5 Social Shopping Trends Shaping the Future of Ecommerce August 18, 2011

Today’s Speakers

• • •

Lauren Freedman

Cathy Halligan

President, the e-tailing group, Inc.

SVP, Sales & Marketing, PowerReviews

16 years ecommerce consulting Author, It’s Just Shopping 50+ years traditional retail and catalog experience

The Voice of Cross-Channel Merchandising • Fortune 500 client projects ranging from strategic planning, merchandising, marketing, to technology development and messaging • Proprietary research studies on mystery shopping, mobile, merchandising and consumer behavior

•

Executive level roles in world class, growth oriented companies: Walmart (CMO walmart.com and VP Market Development Global eCommerce) Blue Nile (VP Marketing) Williams-Sonoma (VP/GM eCommerce & VP Marketing), Gymboree, (VP Marketing) & Prophet (Associate Partner)

•

Quoted on executive topics, retail, B2B commerce and the social web topics. Bloomberg West TV, Wall Street Journal, New York Times, Investor Business Daily, Forbes.com, Bloomberg BusinessWeek, Tech Crunch, Internet Retailer

2

#SocialFuture

Webinar Agenda 1. The e-tailing group Trend Tracker 2. 5 Social Shopping Trends Shaping the Future of E-commerce

Follow along on

#SocialFuture

•

2011 Social Shopping Study Results

•

Implications for E-commerce

3. 5 Trends Summary 4. Q&A 3

#SocialFuture

The e-tailing group Trend Tracker Social Shopping From the Merchant Perspective

4

Information Is Even More Essential to Decision-Making Consumers rely on the product page for comprehensive, compelling and consumer-focused content Customer Reviews

Q&A

Rich Media

5

#SocialFuture

Ten-year Product Page Tactical Penetration Indicates Important Evolution the e-tailing group Mystery Shopping Features STANDARDS Product Recommendations Video Zoom Alternative Views CATEGORY-CENTRIC Color Change Shop by Outfit View in a Room 3D COMMUNITY-CENTRIC Product Reviews Share Button "Like" Button

2010

2009

2008

2007

2006

2005

2004

2003

2002

98% 88% 86% 80%

98% 64% 88% 76%

95% 62% 90% 68%

96% 45% 86% 66%

90% 38% 81% 57%

88%* 20% 79% 45%

80% 8% 70% 21%

79% 12% 62% 12%

71% 17% 61% n/a

61%* 51% 49%* 18%

64%* 32%* 42%* 21%

60%* 39%* 27%* 10%

57%* 40%* 5%* 9%

46%* 24%* 11%* 14%

34%* 30%* 9%* 4%*

24%* 37%* 8%* 4%*

13%* 6%* n/a 4%

9% n/a n/a 2%

87% 75% 36%

74% 67% n/a

58% 28% n/a

50% n/a n/a

38% n/a n/a

32% n/a n/a

24% n/a n/a

n/a n/a n/a

n/a n/a n/a

e-tailing group Mystery Shopping Studies, 2002-2010 * Subset of 100 sites 6

#SocialFuture

Social Selling Strategies Make Headlines

7

#SocialFuture

Rich Media and Social Selling Strategies Continue to Rise Rich Media and Social Selling Strategies Continue to in Importance for for Delivering ROIROI Rise in Importance Delivering Ranking of Features Very Valuable to Neutral (Top-3) 2011 vs. 2010 In Ability to Deliver ROI +/- %

2011

2010

+/- %

2011

2010

Keyw ord search

99%

98%

1%

Recently view ed

73%

64%

9%

Cross-sells

96%

95%

1%

Brand show case

72%

59%

13%

Em ail as a m erchandising vehicle

96%

94%

2%

QuickView

72%

na

na

What's new

96%

87%

9%

Tw itter m arketing

72%

na

na

Sales/Specials

95%

94%

1%

Contests

69%

54%

15%

Seasonal prom otions

92%

95%

-3%

Free shipping - unconditional

69%

55%

14%

Top sellers

92%

88%

4%

Mobile com m erce

68%

na

na

Up-sells

92%

87%

5%

Wish lists

68%

53%

15%

Guided navigation

91%

70%

21%

Em ail custom er service alerts

67%

62%

5%

Search landing pages that are m erchandised

90%

87%

3%

Color change

65%

56%

9%

Advanced search

88%

78%

10%

Interactive tools

65%

35%

30%

Product ratings/Review s

88%

69%

19%

Gift certificates/Card via em ail*

64%

60%

4%

Free shipping - conditional

87%

55%

32%

Gift certificates/Cards via m ail*

63%

60%

3%

Alternate view s

86%

83%

3%

Product com parisons

63%

46%

17%

Coupons/Rebates

86%

80%

6%

Mobile applications

61%

41%

20%

Facebook m erchandising and/or m arketing

86%

na

na

Live chat

59%

45%

14%

Sharing via social netw orking

86%

63%

23%

Multiple ship-to's

59%

57%

2%

Category content

83%

68%

15%

Lim ited hour prom otions

58%

50%

8%

Exclusives

83%

77%

6%

As advertised/As seen in

57%

38%

19%

Zoom

81%

74%

7%

Frequent buyer program s

56%

46%

10%

Create your ow n custom /personalized products

Prom otional Incentives to buy

76%

58%

18%

50%

43%

7%

Video

75%

68%

7%

Shop by outfit/Shop by solution/View in a room

48%

38%

10%

Alternative or deferred paym ent m ethods

74%

66%

8%

In-store pick up and/or Returns

43%

24%

19%

33%

26%

7%

33%

22%

11%

Blogs

74%

52%

22%

Gift/Wedding registry

Gift center/Gift suggestions

73%

61%

12%

In-store product locator/look-up

* Not broken out m ail/em ail in prior studies

Source: 2011 e-tailing group Annual Merchant Survey 8

#SocialFuture

Merchants Embrace Social Opportunities • More than 750 million active users • 50% of our active users log on to Facebook in any given day • Average user has 130 friends • People spend over 700 billion minutes per month on Facebook

9

#SocialFuture

Beyond Reviews The Social Media Tools That Most Merchants Employ/Plan To Employ Are Facebook-Related

Employ Today

Plan to Employ in the Next 12 Months

Considering for Future, Beyond 1 Year

No Plans to Employ

Facebook page (com pany fan page on Facebook)

82%

8%

5%

5%

Custom er review s (user-generated product review s)

66%

20%

12%

2%

Tw itter publishing (m onitor, respond to and post tw eets)

53%

22%

13%

12%

"like" button on product pages (allow s friends to view other friends interests)

52%

30%

10%

8%

Blogs (periodic blog postings to your custom ers)

48%

22%

12%

18%

Social listening tools (tracking the sentim ent of online conversations about your com pany)

37%

26%

22%

15%

Viral videos (distributing user-generated videos or creating your ow n)

34%

20%

23%

23%

34%

29%

25%

12%

26%

22%

26%

26%

22%

20%

24%

34%

20%

26%

23%

31%

15%

32%

35%

18%

Which Community and Social Media tools does your company employ today or plan to employ?

Facebook connect (allow s users to post content about m y com pany to their friends) Questions and answ ers (custom ers asking and answ ering questions about your products onsite) Com m unity forum s (for conversations am ong custom ers & betw een you and custom ers) Product suggestion box (forum for custom er to share ideas/ suggestions for product im provem ents) Facebook shop (allow s shopping w ithout leaving the Facebook interface)

Q36

Source: 2011 e-tailing group Annual Merchant Survey 10

#SocialFuture

Merchants have yet to realize significant ROI from social programs

Rate your level of agreement with each of the following statements relative to your company’s ROI from social media initiatives.

Strongly Agree

Somewhat Agree

Neutral Agreement

Somewhat Disagree

Strongly Disagree

Social media is all about engagement and building stronger relationships with our customers

44%

36%

16%

2%

2%

We are testing social media and see our efforts to date as mostly R&D

25%

47%

16%

8%

4%

Social media tactics are growing our ecommerce business

12%

29%

30%

17%

12%

We have seen substantial or significant ROI from our social media efforts to date

4%

14%

37%

23%

22%

Q37

11

#SocialFuture

5 Social Shopping Trends

shaping the future of e-commerce 2011 Social Shopping Study Results

12

Survey Methodology In March 2011 PowerReviews and the etailing group fielded an online questionnaire to over 1,000 consumers (51% male/49% female) who shop online four or more times annually, spending over $250 via that channel.

Survey Objectives  Explore consumer utilization of social media across a range of merchants and channels to understand perception, interest and propensity to buy based on that engagement  Understand the consumer’s level of interest in community across the web and its implication on researching and shopping behavior

 Trend customer reviews and social shopping to monitor changing and evolving consumer behavior

13

#SocialFuture

5 Trends in Social Shopping 1

Consumers are spending more time researching, across more sources, expecting certain social tools in the process

2

Research starts with search, but SEO alone is no longer enough

3

Consumers use Facebook for sharing and discovery, not for research

4

On-site deployment of social tools has the greatest impact on e-commerce sales

5

Facebook’s Open Graph is emerging as the social platform of choice for e-commerce 14

#SocialFuture

1 Consumers are spending more time researching, across more sources, expecting certain social tools

15

#SocialFuture

Consumers are Researching Now, More Than Ever

What percent of your overall shopping involves researching products online?

50%

75% or more

21%

29%

50-74%

29%

15%

30-49%

24%

13%

15-29%

17%

8%

1-14%

8%

2011 None

2010

0% 1%

16

#SocialFuture

Time Spent Researching Online Assumes A Heavy/Medium/Light Mentality

Medium

Heavy

When shopping for an information-intensive product (computer, appliance, television, etc.) how much time do you typically spend online researching prior to completing the purchase?

More than a month

4% 4%

A month

3% 4% 18%

A few weeks

23%

12%

A week

29% 34%

Light

A few days A day

7%

2011 2010

11% 22%

A few hours

29%

Q6

17

#SocialFuture

Customer Reviews and Q&A are the most important UGC when researching Outside of the standard product information (images, descriptions, etc.) how important is finding the following user-generated content on a retailer’s site when researching online? (Top-2)

Customer Product Reviews and Ratings (peer-generated product reviews and related content)

48%

Q&A (customers asking and answering questions about products onsite)

31%

Product “Likes” (# people who have “Liked” a particular product)

Product “Likes” by People You Know (people you know who also “Like” a product you are considering buying) Community Forums (for conversations among customers or between you and other customers)

23%

22%

18%

Q6

18

#SocialFuture

Reviewing Products is the Social Activity that Consumers Participate in Most Frequently

When thinking about products or brands, how often do you participate in each of the following activities? (Top-3)

Rate a product purchased

70%

“Like” a retailer

49%

“Like” a manufacturer

49%

“Share” with others product you have browsed on a website

42%

“Share” with others a product you have purchased from a website

43%

Q6

19

#SocialFuture

Focus on thecontent fundamentals, tools consume most 2. Make easythe to social find and important to consumers in the shopping process

#1 Customer Reviews

#2 Q&A 20

#SocialFuture

Enhance the fundamentals with new social technologies

1.0

2.0

Star rating and text box (comments)

Format

Summarized, star rating & histogram, comments + structured, attributed data, rich media & reviewer verification

Search & sort by average rating

Search

Personalized search & navigation based on personality, pros, cons, best uses of a product

Not applicable

Social

Not applicable

Distribution

Open platform to syndicate & Distribute content across social web

Benefits accrued to consumers and ecommerce team

Insight

Benefits energize the entire organization

Facebook-powered reviewer profiles, comments & sharing

21

#SocialFuture

Do you know? 1.

Your UGC quantity?

2.

Your UGC generation effectiveness?

3.

Your UGC SKU coverage?

4.

The rate at which that UGC quantity is shared on the social web? And, the referral traffic and resulting conversion?

The number of customer reviews you have on your product pages Measured as the % of transactions that have UGC. Minimum performance is 2% of transactions. Best practice is 5%+ of transactions

Minimum performance is 35%+ of your core catalog

The value of a review shared to facebook is $15.72 with a $132 AOV

22

#SocialFuture

UGC Quantity and Coverage is the basis of the consumer research experience 35,000

Series2

IR50 multichannel retailer IR50 multichannel retailer IR50 multichannel retailer $250m home category online retailer Ebay store home improvement online retailer

30,000

25,000

Series4 Series5 Series6 Series8

20,000

15,000

-4X 10,000

.72%

-2X 5,000

.38%

+4X 0 Jan 2010

Feb 2010

Mar 2010

Apr 2010

May 2010

Jun Jul 2010 Aug 2010 2010

Sep 2010

23

Oct 2010

Nov 2010

Dec 2010

Jan 2011

Feb 2011

Mar 2011

Apr 2011

May 2011

#SocialFuture

UGC Quantity and Coverage is the basis of the consumer research experience Internet Retailer Top 100 Customer Reviews Coverage, % of total SKUs

88% 74%

46%

49%

38% 29% 16%

6%

10%

24

#SocialFuture

Make your content available wherever your customers are researching The social web allows for open distribution of content • Google • Facebook • Twitter • LinkedIn • Retailers • Manufacturers • Mobile Devices • Review Sites

25

#SocialFuture

2

2 Research starts with search, but SEO alone is no longer enough

26

#SocialFuture

Search engines are still the starting point for research

When researching branded products online prior to purchasing (e.g. HP computer, Panasonic TV, Nike shoes) which of the following most closely represents where you would begin that process?

I start with a search engine and look for top search results for products I desire

44%

I start with retailer sites that sell the product I’m looking for

33%

I start with the manufacturer’s site

20%

I reach out to my social network on Facebook for recommendations

I pose a question on Twitter

2%

1%

27

#SocialFuture

UGC is considered most credible on Amazon Please tell us how credible (or trustworthy) you feel the user-generated content (e.g. customer reviews and ratings, recommendations, etc.) is from each of the following locations. (Top-2) Amazon.com

63%

Review Sites

51%

Search Engines

50%

Retailer Sites

47%

Manufacturer Sites

38%

Facebook

21%

Twitter

15%

Followed by review sites and search engines. 28

#SocialFuture

1/3 of consumers are now using Google Shopping

Over the past year, Google has added more information about local retailers and their respective inventory. How would you characterize your current Google Shopping utilization? (Top-2: all of the time/very often) I use Google Shopping features to compare prices

31%

I use Google Shopping to read product reviews

29%

I use Google Shopping features to find local businesses carrying the products I'm searching for

22%

29

#SocialFuture

Make social content findable search 2. Make content easy to findinand consume

30

#SocialFuture

60% of the top retailers are missing the boat

31

#SocialFuture

Amazon and PowerReviews clients have indexable UGC directly on the product page

32

#SocialFuture

UGC is becoming increasingly prominent within the search experience

Q2 2011 Left Nav includes shopping

Search Refinement links to Google shopping

Shopping OneBox Links to Google Shopping

33

#SocialFuture

SEO is no longer enough, make your UGC present throughout the Google experience

34

#SocialFuture

3

3 Consumers use Facebook for discovery and sharing, not for research

35

#SocialFuture

More then 40% of consumers check their Facebook newsfeed daily or several times a day How often do you check your newsfeed on Facebook?

Several times a day

18%

Daily

23%

Once a week

11%

Several times a month

9%

Once a month

12%

Q26-27

36

#SocialFuture

Consumers participate in Fan Pages primarily to discover promotions Thinking about a retailer’s (or manufacturer’s) Fan Page on Facebook, please tell us which of the following statements are true for you. (Check ALL that apply) I participate in the retailer’s Fan Page on Facebook to gain access to promotions

43%

I participate in a retailer’s Fan Page on Facebook because I like or shop at that particular retailer

27%

I appreciate that a retailer’s Fan Page on Facebook makes it possible for me to interact with and learn from other consumers that share my enthusiasm in a given category

24%

I participate in the retailer’s Fan Page on Facebook to receive rewards points

24%

I interact in the retailer’s Fan Page on Facebook when I’m looking to get a specific question answered

23%

I interact in the retailer’s Fan Page on Facebook when I want to make a comment about a specific experience with that retailer

22%

I participate in a retailer’s Fan Page on Facebook because I want to feel like a part of that retailer’s community

11%

Q29

37

#SocialFuture

When shopping online, social sites are used primarily to discover the pros and cons of a product

How do you use community and social media sites when shopping online? I use community and social media sites to … (Check ALL that apply) I don't use community and social media sites when shopping online

53% 64%

To learn from others about the pros and cons of products

30% 24% 18%

To show my loyalty to my favorite brands

9%

To get the word out on the street or “buzz” about products of interest to me

11% 12% 10% 9%

To feel like part of a community

2011 6% 9%

To be a part of the “conversation”

2010

Q6

38

#SocialFuture

But still nearly 3/4 of consumers don’t turn to social sites to research

Overall, how often do you use social sites such as Facebook and Twitter for your shopping research to gather ideas? I always read and research on social sites to gather ideas

6%

I often read and research on social sites to gather ideas

10%

I sometimes read and research on social sites to gather ideas

13%

I rarely read and research on social sites to gather ideas

22%

I never read and research on social sites to gather ideas

49%

Q6

39

#SocialFuture

Focus Facebook efforts where your customers are participating most frequently, in the newsfeed

40

#SocialFuture

And ask consumers to like your brand at critical points within the on-site experience

41

#SocialFuture

And make it easy for them to share on-site content to the newsfeed

42

#SocialFuture

Consumers interacting with content in their newsfeeds can have a dramatic impact on sales

The Results

57% 70%

5X

$15.72

of all verified reviews are shared to Facebook

of all reviews shared to spur further engagement through Likes/Comments more reviews are shared with Facebook OnSite vs. traditional methods The value of a review shared to Facebook with Facebook OnSite.

43

#SocialFuture

4

4 On-site deployment of social tools has the greatest impact on e-commerce sales

44

#SocialFuture

Research is happening on the product page, which hosts the social features more important to e-commerce Please indicate the impact of the following Community and Social tools on your buying behavior. (Top-2: significant/good impact)

On-Site

Customer reviews (user-generated product reviews)

59%

Q&A (customers asking and answering questions about products on-site)

42%

Community forums (for conversations among customers or between you and other customers)

26%

Off-Site

Videos (viewing user-generated videos or creating your own)

15%

Facebook fan page (company fan page on Facebook)

13%

Facebook newsfeed (friends talking about products)

13%

Mobile (iPhone application, text alerts)

9%

Twitter (monitor, respond to, and post tweets)

9%

Q6

45

#SocialFuture

Nearly half of consumers say that an on-site community experience is a factor in their shopping behavior

How important is having a community experience on a retailer’s site to your likelihood of making a purchase from that retailer? 33%

23%

23%

Somewhat important

Only slightly important

16%

5%

Critical

Very important

Not at all important

Q23

46

#SocialFuture

With nearly 1 in 3 consumers actually participating in a brand or retailer community

How often do you participate on each of the following social networking or community sites? (Top-3)

Off-Site

On-Site

Enthusiast/Specialty blogs and/or community sites on topics of high interest to you (e.g. fashion, beauty, technology, parenting, etc.)

35%

Communities on your favorite retail sites

31%

Communities on your favorite manufacturer sites

30%

Manufacturer Fan Pages on Facebook

30%

Retailer Fan Pages on Facebook

29%

Q18

47

#SocialFuture

Expertise is the most important characteristic of other contributors within a community When you think about contributors in an “enthusiast” (or special interest) community you belong to, how important is it to know each of the following characteristics of those contributors?

74%

Length of ownership/experience with a given product

68%

Level of expertise in the category (e.g. expert, novice)

53%

Demographics (i.e. age, gender, household income)

Where they/you live (e.g. city, state; urban/suburban/rural)

Their/your picture

48%

30%

Q20-21

48

#SocialFuture

On-Site Community is used primarily to get questions answered and to gain access to rewards/promotions Thinking about a retailer’s community, please tell us which of the following statements are true for you. (Check ALL that apply) I interact with the retailer’s community when I’m looking to get a specific question answered

34%

I participate with the retailer’s community to gain access to promotions

33%

I participate with the retailer’s community to receive rewards points

29%

I interact with the retailer’s community when I want to make a comment about a specific experience with that retailer

27%

I participate in the retailer’s community because I like or shop at that particular retailer

23%

I appreciate that the retailer’s Fan Page on Facebook makes it possible for me to interact with and learn from other consumers that share my enthusiasm in a given category

Q22

15%

I participate in the retailer’s community because I want to feel like a part of that retailer’s community

9%

49

#SocialFuture

On-site, focus social is tools that give Situation: BBY on display complex &customers does notall the information necessary to make a purchase contain the core conversion driving elements 1. Rating histograms make it easy to see the rating breakdown across reviews.

1 2

2. 3 of 4 customers require pros & cons to make a purchase decision; make it easy for them to get what they want

3

4

3. Content (vs. histogram) summaries are critical to consumer decision making, especially when viewing on a mobile 4. Consumers’ #1 requested feature is the faceoff. 50

#SocialFuture

On-Site Community is driven by UGC

51

#SocialFuture

Integrated profile with world’s largest Improve credibility ofthe on-site content community and your shoppers with robust user profiles

52

#SocialFuture

Situation: BBY is complex & does not Within a display user profile, focus on profile contain the core driving elements elements thatconversion matter most to consumers

1

1. Profile Picture 2. Location

2

3. Expertise

3 4

4. Past Contributions

5

5. Verified Badges

53

#SocialFuture

5

5 Facebook’s Open Graph is emerging as the the social platform of choice for e-commerce

54

#SocialFuture

More people are researching on social sites than last year

50% 45%

47%

40% 35% 30%

36%

25%

2010

20%

2011

15% 10% 5%

0% Q6

Consumers using social networks for research

55

#SocialFuture

More then 1/2 of consumers are actively using the Like button across the web

Over the last 30 days, how many times have you “Liked” each of the following?

More than 20 11-20 times times

6-10 times

1-5 times

Never

A retailer

5%

7%

10%

34%

44%

A manufacturer

4%

5%

11%

31%

49%

A product

4%

6%

11%

32%

47%

56

#SocialFuture

Of the off-site social content, Facebook continues to show the most potential Please indicate the impact of the following Community and Social tools on your buying behavior. (Top-2: significant/good impact) Customer reviews (user-generated product reviews)

59%

Q&A (customers asking and answering questions about products on-site)

42%

Community forums (for conversations among customers or between you and other customers)

26%

Off-Site

Videos (viewing user-generated videos or creating your own)

15%

Facebook fan page (company fan page on Facebook)

13%

Facebook newsfeed (friends talking about products)

13%

Mobile (iPhone application, text alerts)

9%

Twitter (monitor, respond to, and post tweets)

9%

Q6

57

#SocialFuture

1 In 3 shoppers think it’s important for ecommerce sites to personalize their experience based on Facebook data

How important is it for you, as a shopper, to have a retailer personalize the site experience and connect product recommendations to your Facebook account? 54%

15%

16%

Somewhat important

Only slightly important

11% 4%

Extremely important

Very important

Not at all important

Q25

58

#SocialFuture

It’s early days for Facebook, but 1 in 2 consumers have or will connect from e-commerce sites Which of the following best describes your experience connecting to Facebook from a retailer’s site?

I have never connected to Facebook on a retailer’s site, but plan to in the near future

21%

I have connected to Facebook from a retailer’s site in the past

27%

I would never connect to Facebook from a retailer’s site

52%

Q24

59

#SocialFuture

Previously, sharing with Facebook was a one-way conversation

60

#SocialFuture

Today retailers and brands are integrating Facebook into their on-site experience

61

#SocialFuture

Start connecting with your customers via Facebook’s Open Graph today

62

#SocialFuture

Amazon paved the way with personalized Situation: BBY display is complex & does not recommendations based on Facebook data contain the core conversion driving elements 1 3

2

63

#SocialFuture

Facebook’s Open Graph allows for extreme personalization and a better shopping experience

64

#SocialFuture

5 Social Shopping Trends Recap 1

Consumers are spending more time researching, across more sources, expecting certain social tools in the process

2

Research starts with search, but SEO alone is no longer enough

3

Consumers use Facebook for sharing and discovery, not for research

4

On-site deployment of social tools has the greatest impact on e-commerce sales

5

Facebook’s Open Graph is emerging as the social platform of choice for e-commerce 65

#SocialFuture

Q&A – 10 minutes

Thank you. Thanks for attending. Please take a moment to complete our brief survey upon leaving the webinar. Today’s Speakers: Cathy Halligan Lauren Freedman SVP, Sales & Marketing President @CathyHalligan www.e-tailing.com

66

#SocialFuture

Click to edit Master tfdafdsadafssafdsafdsitle style

Social Commerce Success Planner