The buzz today everywhere is about harnessing the marketing power of social media to suit business needs. One of the more intriguing trends in Social media marketing is that of Social Shopping. Social shopping in simple terms is a hybrid of online shopping and Social networking.
Leveraging the power of social networking sites like facebook twitter is important in the context of e-commerce. This is because as more and more people take to online shopping for their shopping needs, and many of them are also tending towards online recommendations via social media. A Nielsen survey done in 2008 suggests that the internet has opened up a new world of shopping for a lot of customers. One of the important findings from the survey is that most of the customers, in fact, over 25% of them rely on recommendations when it comes to deciding where to buy from. Thus, recommendations play a heavy role in the decision making process. The below extract from Nielsen global consumer report of June 2010 clearly shows the power of recommendations when it comes to online shopping. Evidently, recommendations and reviews online are very important for a lot of purchase decisions.
The power of word-of-mouth is further made clear from the survey done by Harris interactive in April 2010 among 2000+ US adults.71% claim reviews from family members or friends exert a “great deal” or “fair amount” of influence. It’s not just about whatpeople are sharing about themselves through social media; it’s why they are sharing. Nearly 38% say they aim to influence others when expressing their preferences online and almost half 46% feel they can be brutally honest on the Internet.
This however, is nothing new when looked at from the larger perspective. Word-of-mouth has been one of the most powerful recommendation systems from a long time. It is the space and mode of transmission of word-of-mouth that has changed. The power of social media is very unique in this aspect. This is exactly where websites like ShopSocially , Kaboodle, Swipely that are based on the idea of recommendation based social shopping come into picture. Such websites exploit the power of recommendation based social shopping and provide a win-win model for both the customers and the sellers/online retailers.
Unlike the other recommendation based systems in the market there is something unique about the model used by ShopSocially and other websites like it. It is built on how friends help friends shop.
It gives a social twist to the shopping experience. Social shopping essentially is about gathering people friends or strangers alike into one place and let them exchange or swap their shopping experiences. When you want to shop for a product on internet and websites like ShopSocially offer a plethora of information. You would immediately get to know answer to questions like has any friend of mine brought this product?, how much did they buy it for?, where did they buy it from?etc. Apart from the assurance that someone you know has already brought the product, what this helps you in is that it builds credibility on the retailer in your mind. Also you may get to know about deals or offers at a retailer. The best part is that you can rely on the recommendation, unlike, a myriad of others that are available on internet where you may or may not know the credentials of the person who recommends.
Another aspect of social shopping is it makes it easy for you to go public about your shopping experiences. You can proudly show your purchase across to the world and get instant feedback on your purchases from your near and dear. For the retailers this offers tremendous opportunity as they get a lot of traffic back from such websites and a lot of this traffic can be converted into a new purchase.
The opportunity in this space for firms like ShopSocially in emerging countries like India is also steadily growing. According to Nielsen online shopping report 2010 Half the Indian consumers (50%) use social media sites to help them make online purchase decisions. This percentage is particularly high for the Asia Pacific region at 60% who use social media sites to help them make purchase decisions (compared to 43 % globally). According to the Nielsen report, 71% Indians trust recommendations from family when making an online purchase decision, followed by recommendations from friends at 64% and online product reviews at 29%. What is particularly interesting in the context of opportunity for websites like ShopSocially is that half the Indian consumers (50%) use social media sites to help them make online purchase decisions.
The quote below in a press release from a Nielsen director captures the scale of opportunity in this space : There is a bit of a silent social media revolution going on in India at the moment and it is largely mistaken for just social networking. The truth is that discussion boards, forums and review sites are seeing high growth in terms of conversations and this is where many shopping decisions are being made.
Some of the social commerce statistics provided on Bazaarvoice provide fascinating insights into this space. According to the website 53% of people on Twitter recommend companies and/or products in their Tweets, with 48% of them delivering on their intention to buy the product. 81% of respondents said they’d received advice from friends and followers relating to a product purchase through a social site; 74 % of those who received such advice found it to be influential in their decision.
Clearly recommendation based social shopping is not just another variant of social networking. Its business value goes much beyond that. The power of conversation based shopping is huge and what the world is seeing now is just the tip of the iceberg. As more and more people take to the internet for shopping needs the scale of these conversations is all set to increase. Websites like Shopsocially are thus eyeing a huge opportunity and have the potential to change the way we think about online shopping.
Guest Post by Halley Kalyan, an MBA student at IIM Lucknow-India, now working IT in an R&D Organization.