THE SIX DIMENSIONSOF SOCIAL COMMERCETHE LATEST INTERNATIONAL DEVELOPMENTS IN DRIVING REVENUE

MARK ELLIS, MANAGING DIRECTOR, SYZYGY

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Definition: Social Commerce

Word-of-mouth, applied to e-commerce.

“Selling with Social Media”

Social commerce is a subset of e-commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services.

AUGUST 11, 1994NETMARKET.COMFIRST-EVER INTERNET PURCHASE

11.50 AM JULY 8, 20091-800-FLOWERS.COMFIRST PURCHASE WITHIN FACEBOOK

Sharing your purchasing decisions before, during and after buying

+ = € / $

INCREASE TRAFFIC, SALES (CONVERSION)AND AVERAGE ORDER VALUE

BRAND AMBASSADORS“PEOPLE ARE MORE VALUABLE OWNING AND USING YOUR

PRODUCT/SERVICE THAN THINKING ABOUT BUYING IT”Paul Srivorakul, Ensogo.com

2 STRATEGIES

SOCIAL MEDIA ONE-COMMERCE PLATFORMS

Helping people connect where they buy

E-COMMERCE ONSOCIAL MEDIA PLATFORMS

Helping people buywhere they connect

6 x SOCIAL COMMERCE TOOLS

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1 RATINGS & REVIEWS

2 RECOMMENDATIONS &REFERRALS

3 FORUMS &COMMUNITIES

2

4 SOCIAL SHOPPING

5 GROUP BUY

6 PURCHASESHARING

WHY NOW?

FOLLOW YOUR CONSUMERS

IT’S ABOUT

PEOPLE INFLUENCING PEOPLENOT TECHNOLOGY

1. BE HONEST2. BE CONVERSATIONAL

3. BE REMARKABLE (LET GO)

THE SIX DIMENSIONSTO SOCIAL COMMERCE SUCCESS

1. SCARCITY2. AFFINITY

3. RECIPROCITY4. POPULARITY5. AUTHORITY

6. CONSISTENCY

#1. SCARCITYLESS IS MORE (PERCEIVED VALUE)

Frederick the GreatPRUSSIA, 1774Effectively re-branded the Potato by making it a ‘scarce’ Royal delicacy

Christian LouboutinLimited Edition Barbie Exclusive Collector’s Dolls

@DellOutlet $6.5m Twitter RevenueExclusive Discounts and Snap Promotions

GROUPONWorld’s largest ‘Group Buy’ Platform

POP-UP ONLINE STORESLucky Magazine and HSN create 48-hr exclusive Facebook shop

FACEBOOK DEALS (MOBILE)Geo-located local deal promotions have huge expectations for 2011Gap offered 10,000 free jeans to the first 10,000 check-ins (then 40% off)

#2. AFFINITYSHOP WITH LIKE-MINDED PEOPLE

Dell SwarmGroup Buy for technologyDaily deals for Dell bargain hunters

Levi’s Friends Store‘Shop Together’Real-time Global Shared Shopping Functionality

PingApple’s Social Network

Connecting 160m iTunes Customers1m sign-ups in first 48-hrs

#3. RECIPROCITYPAY BACK FAVOURS

Adidas Outlet StoreMember Get Member Social CouponsEarn free shoes by inviting friends in

Fiesta MovementFord’s Social Commerce Experiment (2009)100 free cars in return for monthly YouTube posts11,000 videos, 15,000 tweets, 11m social visitors, 5m shares, 50,000 enquiries, 38% awareness (Gen-Y)

Starbucks foursquareNational ‘Mayor Offer’ (USA) Loyalty Programme$1 off each drink for all Starbucks foursquare Mayors nationwide

Toys R UsToyologistsConsumer panel of (free) toy reviewers on Facebook, Twitter and YouTube

#4. POPULARITYFOLLOW THE CROWD

P&G Amazon Facebook StoreSelling 1,000 products an hour (direct to consumers)Top 29 brands from Always to Zest

The undisputed Kings (and Inventors) of Social CommerceLeading the way since 1995 (£24.5bn turnover, 2009)

BurberryArt of the TrenchBecome a trench coat model (200,000 visitors week-1; 5m to date)

#5. AUTHORITYFOLLOW THE LEADER (EXPERTS)

vente-privee.comExclusive private club for curated designer brand discounts40,000 orders per day; $1.1bn Sales; $70m profit

AppleExpert Discussion ForumsHosting and feeding a platform for thousands of Apple ‘experts’

French ConnectionYoutique (YouTube) – “Plinking”Expert fashion videos with annotated ‘Buy’ buttons

#6. CONSISTENCYONE STEP AT A TIME

BlendtecWill it Blend (YouTube)Smiling is consistent with liking, liking is consistent with buying130,000,000 videos viewed; Home blender sales increased +700% since 2006

Starbucksmy STARBUCKS IDEAFeedback is consistent with caring, caring is consistent with loyaltyConsistent Customer Focus: using Social as an Ideas Platform to improve the product and service

f-commerceFacebook Stores (and storefronts)‘Get It First’ VIP Store, discounts and exclusives for Facebook Fans

f-commerceSoftware suppliers creating integrated Facebook storesE.g. Alvenda; Usablenet; Milyoni; Payvment;

SUMMARY7 KEY POINTERS for 2011

1. EXPERIMENT - START SELLING ON SOCIAL PLATFORMS2. ADD MOBILE (SHARING) INTO YOUR SOCIAL MIX3. IMPLEMENT SOCIAL PLUG-INS e.g. FACEBOOK ‘LIKE’4. UP-SELL WITH REVIEWS AND RECOMMENDATIONS5. INTEGRATE ‘CHAT’ SO FRIENDS CAN SHOP TOGETHER6. MAKE YOUR WEBSITE THE SOCIAL FLAGSHIP7. BRING YOUR OFFLINE BRAND EXPERIENCE ONLINE

THANK YOUm.ellis@syzygy.net

@mellis71