Six Pixels of Separation - The Blog
September 15, 2008 5:12 PM

Social Media And The Reluctant Retailer

Do you think retailers are really embracing the digital channels and making them work?

If converting a browser into a customer is any indication, the general answer is "no." Granted, we're basing this solely on the fact that the average conversion rate for e-commerce websites still sits at around 2%.

Imagine that: 98% of the people who come to your e-commerce site do not buy.

This week, Shop.org (which is the largest association for merchants who sell online) is holding it's annual summit in Las Vegas. Over 3000 people attend to learn what worked, what's working and where this all might be going. It's heavy Digital Marketing immersion. It has to be. Retailers fight for commerce in a way only few of us can understand. A retailer's business model is based off of how they can best maximize every square foot of their retail footprint. This is, fundamentally, why we've seen slow adoption of digital signage and a lack of really deep diving into the digital channels. Not everyone falls into that categorization, but the industry as a whole is looking to better understand how to be more effective and build revenues online while at the same time maintaining their dollars per square foot.

Social Media and the Reluctant Retailer.

That's the title of my presentation tomorrow. The spirit is to help people who sell online to better embrace the Social Media and Web 2.0 opportunities, but there's a major problem with my presentation and the concept: if people are hanging out and connecting to one another, they're not shopping. If they are reading peer reviews and watching online videos, they're not shopping. If they're not pumping the 1-click-to-buy button, they're not shopping.

Why would any e-commerce website owner want to give a potential customer anything that distracts them from shopping? 

Because shopping isn't just shopping. The very nature of it is community-driven. Think about your local shopping center or any major downtown strip that hosts the latest and biggest retailers. They're not just places to ring a cash register, they are places to go, to be seen, to hear things, to see things... the new town hall.

The online experience needs to be more social. If it is, people will spend more.

I recently saw a quote that stuck with me:

"Experiences satisfy the soul."

We got out, we shop, we meet our fellow community members and we live and breathe these experiences. All of which provide some level of self-actualization and satisfaction. Further more, the online channels do provide a chance to engage in a similar experience. Let's not debate online communities versus real-world communities, let's just accept the fact that people do feel as strongly about their Facebook community as they do about anything else.

Social tools enable you to get your consumers excited about your products and services. It enables them to connect and freely talk about what you do to make their lives easier. The strategy and tactics behind pulling it all together is the challenge. Getting buy-in from your senior management while they keep trying to increase revenue per square foot will be a challenge, but - in the end - bringing people together to connect is going to change everything you know about selling online (in the best possible way).

I just noticed that the H&M Fan Page on Facebook has over 250,000 fans. There's some great communication going on there between customers. There's also some great communication going on between H&M and their clients.

Last thought: imagine how all of this will shift again once mobile devices like the iPhone and BlackBerry Bold really take hold. Just watch and see how the social, mobile and real-world collide in a brand new opportunity.

What do you think the online shopping experience could use (beyond better pricing, free shipping, etc...)?

By Mitch Joel


Comments Comments Feed
  • The Holy Grail in local search is product inventory of small businesses. My question for the e-com world would be: how do we bridge the gap between e-commerce and local search?

    Reply
  • Posted by LJ Jones
    Mitch Joel

    It seems that retailers get caught up thinking that shopping is the act of pushing the "BUY NOW" button. Its much more than that. Its an experience. By only focusing on the moment when the transaction takes place, we lose site of all of the other important factors that influence someones purchasing decisions and lead up to that moment. Maybe the reason that e-commerce sites only have a 2% conversion rate is because they focus on the action rather than the experience as a whole. Its time shopping became an experience rather than an action.

    Reply
  • Posted by Parth Shukla
    Mitch Joel

    The short term focus on the click-through of the "buy" button is equivalent to CEO's focus on the next quarter's revenue. Its important but not the end.

    Sure you can probably the click-through or short term sales really high for a while by focusing on promotions, but by building and nurturing a community of interest you build brand equity and loyalty that will pay back over several years in increased lifetime value from that customer.

    And lets not forget a community of interest can also help you lower after sales service costs--which equals direct savings.

    Online shopping could really use a healthy dose of brand building, multichannel buying capabilities & a community of interest.

    Reply
  • Posted by Bessy Nikolaou
    Mitch Joel

    Imagine if an e-tailer had their very own organically grown community of brand champions. For ex: allow those passionate about Francisco Biasia to tell the world why they are so passionate about this luxury brand. I based my purchase decision once on comments from a community of handbag lovers... they went so far as to describe the touch and smell of a particular hangbag I wanted. Brands need to encourage this conversation on their very own e-commerce sites. Stifling the conversation will keep them at a 2% conversion rate (IMHO).

    Reply
  • Posted by Ethan Goodman
    Mitch Joel

    Creating an engaging experience is key. Part of the charm in shopping at the Apple or Nike store, for example, lies in just being there - to navigate your way from table to table (or floor to floor), to browse and interact with new products, to stop and check out innovative displays, to speak with customer service reps firsthand, etc. Rarely do I (and others, I assume) make in & out trips to those stores or to buy something specific and leave - I go for the adventure.

    Wouldn't it be cool if we could replicate this experience (more or less) online? Create an interface that allows shoppers to... Virtually walk the store as they would see it in person? Stop and peruse new products along their journey? Pick a product off the shelf and view a virtual demo? Try on clothes in a virtual fitting room and see how they look on their personalized avatar? Have a real-time conversation with a customer service rep when a question arises? Engage in product or brand-related conversations with other e-store patrons?

    Retailers have to strike a balance between delivering the convenience of E-Retail and the experience of brick & mortar shopping.

    Reply
  • Posted by Stanley Stevens
    Mitch Joel

    While I agree with Ethan on the concept of shopping as an experience, it's more than just replicating the traditional means of walking through a grocery store. It has to be social...which includes live discussions, comments and reviews, all integrated with interactive tools and rich content. Above all, it has to be social with the people we trust most. I don't usually go to the mall by myself or to have interactions just with a customer service rep (they're not THAT friendly), I often go with friends, family, I go to see who else is roaming the store/mall and sometimes, just simply, to be out and be social.

    Furthermore, how this is integrated into soical media and more specifically, social networks like facebook, is through the social reccomendation and immitation of your friends likes and dislikes. I may not think im in the "shopping mode" while browsing facebook, but when I see a friend bought concert tickets to John Mayer, I'm not only reminded that I love John Mayer and need to buy tickets, but I have an added incentive to go because my friend is going.

    Reply
  • Posted by cathy healey
    Mitch Joel

    I've read some articles lately about 'social commerce'. A blend of social networking and shopping. The best example is threadless.com.

    It's social, but focused on shopping. Plus it's business model is based on consumer contributed design and mass customization.

    Companies like baazarevoice come in second providing tools for post purchase feedback. pets.com is one of their sites.

    Most social commerce sites are social with commerce as an afterthought. I even came across an MLM model where the product input is primarily from the network. Eya!

    Do you think there's a market for a whitelabel solution that follows the threadless model?

    Reply
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