Download - S commerce
KINGSTON UNIVERSITYFaculty of Computing, Information Systems & Mathematics
An investigation of why Social Networking sites go E-Commerce
Vidoushi D. Bahadur-SomrahMSc Information Systems with Management Studies
Supervisor: Mary Thomson
Reasons for conducting this investigation
To gain an in-depth understanding of:
What is Social Commerce (S-Commerce). The reasons behind the merge between E-Commerce & Social Networking. The psychology of online shoppers compared to high-street shoppers. The marketing techniques & cost(s) of implementing S-Commerce by
retailers...and How will the new S-Commerce shopping experience benefit both retailers &
customers.
and to back the research findings from the points mentioned above by:
Launching a survey questionnaire (online & offline) based on Social Networking, shopping habits and S-Commerce experience.
Analysing the results collected once converted into useable formats Discussing the results collected & being able to make comparisons,
recommendations & conclusions
Reasons for conducting this investigation
Definition:
‘SocialCommerceToday’ Blog defines it 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.
Traditional Commerce
Electronic Commerce
Internet (1990s)
Mobile Commerce
Mobile technology
Social Commerce
Social Media
S-Commerceaccessible from the Internet & Mobiles
So what is Social Commerce?
Let’s have a look at how it evolved:
Social Networking
MySpace
Bebo
Hi5
Friendster
E-Commerce
ASOS Clothing
Dove
Delta Airlines
1-800 flowers.com
These retailers have fully integrated S-Commerce platforms available
already
Examples of E-Commerce & Social Media Integration
Let us look at the facts & figures of Social Networking:
Facebook: 750 million active users + 700 billion minutes spent monthly!
Dec 09: A significant increase of 82% in the amount of time spent on Social Network sites such as Facebook, Twitter, MySpace etc compared to 2008.
Online users spent an average of 6 hours each month on Facebook alone compared to just over 3 hours in 2008 on Facebook and Twitter combined.
May 09: almost 80% of all age groups visited a social site & represents an avg. time of 4.6 hours/visit. 67% of people age 55+ spend almost 3.7 hours/sites.
May 08 - 09: shows an increase of 7% in the total UK internet audience on social sites.
Facebook announce profits of $500m (£300m +) in first half of 2011
Why are retailers targeting Social Networking platforms?
comScore World Metrix for 2008 & 2009
Table 1: UK age group visitors visit Table 2: UK Social Networking sites visit
UK figures of Social Networking:
Psychology of online shoppers compared to high-street shoppers
The psychology of both online shoppers & high-street shoppers appears to be similar.Issues that retailers face with the above shoppers are:
Shopping baskets are abandoned & payment not completed at the last minute Hours are spent browsing products but no purchase is made. Shopping basket is used as a wish-list without any intention to buy. No sales are made if feedbacks have not yet been left on the product. Shoppers buy solely on price and do not consider after sales benefits,
warranties or customer service quality.
There are 3 types of shoppers: Vague shopper – Need others opinion/feedback before making a purchase Cost conscious shopper – Want to get the best value for money Window shopper – Browse but never or rarely buys
So how can retailers influence these types of shoppers to buy
Every individual is influenced by the following:
Normative influence - Influenced by the desire to be liked by others.
Informational influence - Influenced by the facts, figures, information available, information provided by expert shoppers and the desire to be correct.
Combination of normative and informational influence
Group and collective influence – Influenced by the majority’s choice in a group
Retailers have used the power of influence factors above and made use of the new S-Commerce platform to overcome this issue in such manner:
Use Social Networking sites to bring shoppers with common interest together.
Use the possibility to leave comments such as feedbacks, reviews and opinions on Social Networking sites.
Make shoppers feel part of a community or group.
Use the word-of-mouth concept and interaction between online users as a brand promotion and an advertising benefit.
Use the info from customers reviews and feedbacks to improve services and products.
So how can retailers influence these types of shoppers to buy
Marketing techniques available within S-Commerce
Social Comm
erce
Marketing techniques available within S-Commerce
SCRM: Close engagement between customers and retailers to provide a long-term relationship based on trust and brand loyalty.
Word-of-Mouth: Sharing of personal opinion or recommendation of one user to others.
Social Shopping: Informed shopping from Social Networking sites based on reviews, feedbacks or recommendations made by friends, family or contacts.
Customer-to-Customer: Platform which permits a transaction from one customer directly to another, e.g. eBay.
Open-Source: Platform where online users can discuss and share their ideas on products or services among each other freely and anytime.
Viral: Mass advertising by using email footers, spam, or ads.
Smart S-Commerce decision-making process - ‘CEPEA’
Improved customer decision journey with S-Commerce platform
Cost of implementing S-Commerce by retailers e.g., Facebook
Facebook has 6 third-party applications where retailers can incorporate their E-Commerce store & have the S-Commerce retail platform.
The costs to retailers to apply these apps are:
1. Voiyk – Free for 1st month & $69 per year after that (no per-item fees, transaction fees or extra charges)
2. ShopTap – Flat monthly fee (start from $10 for up to 500 products)
3. Sortprice - $149 monthly fee for up to 1,000 products to $ 400 monthly for up to 50,000 products (free store app – existing customers).
4. Shoutlet – Enterprise-level companies annual fee is as high as $ 50,000 and smaller retailers: yearly fee from $ 5,000 to $10,000.
5. My Merch Store – Provides retailers who are ‘Zazzle’ customers to input their products on Facebook and share them with friends.
6. LetMeIntroduce – 50 cents every time coupon code gets accessed by customers.
Survey Questionnaire & Results Analysis
Online Survey – 27 questions total
Offline survey – Informal interviews was conducted at home, workplace and shopping malls.
77 respondents recorded over 2 weeks duration. 52 respondents from online source and 25 respondents from informal interview source.
Survey launched on Google Documents site (free)
Survey questions based on ‘Social Networking experience’, ‘Shopping habits ‘ and ‘Social Commerce understanding and views’
Results on which Social Network sites participants are registered with:
Facebook most popular with 74 out of a total 77 participants with an account (96%). Twitter and LinkedIn came in 2nd and 3rd position with 26% and 25% responses
respectively.
Results on Social Networking experience
How many times users tend to check their accounts daily: 29% check between 5 & 10 times daily 21% check more than 10 times a day Other - described their social
networking site being always online via their smartphones and mobile data plan
Average duration of each session users tend to spend on their social sites (daily basis): 66% of participants spend less than 30
minutes per session 35% - less than 10 minutes 14% - between 30 & 60 minutes 16 % - More than 60 minutes Other (4%) – Always online via their
smartphones & the session never ends
Responses on the usage on the ‘like’ button A combined results of 94% of participants
use the ‘like’ button at some point. 51% - often use the ‘Like’ button 12% - always making use of the feature. 31 % - rarely use this feature
Results on shopping habits
Number of times participants shop on a monthly basis: 70% - shop 5 times or less each month. 12% - shop between 5 & 10 times 13% - shop 10 times or more Amazingly no participants said ‘Never’ Unknown – ‘shopaholic ‘ , depends on
mood, every week or unlimited
Number of items purchased on a monthly basis by the participants: 66% - purchase 50 or less items monthly &
20% revealed that they purchase more than 100 items monthly.
Participants further stated that: 35% - normally shop online
Types of products participants buy online: Electrical – 51 % Food – 15 % Clothing – 42 % Everything – 43 %
65 % stated that shopping online offer better value compared to high street retailers.
Participants further described the benefits: Money saving – 74 % Time saving – 78 % Wider choice – 48 % Convenience – 67 % Other – 4 %
An insight on the type of information that participants share among social networkers are: Gossip - 29% Daily news – 34% Pictures / photos - 77% Fashion news - 16% Chat - 73 % Comments - 60% Other - 4 %
25 participants (32 %) claimed they do share their shopping experiences on their network site(s).
The combined result (32 %) was split as follows: 14 % - Often 8% - Always 10% - Rarely
61 participants (79 %) states that they prefer to have feedback/reviews before conducting any purchase of product.
Results on Social Commerce knowledge
39 % - gave a correct description of S- Commerce 23% - have used Social Commerce on Facebook before 62% - were aware of retailers’ presence on social sites 55% - keen to shop & share their shopping experiences within the new platform. 61% - were keen to share /gain knowledge on their friends’ product preferences on their
network. 55% - say that they would like to get the latest updates on deals and promotional
savings.
Companies Successful StoriesGroupon $11 Million in one day sales for GAPSpinback $2.10 average incremental revenues from each Facebook wall
post + an impressive 10.9 % conversion rate on Facebook shares .
Pampers Pampers sold 1,000 Diapers in 1 hour on its Facebook store.
Baby & me 50% of online sales come from FacebookSpinback 10.9% - Conversion rate for Facebook shares that leads to a
purchase.
Livingsocial 42,000 + Facebook shares in 1-day for the $20 Amazon voucher.
Ticketfly 3.25 average sales generated through Facebook shares.F&F £2 million +
Generated in sales with Facebook vouchers
Success Stories of S-Commerce
Social Commerce
Informed purchases
Reviews /feedbacks
Info Sharing
Recommendation
Feel part of a community
Transparency
Group-buy, promotional
vouchers, latest deals
Single log-in
Benefits of S-Commerce for shoppers
Benefits of S-Commerce for retailers
Social Commerce
Target vast audience at one location
Gain insight on popular products
Ability to act on negative
product reviews and
re-gain customers
trust
Use the word-of-mouth
referral to increase
demand & profit
Obtain product-shopper
data and use it for
marketing and business
decisions
Closer customer-
retailer relationship
Increased demand, sales and
profits
Discussions
The following sections have been investigated in depth in the dissertation report: Evaluation of the Social Commerce concept with its advantages as well as
disadvantages identified from the survey results. Discussion of survey results including problems encountered from some
responses and a comparison of the results obtained against other researchers’ work.
Short or long term impact(s) on High-Street retailers. Security issue on social sites. If Social Networking websites become payable to shoppers. Language translation facility within S-Commerce for non-English speaking or
writing social shopping users within the community of S-Commerce.
Some recommendations to enhance the S-Commerce platform
Implementation of Loyalty Schemes to provide further discounts, free gifts, vouchers, bonus points, social credit rewards etc to boost S-Commerce.
A transparent logistic view on their purchased product(s) via an Electronic Data Interchange (EDI).
Improved News Feeds for Social Shoppers to enhance advertising.
Any Questions?