upon the practical aspect of Facebook Connect, and closing with a definition of Social commerce,

“Social commerce is working with or using your social graph, which is defined as your followers or your friends, and allowing them to help you make buying decisions.”

“Facebook Connect would allow you to go to a website like Dell.com and authenticate yourself using your Facebook profile, allow your identity to be known and access friends so you could spark up a chat.  So I could say, “Hey, Jeff, I’m looking at this new fancy laptop or this netbook.  I heard you bought something.  Would you recommend this to me?”

All this, he adds, would be like virtually taking your friends shopping with you.  In order to do this, internet search will have to go through your graph of friends, and perform what Paul Dunay calls a “social search”.

However, for this concept to work, it is necessary for those in our social graph to identify their consumer skills, and even some of their purchases allowing them to become public to our friends.

Lack of privacy and  consuming information not meant to be shared creates an obvious objection to this idea.

The success of  fan pages, however, proves the opposite.

The Brands are their Fans

If "media is the message" according to the well known Marshall McLuhan equation, on Facebook the "brands are their fans".

Fan pages are one of the most widely used mediums of expression and association on the network.  A very significant part of these, around 1 out of 4, concern brands.


Whether it be the official page created by the brand itself, the one initiated by the fans, which the brand subsequently joins forces with or not, or even the pages dedicated to products.
Here are the top 30 on Facebook:

 


This ranking of products is very revealing:

It reflects more than 54 million pieces of fan feedback and brand support. This number accounts for 1/6 of Facebook. Of course, numerous fans supported many brands.


Starbucks, “a hang our place for real”, is in the lead as first place in the virtual world.  This is not an accident!

Neither is the strong presence of candies and various “junk food” brands, such as Nutella, Pringles, Kinder, Ferrero Rocher, Krispy Kreme, Reese’s, Skittles, and the ever essential Toblerone.
What are they all doing on Facebook?

They are expressing an identity, even an attitude.  Red Bull is the only beverage present in the top 30 besides Coca-Cola.  Unthinkable, without this “attitude” component, the red beverage has achieved a third of the “fan level” of the black liquid.


It is similar with “fashion” brands, whether it is clothing, shoes, accessories, or boutiques, which compete with food.  Adidas and Victoria Secret are in the lead, followed by Nike, Converse, Zara, Puma, Lacoste and H&M. 


Is a brand not showing in the top 500 in danger?  Without a doubt, even if they don’t know it yet!

This virtual use of brands on Facebook is usually doubly passive, meaning that the fans are proud to belong, but are not very active, and that the brands themselves, in many cases, are often left alone due to not being very active, even on their official fan pages.

This is not at all the case with Coca-Cola who uses its fan page as an active tool and shows the way.

McLuhan would say that fan pages are mild, neither cold like the television, neither hot like the radio. 
Social networks are a media all their own.  Here the media is you!  When a user declares him or her to be a fan, brand and user mutually assert themselves.  

Got Any Virtual Chocolate Lately?

AdNectar, for whom this isn’t the first time, and Fun140, publisher of quizzes on Twitter, just launched branded virtual goods, such as Godiva virtual chocolates or Malibu virtual rum, on Twitter or LiveJournal.

 (A previous virtual campaign of Godiva on Facebook)

Thus, if a person sends some virtual chocolates to a friend using Twitter, the friend is notified via a direct message, Twitter’s private messaging service.

By clicking on the URL in the message, a link will then direct it to the virtual chocolates and a tweet will alert the sending party when the gift is received.

“People use virtual goods to personalize how they communicate with their friends.  Branded items will make this social experience on Twitter more engaging and entertaining” explains Ashvin Kumar, co-founder of Fun140.

By allowing the offering of branded virtual goods, AdNectar diffuses the brands directly into the network of friends.  Thus, socially accepted, these goods benefit from a viral dissemination that is much more effective than displaying advertising banners.

AdNectar's clients 

3 years ago the brand fan pages, now common, might have seem to be a marginal and exotic media.

Today, given the continual increasing widespread use of virtual goods, it is more than likely that branded virtual goods are going to become one of the strongest social marketing tools, because it subscribes to the new implicating, engaging, and recreational marketing logic.

A previous campaign for Godiva chocolates in virtual form, conducted by AdNectar on Facebook before Valentine’s Day showed impressionable propagation results. 

Golf, Fans, and Brands, the Golfsmith case

The growing popularity of Facebook fan pages or their equivalent on Twitter indicates a major change in E-marketing and the direction it is taking.

No longer is it enough to give consumers the floor on Internet sites, which, in reality, few sites do. From now on it is necessary to start multiple conversations with fan pages on Facebook and followers on Twitter.

With 7000 fans on Facebook and 1200 followers on Twitter, Golfsmith, a producer and distributor of golf equipment, has a notable and innovative presence on social networks, yet remains average.

Eric Mahlstadt, Senior Online Store Manager, talks of his business strategy in relation to social networks.

“The value right now to us as a retailer is not as much about what kind of people these are, but what kinds of experiences they’re having.  We’re interested in providing as many choices and platforms as possible for our customers to share thoughts and ideas and provide input.  The struggle then becomes having enough engaged ears to hear all the feedback and to be nimble enough to act on that feedback” 

Golfsmith already has an open website where comments are welcome and the home page strongly encourages users to leave feedback.

In order to link user feedback on its site and those from fan pages on Facebook or followers on Twitter, Golfsmith chose a social marketing solution proposed by Bazaarvoice, a specialist in “community management”, called Social Network Accelerators.

How does it work?

 

“With the new Social Network Accelerators, Bazaarvoice ensures that companies achieve more from social commerce by using social networks like Facebook and Twitter as a distribution channel for user-generated content created on brand sites.”

How Do You “Metric” Word of Mouth? The Twitalyzer case

How do you measure word of mouth?

The Twitalyzer case!

While more and more brands are looking to establish a presence on social networks, there is an intrinsic difficulty in measuring the return on investment (ROI) obtained by marketing on social networks.

In any case, when it comes to analyzing more than click performance of ads on Facebook, for example, by measuring the impact of a fan page, of a Twitter account, or of word of mouth, the “metrics” still need to be defined.

Firstly, is it necessary to measure word of mouth?

Elaine Gantz Wright, who’s blog is specifically geared toward fund-raising activities on social networks and how they can help transforming society,  just published an interesting post on the subject, “The ROI that would be King” .

She mentions a comment made by new special media journalist, Clay Shirky that can be applied perfectly to marketing problems encountered in social networks.

“A revolution does not happen when a society adopts new tools.  It happens when society adopts new behaviors.”

 

Elaine Ganz Wright adds,

“And I think that quote sums up the core conundrum.  At the end of the day, social media is really not “a program” at all.  It is a fundamental shift in the way customers, donors, constituents, and employees consume and produce information.  Its behavior- a change in the way we are in the world.”

As is happens, the effect of marketing in social networks can be evaluated much like banner ads of the internet are or buying keywords though Google.

It’s not the R.O.I that we need to talk about for judging the impact conversations have on brands, fan pages with blogs or word of mouth in general; any of these marketing tools or situations that allow an “engagement “or, translated, an “implication” around brands to develop.

Elaine Ganz Wright talks about replacing the R.O.I with R.O.E (return on engagement).

Evaluating is of utmost importance!

This is where Twitalyzer comes into play and analyzes the impact of personal or brand accounts on Twitter.

The idea behind Twitalyzer comes from the development of several different metrics to calculate the impact of an account on the micro-blogging network, not only by its popularity (the number of followers).

What are the criteria?

• Impact, or the number of “followers”
• Authority, or the number of times you are “retweeted” by others (RT)
• Generosity, or the number of times that you “retweet” (RT) others
• Rapidity, the number of tweets that you publish within a 7 day period
• Clout, or the number of times that your account is referenced by others
• Signal to noise ratio which calculates the number of tweets that include URL’s, number of tags, RT’s and web addresses, meaning all the tweets that create socialization and information compared to those that are only anecdotes.
• Influence, which balances the different aforementioned measures

Twitalyzer has developed new metrics adapted to the presence on Twitter.  Indeed they only calculate the impact of your account and not free word of mouth that mentions a brand or a person independent of their account.

But at least these tactics go beyond the number of followers and separate the “influential” tweets form those that are purely anecdotal.

Let’s take for example the two brands Starbucks and Coca-Cola who took full advantage of the turn around of social networking and use the most influential Facebook fan brand pages, resulting in respectively, 3,850,000 fans and 3,706,000 fans (Sept 09).

Starbucks is ahead of Coca-Cola again on Twitter!

Here are the score boards developed by Twitalyzer:

Starbucks has a profound influence and a very high signal to noise ratio, referring to, in some way, the quality of its tweets, which also shows its weight (clout) to be at a maximum level. 

Coca-Cola doesn't score badly either on its signal to noise ratio, but its authority is much weaker.  It is also less generous than Starbucks, meaning less active in retweets (RT) than other accounts.  Is Coca-Cola more egocentric than Starbucks? 

Should we think that the Twitter audience likes Coca-Cola less than the Facebook audience, or is the black liquid just missing 140 characters of savoir-faire?

Why Would You Want to be Part of a Retail Community?

Why the devil would you when hundreds of traditional E-commerce sites compete with ideas, discounts, and creativity?

This is the question that Ripple6, a social media platform for e-commerce, asked in a survey of almost 1006 American consumers by the E-tailing group.  This survey was already alluded to in a previous post about using news feeds for business purposes.

It is interesting to point out that the first two results validated each one by about 50% of consumers, both forming two different, but, at the same time, perfectly compatible and complimentary poles.

• Those that want to benefit from the knowledge and experience of others, those that are interested by the “wisdom of the crowd”
• Those that want to pass on their knowledge and their experience, the “wiki motivation”.

The equal importance of these two groups is astounding.  There are numerous contributors to Wikipedia, where as the number of the users of the encyclopedia is far above .  The ratio of potential participants to visitors in social commerce groups is 1 to 1.

Other motivations, such as saving time or brand affinity, respectively more “selfish”, and less “implicative”, gather significant but much more inferior votes.

Brand affinity, a constant on Facebook fan pages, is another aspect that is taken from social marketing rather than social commerce.  It also means less consumer independence with the brand.  So, the Iphone fan has a less critical eye than the Iphone user who lets the consumer benefit from his/her experience.  His/her social value is less.  It is of course possible to be both fan and critic at the same time (as with me).  

Finally, let’s point out that the Ripple6 survey did not consider the “discount group’s” possible motivations for achievement that, nonetheless, in its own way, summarized individual motivation and collective interest.

Did You Engage Vuitton Parading on Facebook?

What a superb idea Vuitton had!

Replaying his fashion show on Facebook. Where as the “live” fashion show was reserved for celebrities and other VIP, the “social” fashion show was accessible to fashionistas everywhere on the Facebook fan page “The Art of Travel by Louis Vuitton”.


This typical social marketing strategy allows one to break free from new marketing trends: “live” vs. “social”, this is the new alternative.

Or rather “live” & “social” that could quickly be expressed by “live” x “social”, with the showing on Facebook allowing members to discuss between themselves and increase the impact, as the collected insights on Facebook reveal.

Among all the media choices available the television broadcast is losing, and, also noted, was that neither the Louis Vuitton site itself, even though more directly linked to his collections, nor YouTube, another possible media platform for playing videos, was chosen.


By using Facebook, Vuitton chose to give his fans priority.  If the site keeps the video 24 hours after being played, the fan page finds significance in hosting the event and allowing fans to express themselves and to benefit from an exclusive opportunity.

Here are some of the most significant comments:

• The idea:  LV your idea excellent…. “…….. always love u louis vuitton……” “LV is the ultimate style statement”….. “Can’t wait to watch it. LV is the BEST!”….. “well done!!!!!! It was a nicely planned event!!!!
• The fashion show: “I saw very nice bags, me, who is a fan of louis vuitton”….. “LV is awesome I love the tradition canvas, the best!”…… “wasn’t crazy about the clothing”….. “nice! but the bags are really nice! :)”….. “The new line of bags is beautiful!”….. “In my opinion, epic fail: -don’t like the shoes (do I spy UGGS?!) nor the fur tails – Afro stuff capturing all the attention” “Bravo Louis Vuitton….the show was butter smooth….the colors were softly bright….the texture of the fabric was exquisite, especially in the lace-like shorts….I really liked the unique look….the furry shoes in assorted colors were outstanding….all the glimmer, colors, and uniqueness; deserves a real stand up ovation….YOU ARE THE BEST…” “love it….it gives me enough confidence……” “Awesome!! Beautiful!!!....” “Amazing show as usual…am so loving the bright color on the bags…nice”… “awesome colors, style and accessories are amazing!” “luv, luv, luv” “mad shoes…love it and the new reinvention of the kitty heel…love it”.

Over a period of 3 days 6500 points of positive feedback were obtained and a strong growth of the page was seen with The Art of Travel by Louis Vuitton increasing from 640,000 fans to 729,000 fans in a span of a few weeks, while still expecting for a growing amount of comments on fans personal walls.


Louis Vuitton achieved a successful advertising campaign and highlighted the appeal of his new accessory line, especially the bags. Above all, Vuitton was a forerunner and paved the way (with elegance) on Facebook.


if you missed it, the fashion show is still accessible on the Louis Vuitton site