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The Six Approaches to Social Shopping

With the growth in Social Shopping retailers have diversified six approaches to seize this new distribution channel.

This month Facebook announced they are testing a new ‘buy button’ to be added to brand’s newsfeed ads and page posts, designed to help businesses drive sales through the social network. Twitter has also announced the acquisition of payments infrastructure company Cardspring, to help deliver their vision of “in-the-moment commerce experiences”. This is the latest stage in the revolutionary new sales channel – social shopping - that has developed over the last few years primarily benefiting retailers and e-tailers. E-commerce has grown consistently since 2011 and with 77% of UK consumers turning to online reviews and friends’ opinions before making an internet purchase, it is no wonder that retailers have seized this behavioural change to diversify the way they distribute their products and services.

 

Having analysed retailers’ activities, Shoutlet.com, the social relationship platform, identified six different approaches to social shopping:

 

On-channel social shopping

This happens when brands use their social network pages directly for brand promotion. It can be done through varying forms of engaging written and visual content to help brands promote their products and services. If the latest Facebook and Twitter announcements are to be rolled out, soon users will actually be able to complete a purchase without even leaving these social networks. 

 

E-tail social shopping

E-tail social shopping happens when users share with their social community products that are connected with a specific e-tailer. Two critical examples come from e-tail giants eBay and Amazon. In 2012 eBay launched HelpMeShop, a browser plug-in allowing users to select items from anywhere on the web, and share them with friends on Facebook to seek advice on the best purchase. Amazon followed on the social shopping wagon earlier this year by extending its shopping basket through Twitter with #Amazonbasket, that allows users add items from Twitter to their basket, incentivising immediate purchase intent decisions.

 

Mobile Social Shopping

Out of those who made an online purchase through a social network, 35% from Twitter, 19% from Pinterest and 17% from Facebook, did so from a mobile or tablet device. With mobile purchasing being a big part of social shopping, retailers started benefiting from this channel through technology such as UK-founded Shopcade. App holders can save items and get alerts when those go on sale and receive relevant recommendations based on their social and traditional e-commerce data.

 

Social selling sites

Typically social selling sites are used within the fashion industry, where people can discover new products, brands and trends and might be able to share their style by posting photos, ask for and give advice. These types of socially driven sites tend to fall into two categories:

  •        Non e-commerce: Websites and blogs that normally develop through affiliate partnerships. Growing examples in the UK and Europe are lookbook.nu or wheretoget.it.
  •        E-commerce: Here, consumers are able to make on-site purchases. Growing examples are Net-a-porter, Asos and Fab that solely trade online and use social media as an essential part of their growth. Asos is one of Facebook’s best success case studies as it showcases its entire fashion catalogue through the site. Another great example comes from Fab that grew 300% year-over-year from January 2012 to January 2013 with 50% of its European members coming through social sharing. 

 

Social gifting and discounts

Social gifting is a well-established mean of social selling in the USA, but in Europe it still remains in its infancy. It enables people to give free and discounted gift cards to friends on social networks for brands of their interest, incentivising engagement and purchase. Back in 2012 platforms such as Wrapp and DropGifts were on the news as the upcoming social gifting platforms in the UK. Two years on, and DropGifts membership appears inactive, and Wrapp no longer operates in the UK. Does this mean that the trend didn’t get traction from UK consumers and the platforms relinquished their investments in this market? Its lack of success might well have been due to a cultural reason, but unlike social gifting, the discount industry with the likes of Groupon and LivingSocial grew rapidly in the UK since its launch in 2007/2008. Nevertheless, Groupon, currently valued at $4.5billion (£2.62billion), suffered a 35% drop in value when it first IPO’d in 2010. and hasn’t fully recovered since then. 

The facts and figures show that social gifting/discounts may have been more of a hype rather than a shopping experience here to stay, so retailers should consider carefully before making related investments.

 

Offline Social Shopping

Social shopping is not conducted exclusively online and retailers have in fact tried to capitalise on in-store social selling to increase offline purchases. An example of this was conducted by London’s largest shopping centre, Westfield, through the Tweet Mirror. Launched back in 2010 by Dutch technology company Nedap Retail, the mirror is placed in store enabling shoppers to share with their friends how an outfit looks via Twitter whilst still in the changing room.  

 

 

HOW RETAILERS CAN CHOOSE THE RIGHT SOCIAL SHOPPING APPROACH

 

Considering the different approaches to social shopping, something is evident: for retailers to benefit from social shopping they must understand which approach creates a more meaningful experience for their consumers. Brands can identify this through market research such as via a consumer survey or a competitor benchmark exercise to get to know customers’ preferences and whether they are already social shopping with competitors. Another way is to analyse traditional e-commerce behaviour to define whether consumers are likely to consider others’ opinions along their purchase path. Finally, by analysing their social behaviour including other likes and interests and most used social networks, will help retailers identify how to best bring their social behaviour together with the brand.

 

Roy Jugessur, Head of EMEA for Shoutlet that services a growing number of retailers and e-tailers, comments on what they’ve seen in the market: “Some retailers have grown product sales by double digits, simply by adding social shopping elements to their distribution channels, but retailers won’t be able to achieve this if they don’t take an informed approach to social shopping. With so many opportunities available to retailers nowadays, firstly, they must understand where customers feel compelled to comment, share or gather information related with their products. Shoutlet has helped several clients consolidate and segment their social data to drive conclusions on consumer behaviour and choose an impactful approach to social shopping.”

 

Commenting on the challenges upon strategy setup, Jugessur said: “Tracking the return on investment from social shopping paths can be considered a challenge to many retailers given the nature of social media. This is where technology such as Shoutlet can help monitor from the moment a fan engages with specific content through to purchase, so they can clearly track the benefits social shopping can bring to their business and justify to the boardroom for further investment in social.”

 

As technology and ease of communication have affected consumer behaviour, it is no surprise that retail brands need to change accordingly to meet consumers where they prefer to interact. Social shopping is certainly one of these changes and can bring a significant impact to retailers’ sales, when implemented through a purchase path that will be meaningful to consumers. For retailers to identify what the most effective path will be, they only need to turn to the same source for insightful data – social media.

 

 

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