How Social Commerce Is Winning By Going After The Entire Shopping Experience, From Browsing To Sale

September 12, 2013 Leave a comment

How Social Commerce Is Winning By Going After The Entire Shopping Experience, From Browsing To Sale

COOPER SMITH SEP. 11, 2013, 10:15 AM 752

bii-social-commerce-funnel

If social commerce is ever going to fulfill its ambitions, it must go after all parts of what is known as the consumer purchase funnel. The classic funnel might be divided into three main stages: consumers discover new products on Facebook or Pinterest, then form an opinion, and finally move on to the purchase stage.  Social commerce is all about inspiration and product discovery, but entrepreneurs and retailers are anxious to transform that interest at the “top-of-the-funnel,” into sales. In a new report from BI Intelligence, we analyzed the most recent data and spoke to leaders in the social commerce space to understand how their companies are adding value at different stages of the retail and e-commerce purchase funnel. To do so they’re building social networks around e-commerce platforms, partnering with brands, or otherwise transforming social commerce’s strengths in Pinterest-style digital window-shopping into a clear value proposition. Here’s how social commerce companies are driving sales: It’s not about click-to-buy: Social commerce is not simply transactional — it’s not just about offering a click-to-buy link next to an offer on Facebook. Social commerce will never be what some have wanted it to be, an “Amazon killer.”

What will help social commerce grow as a sales driver? The key is to help connect the funnel end-to-end, or to connect different mediums — say, social media and TV — to help coax a consumer down the funnel.

There are a few ways to encourage purchases: Retargeted advertising may be one missing link. It enables social commerce to connect the sales funnel from end-to-end by serving ads that remind users of products they have browsed across the Web but have not yet purchased. So far, only Facebook has developed this capability.

Also: Clever merchandising and user interfaces allow for sticky merchant-to-consumer relationships that can help nudge a consumer toward purchase over time.

Finally, referrals shouldn’t be discounted: Another solution is for social commerce to develop as a sales referral engine, and take a cut of the sales. If social commerce sites have a large enough audience, even a low referral and conversion rate will result in a good revenue stream.

In full, the report:

Explains how time-sensitive offers on social media can motivate users to snap out of casual browsing or social media-grazing and into a buying mood

Includes interviews with three social commerce industry leaders

Discusses why Twitter has a unique opportunity at the bottom of the funnel

Looks at Pinterest’s prospects as a top-of-funnel platform

Examines Facebook’s mothballing of its physical gifts program and the success of its ad-retargeting platform, FBX

Reveals average order values and order volume for a leading social commerce platform

Breaks down the share of social media-generated e-commerce sales for each social network

Looks at the demographics of social commerce consumers

Compares Twitter, Facebook and more traditional digital methods of retail customer acquisition such as search engines

Filed under TMT Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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