Why brands could own social commerce, not the big platforms
By Chantal Tode
March 28, 2014
Sephora's Beauty Board
While Twitter, Facebook and Pinterest are exploring ways to extend their reach into commerce, a growing number of big brands have their own social commerce programs, including Nike, QVC and Sephora.
Brand marketers recognize that the convergence of mobile and social has significant potential to support consumers’ online shopping needs. However, with the big social platforms lacking the level of trust needed for a strong online commerce strategy, there are a growing number of stand-alone, branded social commerce experiences.
“For the most part, customers lack the trust needed with social networks to transact within them, and while the trust with some retailers may be low due to recent data breaches, it is considerably higher than it is with social media sites where privacy and security are always top of mind with consumers,” said Dina Light-McNeely, vice president of strategy and solutions lead at RAPP, New York.
“Social commerce lets brands move beyond the number of followers, likes and shares to tap into the connections and underlying data of how people are engaging with their products and social content within a domain they control,” she said.
One reason why brands are interested in setting up their own social platforms is to have control over the customer experience around the brand and its products.
Additionally, brands want to be able to collect and own more customer-centric data for future engagement.
At the same time, the big social platforms are exploring their own commerce strategies as it is clear that the conversations are their sites are influencing sales for retailers and brands.
For example, last fall Twitter and Starbucks teamed up for a tweet-to-buy program that was integrated tightly with the coffee chain’s popular mobile loyalty program (see story).
However, with retailers looking to own the customer experience and consumers not trusting social platforms with their important financial data, there appears to be growing interest in stand-alone, branded social commerce plays.
Brands are making different levels of commitment to creating their own social commerce experiences, with some acting as their own social platform while others borrow heavily from existing platforms.
For example, QVC's ToGather, Target's Awesome Shop and Sephora's Beauty Board each borrow their visual product showcase from Pinterest, per Mr. Davis.
QVC’s ToGather network also pulls in social and preference data while also creating new channels to re-engage with the customer via email or social.
“When executed properly, brands can learn more about their customers in a non-invasive way to deliver a more relevant and personalized brand experience to each customer,” said Craig Davis, founder and CEO of Relevvant, San Francisco. “ToGather does a great job in customer onboarding and user experience which all lead to easily collecting data for deeper customer insight.
“Their strategies diverge from each other in onboarding and curation,” he said. “Awesome Shop has no real user registration and is essentially a filter that displays crowd-sourced curation of Target items from Pinterest. They may be missing out on the opportunity to collect valuable customer data.
“Beauty Board acts more like its own social platform where users upload their own photos and products can be bought with relative ease. With a better registration flow, it has the opportunity to collect more data for easier targeting.”
One of the best examples of brand building its own social platform is Nike +, which is a Fuelband wearable device for tracking physical activity, a smartphone app and a social community, all built around supporting consumers’ workout regimens.
While there may not be many brands willing to make as big a commitment to social as Nike has done, the payoff can be significant.
“Nike+ has done an amazing job building their own social platform that is built around the need states of their customers, and the entire customer experience is built around a lifestyle that is powered by Nike products,” said RAPP’s Ms. Light-McNeely.
“Nike+ gives brands the entire customer data story, especially because of the deep product integration,” she said.
“Whereas the Nike+ social commerce/community is a much greater financial and technical risk, the payoff is even greater because of the depth of the customer relationship with the brand.”
Whether brands decide to partner and leverage an existing social platform or to build their own branded offering, they need to be exploring social commerce because more since the decision to transact is being made in social channels.
While retailers are an obvious choice for powering social commerce, the strategy could make sense in other verticals such as hospitality and travel. Any business that has a social following and where community opinion is a factor in the purchase decision could benefit from this approach.
For example, Virgin America recently partnered with the Here on Biz mobile application to create an in-flight, geo-aware social network to connect business travelers (see story).
“I expect many more brands will follow suit,” Ms. Light-McNeely said. “Social commerce is the way that social media/ecommerce evolves to the next level.
“It’s not an ‘either or’ scenario on brand owned vs. big social sites,” she said. “It’s more of an ‘and.’
“The large social media platforms – Facebook, Pinterest, Instagram, Twitter – will still play a very important role in the total customer experience. I think that the brand-owned social commerce is more the next extension of ecommerce than it is a sign of the demise of large social networks.”
Chantal Tode is associate editor on Mobile Marketer, New York
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