Social Commerce Plan (3000 word)

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LectureW7Chapter6SocialShoppingRev9.pptx

Chapter 6

Social Shopping:

Concepts, Benefits, and Models

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Unit objectives

1. identify the various tools of social media and describe how those tools are used to engage customers

2. identify, analyse and critically assess the suitability of various social commerce models and strategies for various e-businesses

3. explain the various principles and theories of social commerce

4. describe, explain and propose the appropriate marketing communication that could be conducted in various social commerce models

5. describe how social commerce aids customer relationship management

6. explain and understand the implementation issues in social commerce.

Learning Objectives

Define social shopping & discuss its drivers, concept, participants & benefits.

Describe how do social shoppers use social media as they move through the consumer decision-making process? Which social commerce elements (shopping tools) should marketers employ to meet social shoppers’ needs?

Describe models and components of social shopping .

Define group buying and flash sales

Describe shopping communities & collaborative shopping.

Describe social recommendations

Describe social marketplaces

Definitions, Drivers, Concepts, and Benefits of Social Shopping

Social shopping is defined as “online shopping with social media tools and platforms and sharing shopping experiences with friends.”

Uses key features of social media (e.g., discussion groups, blogs, reviews, etc.) and uses them before, during, and after online shopping.

Definitions, Drivers, Concepts, and Benefits of Social Shopping

The Drivers of Social Shopping

The large number of people visiting social networks attracts advertisers.

Changing customers’ shopping habits

The increasing number of recommendations /suggestions made by friends/others

The pressure from top management to increase effectiveness and efforts to improve overall efficiency of marketing. Why social shopping improve efficiency?

More and more using online social shopping features e.g. use reviews, ratings – thanks to Agoda, booking.com

More people trust reviews particularly from friends and family members

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Figure 5.3 Proportion of Consumers Expressing Trust in Media

Sources:

Nielsen Trust in Advertising Survey 2011 (blog.nielsen.com)

Edelman Global Trust Barometer (trust.edelman.com)

Vision Critical Study (U.S. only) (womma.org)

(Strauss & Frost 2014)

http://www.edelman.com/insights/intellectual-property/2014-%20edelman-trust-%20barometer/about-trust/global-results/

Definitions, Drivers, Concepts, and Benefits of Social Shopping

Concepts of Social Shopping

Where Is Social Shopping Done? Social Network, existing EC site, social marketplace and shopping communities

How? 2 ways company perform social shopping:

Add e-commerce functionalities (e.g., e-catalogs, payment gateways, shopping carts) to social network sites. Instagram/Instagram, “shop now” button.

Add social software, apps, and features (e.g., reviews, ratings, voting, etc.) to existing e-commerce sites.

Definitions, Drivers, Concepts, and Benefits of Social Shopping

Why Shoppers Go Social

Communal shopping - method of shopping where consumers enlist friends and other people they trust to advise them on what products to shop for.

This results in more confidence in the decisions they make—whether or not to buy (social proof or a phenomenon known as the “bandwagon effect”).

Social Commerce Psychology – “harnesses the human capacity for social learning , i.e. learning from the knowledge and experience of others we know and/or trust &… profit from social situation” (Marsden 2009 ).

Social Psychology Theory Applied

The Universal Heuristics of Shopping (Robert Cialdini , 2008), Shoppers use thin sliced information:

social proof (follow the crowd)

authority (follow the authority)

scarcity (scarce products must be good)

liking (follow those you like)

Consistency & commitment after agreeing

reciprocity (repay favors e.g. get RM10 coupon).

https:// www.youtube.com/watch?v=0qelyk_mWBs

Social shopping tools are designed with these influence factors to facilitate consumer movement through the purchase decision-making process.

Participants (Who?)

People’s Roles in Social Commerce

Connectors: people with contacts that

introduce people to each other

Salespeople: influence shoppers to buy

Seekers: consumers seek advice

Mavens: recognized, but unofficial experts who can provide positive or negative recommendations to people who are seeking advice

Benefits of Social Shopping

Benefits to Buyers

Get super deals via group buying, daily specials

Socialize while shopping and receive social support and rewards

Discover products/services you never knew existed

Interact directly with vendor (brand) representatives easily and quickly e.g. chat

Benefits of Social Shopping

Benefits to Sellers

Improve overall sales unit productivity - how?

Gain feedback from new customers e.g. rating of products and sellers

Learn from customers e.g. https://www.youtube.com/watch?v=1ByDmQICXs4

Increase customer loyalty and trust - why?

Quickly liquidate overstocked or obsolete merchandise e.g.?

Friend recommend friend; influence of ratings and comments; viral marketing through share/tagging to FB, twitter, etc.

Monitor and magnet – listening to customers’ needs, interacting with them and creating and communicating value based on needs.

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Learning Objectives

Define social shopping & discuss its drivers, concept, participants & benefits.

Describe how do social shoppers use social media as they move through the consumer decision-making process? Which social commerce tools should marketers employ to meet social shoppers’ needs?

Describe models and components of social shopping .

Define group buying and flash sales

Describe shopping communities& collaborative shopping.

Describe social recommendations & marketplaces

Provide examples of other innovative shopping models.

The consumer decision-making process (Tuten)

Problem recognition

Information search

Alternative evaluation

Purchase

Post-purchase evaluation

Stage 1: Problem recognition

Problem recognition is facilitated by several social commerce tools:

Social ads on social networking sites

Shared endorsements from friends posted in activity streams

Curated images and lists on sites like Pinterest

Location-based promotions (e.g., Yelp)

Participatory commerce (e.g., Threadless, Betabrand)

Betabrand crowdsources product design using social media, an approach called participatory commerce. One success story is its “dress yoga pants” which solve the problem women face when dashing from work to yoga class!

Credit: iStock.com /Dragonimages

Stage 1: Problem recognition

Stage 2: Information search

Information search, ZMOT, is facilitated by several social commerce tools:

Comments and conversations throughout social channels

Ratings and reviews posted on sites (e.g., Yelp, Zagat, Citysearch)

Product and pricing information tagged to image posts

Social search queries on social network sites

Social sharing of wish lists and gift registries

Conversational commerce (chatbot services)

The prevalence and availability of information online, including via social channels, have changed the information search experience.

Tuten, Tracy (TT) - it would be good to use this if possible. it is from Google's ZMOT information. Or to reconstruct if that would be permissable.

The power of ratings and reviews

95% of consumers report having read reviews prior to making a purchase decision.

66% of consumers read 1–10 reviews before making a purchase.

70% of mobile shoppers are more likely to purchase if the mobile site includes reviews.

82% seek out negative reviews as an indicator of authenticity.

60% have viewed a review on their smartphone while shopping in-store.

Transparency in reviews

81% difficult to distinguish what is authentic user content

21% have seen customers be paid or incentivized to post a positive review

Research found only 1.5% legitimate review! Mostly are incentivize reviews.

Most people believes reviews from their friends and relatives

Large volume reviews are more believable.

Small volume reviews – user rely on expert reviews.

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Stage 3: Evaluation of alternatives

Evaluation of alternatives based on certain criteria is facilitated by several social commerce tools:

Bar code scanning/price comparisons using mobile phone apps – Amazon price check

Recommendations, testimonials, recommendation agents, and popularity filters

Ratings and reviews

Stage 4: Purchase

Purchase, FMOT, is facilitated by several social commerce tools:

Social shopping malls (e.g. Lazada, Shoppee)

Shop within network options (e.g., Facebook Buy, InstaShop, Snapchat Deeplinks)

Social Bookmarking Sites (Pinterest, Wanelo)

Group buys (e.g. Groupon)

Conversational commerce (chatbot services)

Stage 5: Post-purchase evaluation

Post-purchase evaluation, SMOT, is facilitated by several social commerce tools:

Comments posted on social network sites

Request for help or comment to brand on social network sites

Participation in loyalty program

Submission of ratings and reviews on retailer website

Reviews and product experiences posted on blogs

Learning Objectives

Define social shopping & discuss its drivers, concept, participants & benefits.

Describe how do social shoppers use social media as they move through the consumer decision-making process? Which social commerce elements should marketers employ to meet social shoppers’ needs?

Describe models and components of social shopping .

Define group buying and flash sales

Describe shopping communities & collaborative shopping.

Describe social recommendations & marketplaces

The Major Models of Social Shopping

& Innovative models

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Components in a Social Shopping Site

Visual Sharing. Photos, videos, and images enable shoppers to visually share the product.

Online discussions. Ratings, reviews, interactions, recommendations, blogging, and comments facilitate discussions regarding features and benefits of products.

How to use products. These demonstrate, via videos, blogs, and step-by-step instructions, how to use products.

Guides. Guides are created by user-generated content (UGC). The users can be experienced consumers, experts, or employees.

Shopping Mechanism: Shop button

Learning Objectives

Define social shopping & discuss its drivers, concept, participants & benefits.

Describe how do social shoppers use social media as they move through the consumer decision-making process? Which social commerce elements should marketers employ to meet social shoppers’ needs?

Describe models and components of social shopping .

Define group buying and flash sales

Describe shopping communities, shopping clubs, & collaborative shopping.

Describe social recommendations & marketplaces

Group Buying

Group buying model describes a group of people who come together to get a quantity discount e.g. Deals Malaysia, Groupon

Group buying in China take on the culture from physical collaborative buying

https :// vimeo.com/8619105

Very competitive – Gaopeng, Meituan, Tencents, Taobao

https:// www.youtube.com/watch?v=UvWU8-NDUWY

Why Groupon closed its group buying channel?

2000 group buying companies in China

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Crowdsourcing – getting the numbers

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Deal Purchasing

Deal Purchases are Flash Sales & Daily Deals

e.g. Catch of the Day, Groupon

Daily Deals are limited time offer in one city e.g. Big Sale

Why is it possible for the merchant to sell cheap in flash sales/daily deals?

https://www.catchoftheday.com.au/

Learning Objectives

Define social shopping & discuss its drivers, concept, participants & benefits.

Describe how do social shoppers use social media as they move through the consumer decision-making process? Which social commerce elements should marketers employ to meet social shoppers’ needs?

Describe models and components of social shopping .

Define group buying and flash sales

Describe shopping communities & collaborative shopping.

Describe social recommendations & marketplaces

Online Social Shopping Communities

Like minded people share, discuss & help each other in their shopping. Not necessary to have a shopping mechanism.

Common Features in Shopping Communities

User forums: Discussion, comments, ratings, likes, voting, etc

Galleries: image, videos, products by hosting companies for discussion e.g. items in Polyvore (now Klook)

Idea boards: crowdsourcing e.g. sets in Polyvore

Q&A

Examples of Shopping Communities

Polyvore (polyvore.com) now replaced by https:// shoplook.io/home

https :// vimeo.com/7800846

Lowyat.net – technological products

Polyvore (now shoplook)

User/Merchant create set (crowdsourcing) including celebrity like Lady Gaga

Set get evaluated (crowdsourcing)

Encourage social shopping

20 million visitors, 2.2 million items, 3 million sets

Also include interior design

https://shoplook.io/home

Collaborative Shopping

Using IBM software, shoppers can invite friend to shop together in real-time. Two shoppers are synchronized in all they do.

Watch video https :// www.youtube.com/watch?v=HIp4S4zTzMk

Learning Objectives

Define social shopping & discuss its drivers, concept, participants and benefits.

Describe models and components of social shopping .

Define group buying and flash sales.

Describe shopping communities & collaborative shopping.

Describe social recommendations & marketplaces.

Recommendations sites

Customer ratings and reviews. found on product (or service) review sites (e.g., yelp.com, viewpoints.com, reevoo)

Customer testimonials. Customer experiences are typically published on vendors’ sites, and on third party sites such as TripAdvisor.

Conversational marketing. People communicate via e-mail, blog, live chat, discussion groups, and tweets. Monitoring conversations may yield rich data for market research and customer service e.g. Dell Monte Food

Video product review. Reviews can be generated by using videos through communities such as Youtube.

Sponsored reviews. These are written by paid bloggers or domain experts.

Which zones – Social publishing – yelp, reevoo, youtube, sponsored review/blogs

Social commerce – customer review and testimonial, conversational marketing (Del Monte food).

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Social Recommendations

Recommendations from someone you know

Social Bookmarking: Pinterest – pin boards of recommended products/services; Wanelo – like Pinterest but focused on shopholics. For both buyers and sellers. https:// www.youtube.com/watch?v=Z2A2F6rNatA

Personal Social Recommendations: recommend a friend using Facebook connect - Netflix

Referral programs: Groupon recommend a friend to buy. booking.com, agoda, etc.

Collaborative filtering: algorithm based on people like you e.g. Lazada, Netflix. Use filter “people like you” in Reevoo

Social Marketplaces

A many-to-many marketplace that enables buying and selling. Intermediary that provides infrastructure & procedure for transactions including display, discovery, interaction, comparison & payment

Different from shopping community which focus on discussion helping the shoppers to share/solve problems

E.g.

Lazada , Shoppee , Ebay

craigslist.org – classified ads

us.fotolia.com – trade photos and image

flipsy.com – trade anything but using buy back model