A study by GroupMNext and Compete provides interesting insights into the Modern Digital Consumer Journey. In this study, the focus was on consumer electronics.
Highlights include:
There are six distinct segments of consumers who exhibit similar behaviors and intent.
Amazon is a significant influencer in the journey, representing one-third of all retail site visits.
The brand website still plays an important role for 69% of purchasers.
48% percent of purchases studied were heavily influenced by digital media and technology.
For three out of their six consumer profiles, social media plays an important role in the buying decision process:
Digitally Driven Segment: They use every digital tool at their disposal. They use social and mobile more than any other segment in the study, value convenience above all else and they do everything in their power to avoid physically going to a store. The Digitally Driven exist in good numbers already, but within five years this will be the dominant segment of consumers.
Calculated Shoppers: These shoppers seem to know they are going to make a purchase, but they are deciding which brand to choose. They are similar to the Digitally Driven Segment, but have no urgency to their purchase and they’re willing to take the time to get the best deal.
External Shoppers: These are non-mobile shoppers. They want the answers to, “Should I buy?”, “What do I buy?” and “What brand do I buy?”–all at the same time. These shoppers have no urgency to make a purchase and they do their research on desktop and laptop computers.
Social commerce firm 8thBridge announced the results of its second annual Social Commerce IQ report, and Fab.com tops its Social Commerce IQ 25 list, which measures the social commerce strategies of retailers.
A survey of 1,819 U.S. residents found that 70 percent would rather hear about new products from Facebook friends than from brands; 57 percent have asked Facebook friends for advice before purchasing products; 63 percent share products via Facebook (compared with 25 percent on Twitter and 22 percent on Pinterest), and 54 percent said the total number of likes has no effect on the likelihood of them purchasing products.
And what about Pinterest?
If the adoption rate of Pinterest is any indication of consumer driven change, we expect high growth in these social shopping features in 2013.
Coverage: Proactive harvesting of ratings and reviews for all your products – not just bestsellers – is the first Essential. Skip it at your peril
Depth: Get more trusted reviews for each product – there is a direct relationship between number of reviews per product and sales for that product. More reviews = more revenue
Speed: Get more trusted reviews faster - there is a clear relationship between the speed that reviews appear a new product and the impact of those reviews on sales. Faster reviews = more revenue
Leverage: Expose review content beyond your site – on comparison sites, on Facebook. Use review syndication services
Traffic: Get trusted reviews to drive more traffic by allowing customers to share reviews, and use reviews as consumer-powered SEO – the words they use to review, will be the words others use to search
Trust: Make sure your trusted reviews are seen to be valid – use a third party ratings and reviews service that can act as a consumer trustmark
If there is one ‘golden moment’ in the whole Consumer Decision Journey, it has to be the moment of transaction, the actual moment when someone turns from a prospect into a customer. Yet this moment is almost completely ignored by companies in the digital space.
This is curious. If you look around you on the web (for example, on sites like OpenBook) you will see that the fact that you are buying something or have just done so, is an important topic in people’s status updates. In other words: the act of purchasing has become a social object, a dominant and influential theme in on-line conversations as they are conducted in social media.
It is ‘influential’ in the sense that people tend to buy from other people who are like them or who they like. And these are matters which are probably managed within their social graph.
In Joeri Van den Bergh's excellent book on youth culture How Cool Brands Stay Hot I learnt about the "Haul" phenomenon on YouTube, mostly popular with young girls. Here's an example - with over 1 million views on YouTube.
A "Haul" on Youtube is referring to when the person purchased many items while they were out shopping at stores and show what they bought and sometimes do a small review of the item.
One of the examples of third-party "shop-and-tell" services in The Conversity Model is Blippy. Social media sharing site Blippy helps you to automatically share your favourite purchases from iTunes, Amazon, Zappos, Visa, MasterCard, and many other outlets.
Flaunt-it: third-party ‘shop-and-tell’ Facebook social plugin to add to web-store checkout – encourages people to share their purchases on Facebook.
TipFromMe: third-party ‘shop-and-tell’ Facebook social plugin to add to web-store checkout – that rewards people to share their purchases on Facebook.
Finz.it: third-party ‘shop-and-tell’ Facebook social plugin that rewards people to share their purchases on Facebook.
LetMeIntroduce: third-party ‘shop-and-tell’ Facebook social plugin.
Swipely: ‘shop-and-tell’ service integrated with Facebook and linked to your credit card - buy a product, notify Facebook friends and get cash-back/rewards.
We discovered significant gaps between what businesses think consumers care about and what consumers say they want from their social media interactions with companies. In exchange for their time, endorsement and personal data, consumers expect something tangible. But businesses rank getting discounts and purchasing as the least likely reasons consumers interact with them.
Socialcommercetoday.com defines ‘social commerce’ as follows:
A subset of electronic 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.
Their cocktail party version is: ‘Social Commerce is the use of social media in the context of e-commerce.’ Or, as I would put it, ‘adding social media to e-commerce platforms’. According to a June 2010 survey by website conversion company SeeWhy, 35% of [U.S.] on-line marketers responsible for social marketing or ecommerce have already implemented Facebook’s ‘like’ plug-in, and another third plan to do so.
A few examples:
Urban Outfitters, Levi Strauss and bookseller Borders have started ranking products in their on-line catalogues based on likes, displaying the most thumbs-upped products first.
Shopping search engine TheFind has a search option where users could refine searches based on stores and brands they've liked elsewhere on the internet.
The Amazon-Facebook Alliance: when shoppers connect their Amazon and Facebook accounts, they will get recommendations on what to buy based on what their friends like.
But you could just as well turn it around and use the phrase to talk about e-commerce, used in the context of social media. Or, in other words: adding e-commerce to social media platforms.
For their launch of Toy Story 3, Pixar and Disney used a Facebook Page with a built-in ticket buying app.
A few examples:
In March 2010, Delta Airlines introduced their booking option through their Facebook page.
At the time of writing, Facebook Credits are ‘a virtual currency you can use to buy virtual goods in many games and applications on the Facebook platform.’ But since Facebook Credits accept credit cards, PayPal, Facebook Credits gift cards or mobile phone, it’s only a matter of time before this virtual currency makes the jump to the real world.
If we return to pure e-commerce players, there are two other phenomena that illustrate how dynamics from social media are used to drive sales: deal alerts, digital coupon clipping and group buying.
The idea is certainly not new: daily deal site woot.com has been around since 2004. Today, sites like ideeli.com, hautelook.com, gilt.com, and ruelala.com are rapidly gaining in popularity. Daily deal sites like these allow you to buy a single discount item a day. The deal itself can be a price drop, free shipping codes, or a limited time promo price. This makes you either come and check every day, or eagerly subscribe to any alert service (like, for example, a newsletter) they might offer. The poster child for deal alerts via Twitter is @DellOutlet. According to a June 2009 article on NYtimes.com, Dell tracked $3 million in sales through their Twitter account.
Digital coupon clipping is a way for people to save on costs, especially in these challenging economic times. But just like collecting badges on Foursquare, also a bit of a sport on its own.
Groupon is strictly speaking also a deal-of-the-day website, but with a twist: it is an example of crowd-driven sales. In order to get the special low price, people have to round up a minimum amount of other potential buyers. When Gap teamed up with popular group-buying site Groupon, they worked out a nation-wide deal: $50 worth of apparel for just $25. By the end of the day, 441,000 groupons were sold bringing in a little more than $11 million. Groupon has expanded to Europe, and Groupon clones have started to pop up all over the place.
For the sake of completion: with an app like Wildfire, businesses can offer their own group deals via their website or Facebook Page.
Groupon is strictly speaking also a deal-of-the-day website, but with a twist: it is an example of crowd-driven sales. In order to get the special low price, people have to round up a minimum amount of other potential buyers. When Gap teamed up with popular group-buying site Groupon, they worked out a nation-wide deal: $50 worth of apparel for just $25. By the end of the day, 441,000 groupons were sold bringing in a little more than $11 million. Groupon has expanded to Europe, and Groupon clones have started to pop up all over the place.
According to an August 2010 article at AdAge.com, GAP's famous mid-August campaign with deal-of-the-day website Groupon.com made $11,000,000 within 1 day. Launched in November 2008, Groupon is now one of the fastest growing companies, with hundreds of copy-cat sites all over the planet.
Regardless of where you live or what your beliefs are - it's that time of the year and you have to buy gifts. There are a few sites that already help you pick gifts, like these two:
But Etsy, an ecommerce website focused on handmade or vintage items as well as art and craft supplies, takes it up a notch by combining your social graph with gift ideas.
The Social Graph, a term first used by Facebook's Mark Zuckerberg in 2007, is often described as "the global mapping of everybody and how they're related". When it's used as a friends-powered filter of information and recommendations, this Social Graph becomes a powerful concept in that decisive “evaluation phase” just before buying stuff.
In the case of Etsy's Gift Ideas for Facebook Friends, you're able to "find unique gifts for friends based on their Facebook profile" and the preferences (or "likes") of that Facebook profile. Very powerful, and a really cool example of "social commerce".
Digital coupon clipping is a way for people to save costs, especially in these challenging economic times. But just like collecting badges on Foursquare, also a bit of a sport on its own.
Groupon is strictly speaking also a deal-of-the-day website, but with a twist: it is an example of crowd-driven sales. In order to get the special low price, people have to round up a minimum amount of other potential buyers. When Gap teamed up with popular group-buying site Groupon, they worked out a nation-wide deal: $50 worth of apparel for just $25. By the end of the day, 441,000 groupons were sold bringing in a little more than $11 million. Groupon has expanded to Europe, and Groupon clones have started to pop up all over the place.
However, according to a study of 150 businesses by Rice University's Jones School of Business, Groupon.com's coupon campaigns were unprofitable for 32% of the businesses that ran them. More than 40% of the response group said they would not run another social coupon promotion again.
Jones School associate professor Utpal Dholakia, the author of the research, uses two criteria to measure the profitability of a coupon promotion:
whether customers redeeming the coupons spent more than the coupon amount, and
what percentage of those customers came back again to shop without a coupon offer
Those survey respondents who said the campaigns had not been profitable for them, reported that only about 25% of redeemers spent more than the face value of the coupon. They also said that about 13% of those coupon holders came back a second time to shop at full price.
The 66% who reported these promotions as profitable said that 50% of redeemers spent more than the value of the coupon, and 31% returned to become customers again at undiscounted prices. But even some of those businesses who reported successful promotions said they would not be likely to run another campaign on the platform, because the offers did not draw the right customers.
Dholakia found that marketers who set a ceiling on the number of coupons offered through the platform tended to see more demand. However, only 11% of the businesses studied in the survey imposed such coupon caps, and those that did set them relatively high at an average of 2,190 offers.
Foodservice businesses sold significantly more coupons than other types:
Restaurants made up the largest single business category in the response pool (32.7%)
Educational services (14%)
Salons and spas (12.7%)
Tourism (8%)
Dholakia writes in the study that
there is disillusionment with the extreme price-sensitive nature and transactional orientation of these consumers [...] they are not the relational customers that they had hoped for or the ones [...] necessary for their businesses' long-term success.
The conclusion?
Coupon promotions can draw large customer surges into a business, but many of these will be either new users or price-conscious shoppers, unaware of the need to tip service employees or to tip based on the undiscounted price. Businesses need to consider that these consumers are bargain hunters. By nature they are frugal.
