Many companies are now starting to learn that the money to be made from social media isn’t all about building up a huge amount of followers on Facebook and Twitter then finding a way to get them off there as quickly as possible, to ‘convert’ on the website. The smart brands are recognising the huge value that lies in social technologies themselves, developing new ways to monetise their products, and indeed adapting the products that they offer in the first place. Below are some of the biggest growing areas of commerce through social technologies, that may point to a change in commerce trends altogether :
Buying on Facebook
Delta Airlines made big headlines earlier in the year when they introduced their first Facebook shop, allowing consumers to purchase tickets without having to leave Facebook. Thousands of other companies have now followed suit and instead of forcing customers to click through to the site to complete a purchase, are now offering this in the platform in which the consumer started. The stats are pretty compelling, as a recent survey reported that shoppers on Facebook have 7-10% larger shopping carts than the average consumer online. It’s easy to see how this can be the case, as consumers that are investing time in a brand on Facebook will have a higher interest than the average consumer.
At Simply Zesty we’ve done some work with Vendorshop (disclaimer!)! and the CEO has discussed with us the huge potential of Facebook commerce for small businesses as well. There are significant opportunities here for businesses that can use plug-ins on their page, which is certainly a cheaper alternative to building an ecommerce platform on their site. The nature of small businesses on Facebook as well is that they are likely to build up much stronger relationships with their consumers, which will lead to an increased likelihood of a sale. And the beauty of Facebook commerce is that it’s down to you as the business to use this to your advantage. One company reported sales multipled by 10 x times when they integrated the Facebook Like button on their site in a promotional campaign.
Many brands are now experimenting with serious advertising campaigns within social games, such as McDonalds pormotional crops in Farmville earlier this year. But just how much money is there to be made in social gaming, through purchasing products in-games? Well the fact that one teenager racked up £900 debt on his Mum’s credit card by buying products in Farmville shows that the number could be pretty big. In a great example of innovative fundraising – the charity water.org raised $13,000 through placing a special fish in Fishville (that actually exists). This shows that there is money to be made/raised by organisations outside of the game producers themselves. And with the average consumer spending around $72 dollars in social games, with a 41% likelihood for a repeat purchase, this is a valuable market to get in front of. Now the availability of social gaming as a viable commerce platform for many brands is still a long way off. Zynga have a big potential here to include advertisers or brands on a smaller basis than expensive in-game advertising, and instead enhance the experience through products that add to gameplay instead of detracting from it.
The popularity and long-term future of specialist location services such as Foursquare or Gowalla may be in question, but there’s no doubt that there’s huge money to be made in location targeted promotions, particularly through Facebook Deals. The ability to target your consumers with relevant products and information through the benefit of real-time advertising means that your ad dollars can now work even harder for you. And there is clear consumer demand for this. As much as people might be using location services for the networking and gaming aspect, clearly the allure of free or discounted stuff is significant. A report into mobile commerce found that over the Christmas period this year, 89% will use location-based services to aide with shopping, and a further 21% have redeemed coupons via mobile in 90 days. That last figure is particularly important as it shows the propensity for location-based shopping to turn from interest into a transaction.
This is obviously a significant trend in social commerce, being led by the likes of Groupon who are certainly doing a lot right. The beauty of group buying is that it’s also incredibly open to pretty much any sized business. There’s no technology or expensive development involved to be part of it, you simply go for the platform that’s right for you. The downside is that this is becoming quite a crowded marketplace, so the need for your offering to stay fresh and innovative is high. But it’s worth making social buying part of your marketing plan. The biggest thing to happen for companies using social media is when all those people utilise their communities to start spending money. The interest is there, it’s now down to the companies to build up trust, promote their offer and turn a one-off social buyer into a long term consumer
One of the biggest opportunities for brands is to experiment with flexible commerce, to be able to properly utilise the wealth of real-time information that’s available. Through clever use of social monitoring tools or closely monitoring the conversations of your communities, you can be more flexible with your products and offerings in a way that results in an increased likelihood to purchase. Say for example you’re monitoring trends through Twitter and you notice an increase in conversation around a particular band or artist. Change your homepage to feature their latest albums, notify your Facebook or Twitter fans and you’ve instantly made your products more relevant. This is just one one small example but it shows the potential of using the real-time information available to benefit both brands and consumers (providing you’re not spamming people!). This has longer-term implications for how your business model is structured and how receptive and flexible you make your business.