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Social commerce company Bazaarvoice has published its Social Commerce Trends Report for 2012, highlighting four key issues that it thinks will drive growth in this area over the next year.
The summary of its findings below is based on the company's social summit, which brought together thought leaders from the likes of Facebook, John Lewis, Dell and more this October.
1. Social is a paradigm shift
Thanks to the emergence of digital media channels, the way people shop is fundamentally and irreversibly different from a few years ago. We’ve moved on from brand-controlled messages to a world of empowered consumers in a channel-agnostic marketplace.
This brings with it new rules and metrics for acquiring, retaining and interacting with customers.
JP Rangaswami, chief scientist for Salesforce.com, calls the current era, "a consumer renaissance" - in which broadcasters no longer control when people see adverts.
The power of selling has been with the seller because of the broadcast model and advertising culture. Over the last few years, technology has changed. The customer is now exercising this power.
According to Gavin Sathianathan, Facebook’s head of commerce partnerships, we are moving away from the search era of the 90s and early 2000s to a new social web.
Search is still a critical mechanism for the web, but time spent on search is up just 1%, compared to a 50% increase in time spent on social networks."
Today, Facebook alone matches the size of the web in 2004 and time spent on social networks surpassed time spent on email two years ago.
To take advantage of this, brands must ensure there is a consistent customer experience across online, instore and mobile channels, and social must be a part of every aspect of the business.
2. Social data reveals the why behind the buy
Opinions from friends are still the most trusted source for purchasing decisions – 90% of consumers now trust peer recommendations compared to 14% that rely on advertising.
With the growth of social, consumer conversations are now available online giving businesses access to new data and an opportunity to align more closely to the needs of customers.
Rory Sutherland, vice chairman of Ogilvy Group, said that market research is decontextualised: it takes place far from the point in time and the environment where decisions are made.
Listening to people in social media is fantastic because the comment is made at the moment of high engagement. What you learn through this kind of medium cannot be gathered through research."
However data is only as good as the action it drives – businesses should refine data into insights and trends that drive action.
“The challenge, in a retail world driven by data, isn’t to get more data; it is to find out what to do with it,” added Ian Jindal, editor in chief at Internet Retailing.
Understanding trends in consumer data allows businesses to become more customer-centric, which is proven to drive sales, decrease returns and support costs, inspire product innovation, and power effective marketing.
“Our conversion rate is 150% higher where people have interacted with user-generated content, and the sales team always wants more content, as it impacts revenue,” said Max Sydenham, digital content manager at Buyagift.
3. Becoming customer-centric demands cultural and organisational transformation
Social media brings companies closer to their customers; the real people who shop for, buy, and use their products and services.
The shift in power from broadcast to fragmented media, from brand to consumer, from paid media to earned media, collectively requires a new focus for businesses: an obsessive devotion to understanding and delighting customers.
This calls for an organisation-wide cultural shift at every level.
Ab Polspoel, brand manager at Touring, said that opening up to the voice of the customer and letting go of control is difficult.
But [customer feedback] will happen anyway, so you better get involved in the conversation. What worked for us was to start small and have different departments involved – a multifaceted, slow-moving approach.”
A new approach to social media requires new types of organisations and they usually cross departmental borders.
Jeremiah Owang, partner at Altimeter Group, recommends that organisations who wish to pursue social move as quickly as possible to the hub and spoke model, where a core team gives guidance and sets parameters that allow multiple areas of the organisation to participate in social.
4. Context is king in social data
Finally, placing social in the right context is critical to successful outcomes.
This not only means considering social efforts in the context of broader business goals, but also considering the context in which to present social data so that it is useful across the enterprise.
“It’s bigger than a business strategy, bigger than a social strategy. This is a strategy fundamentally about people and customers. And one of the ideas around social is that it is a means to an end,” said Erin Nelson, chief marketing officer at Bazaarvoice.
You can download a full copy of the report here.