How Social is Affecting Online Purchase Behaviour

I recently came across a very interesting presentation about social ecommerce called “The Social Shopping Explosion”, by Immediate Future. One of the main point of the slides was about how social is changing our online purchase behaviour and how brands are reacting to it.

Think about it, go back a few years (say five). Back then, when you needed a new pair of shoes (and you were just a bit online savvy) your typical journey would have probably looked like this: 

google.com > [pink leather shoes] > [Zappos] (ad or organic result) > [Zappos.com] >> purchase.
Your purchase decision was made off-line and you moved on-line to transact. We have all done that.    

Come back to present now. You are likely to be online 24/7, at your desk or on-the-go, and most of that time is spent on social networks, interacting with your friends, your followers, your colleagues, etc. It is increasingly more the case that your purchase decisions are being driven and affected by your social graph rather than by actual/immediate needs. It is pretty hard to argue against the fact that social media has significantly transformed our online behaviour and that our purchase decisions have now largely moved online.        

Companies like Blippy et al, Foursquare et al, Groupon et al, Polyvore, Modcloth, to name just a few, are leveraging off this trend. All they are trying to do is catch users and convert them to buyers during their regular online social activity. Other services, like Wishpot and Payvment, power brands with e-commerce solutions to sell through their Facebook fan pages.  

That does not mean that the traditional customer journey is no longer relevant. Advertisers will keep spending big bucks in trying to catch customers while they are searching for something. But the paradigm is clearly shifting, product discovery has become am much richer, social and collaborative experience. That explains Google’s rumoured plans to build a social layer called “Google me” on top of search, fearing that Facebook might actually end up overshadowing their highly profitable search business .

But what does that mean for brands then? 
What it means is that there are now greater opportunities to connect with customers across the social space, before, during and after the actual purchase. Those include social commerce (i.e. purchasing directly from social networking platforms), social communication (forums, blogs, communities) and social media “touch-points” (Facebook and Twitter pages). To the eyes of a brand, a social shopper is not longer just a buyer, but it is now also “an expert, a critic, an influencer and their best advocate”. Interestingly, according to a recent report by Synapse, well summarised here, a Facebook Fan is supposedly worth $136, based on the evidence that it is likely to spend more than a non-fan, that it is more loyal and more likely to recommend the product or brand.     

Fabio De Bernardi, head of European business development for Wishpot is convinced social shopping will drive online retail growth:  

I’m a strong believer in the rise of the importance of social shopping / social commerce (depending on where you look at it from, the buyer perspective or the seller’s) and in its becoming truly mainstream in the next 18 months max. I also believe that those forward looking brands that are positioning themselves now on this emerging channel will rip most of the benefits when buying from a Facebook page or by clicking on a YouTube video will hit prime time. And it won’t be long…

We’re clearly going to a direction where anyone (retailers included) fights against each other for 2 scarce things: time and attention. And it’s also clear that there are some new internet giants, Facebook first and foremost, attracting vast audiences and countless hours of web browsing. Therefore it’s essential to benefit from the rise of these new giants rather than going against them with a surpassed strategy (being only a stand-alone destination site doesn’t really work anymore in the current environment).

At Wishpot we’re seeing numbers growing constantly, not only for sales originated via Facebook and Twitter, but also for engagement metrics. In fact in social commerce there is an amazing underlying opportunity to create brand advocates just by enabling people to carry the brand’s products to their friends in a genuine and spontaneous way. Also, we’re seeing much more interest and understanding from retailers compared to a year ago, which means that among all the catch phrases and buzzwords more and more e-commerce and marketing directors are getting used to the idea of using social media as a way to drive money and better ROI to their company.”

 

Will Google succeed in its social move? I am long Facebook and short Google…

 

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