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Social Commerce

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  1. Social Commerce Social Network Study 2011 SNU IDB

  2. Outline • Social Commerce • Social Commerce Sites • Groupon • LivingSocial • Etsy • Ticket Monster • Coupang • One a day

  3. Introduction • Social commerce • A subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services Social Commerce e-Commerce Social Media

  4. Introduction • “Social commerce” • Introduced by Yahoo! In Nov 2005 • Describe a set of online collaborative shopping tools • Shared pick lists, user ratings, and other user-generated content-sharing of online product information and advice • What is new? • Range of social commerce tools and opportunities are expanded •  link social media platforms to e-commerce platforms

  5. Introduction • Two central activities • 1. putting water-coolers next to tills • Helping people connect where they buyby adding and linking social media tools and content to e-commerce sites • E.g., Amazon – rate and review products • 2. putting cash tills next to water-coolers • Helping people buy where they connect by embedding social media stores and storefronts to popular social media platforms • E.g., Best buy’s storefront in Facebook

  6. Concept Social Commerce Service Provider Use the services Local Service Provider Customer Register services buy services Give back the profits exclude a commission Pay the price - Promote products easily - Bargain price - Target: Late teens ~ mid thirties single women

  7. Why Social Commerce? • Business perspective • Social media marketing monetization • Helps marketers monetize and measure campaigns • e-Commerce sales optimization • Improve conversion rates and increase average order value for online retailers • Business model innovation • Creating new revenue streams by curating and extracting value from social media content

  8. Why Social Commerce? • User perspective • Trust • Because social media content increases ‘source credibility’ of sales and marketing messages, making them more believable, persuasive and trustworthy to the user • Utility • By putting the social commerce tools at the disposition of customers, brand, businesses and retailers can enhance the online customer experience • Fun • In contrast early e-commerce was a solitary experience, people interacting with software • Social commerce helps make commerce social again • Social commerce can enhance the customer journey, from initial ‘need recognition’ and ‘product discovery’, through ‘product selection’ and ‘product referral’

  9. Types • 1. Social Link

  10. Types • 2. Social Web

  11. Types • 3. Group purchase

  12. Types • 4. Coupled with offline

  13. Types • 4. Coupled with offline

  14. Six Dimensions of Social Commerce • Dimension 1: Social Shopping • Allows people to share the act of online shopping together (synchronous shopping) • Adds emotion into the e-commerce mix • Enables real-time recommendations • Includes … • Group buying • Co-browsing • Group gifting • Ask-your-network • Social network storefronts • Social shopping portals

  15. Six Dimensions of Social Commerce • Dimension 2: Rating & Reviews • Provide independent third-party evaluation of a product or service review, with an opportunity for viewers to contribute and discuss • What’s new? • Review syndication, contrast review (pos/neg), tagged reviews, vidiorevies, geo-tagged mobile reviews, … • Includes… • Customer ratings & reviews • Expert ratings & reviews • Sponsored reviews • Customer testimonials

  16. Six Dimensions of Social Commerce • Dimension 3: Recommendations & Referrals • Promotes personal recommendations and referrals within online social circles, often rewarding referrers for their efforts • Sometimes integrated in social shopping portals • Can use syndication tool via Twitter and Facebook to share recommendations with friends, fans, and followers • Includes… • Share with your network • Referral programs • Social recommendations

  17. Six Dimensions of Social Commerce • Dimension 4: Forums & Communities • Connect people with each other and to a business in a moderated and curated environment • Includes… • User forums • User galleries • Idea boards • Q&A forums • Brand communities

  18. Six Dimensions of Social Commerce • Dimensions 5: SMO (Social Media Optimization) • Promoting and publicizing websites and website content through social media • Includes… • News feeds • Media sharing • Social media events • Link building

  19. Six Dimensions of Social Commerce • Dimension 6: Social Ads & Apps • Branded content in social media in the form of paid advertisements or social applications • Social apps outperform social ads because they also use reciprocity

  20. Future Trend • Social CRM • Mobile Social Commerce • Curated Social Marketplace

  21. References • Wikipedia - Social Commerce • Social Commerce: Monetizing Social Media, Paul Marsden, Syzygy Group, 2010 • The Era of Social Commerce, http://aboutsocialmedia.blogspot.com/2010/08/era-of-social-commerce.html • 소셜커머스의4가지 유형,http://www.bloter.net/archives/31355 • The 6 Dimensions of Social Commerce: Rated and Reviewed, http://socialcommercetoday.com/the-6-dimensions-of-social-commerce-rated-and-reviewed/

  22. Social Commerce Sites

  23. Groupon

  24. Groupon? • A social commerce site launched in 2008 • Known for the first social commerce • Group + Coupon = Groupon

  25. Introduction to Groupon

  26. Introduction to Groupon (cont.)

  27. Explosive growth of Groupon • Serves in about 40 countries and has amassed 35 million registered users

  28. Acquisition & Re-brand • Acquired several international operations similar to Groupon • Re-branded under the Groupon name after acquisition

  29. History I’m Andrew Mason.

  30. History (cont.)

  31. History (cont.)

  32. Feature list • Featured Deal (deal of the day) • MegaGift It’s Very Simple!!

  33. Business model Brokerage fees (Groupon & retailer would split) Limited time, The minimum personnel, More than half discount Providing buyer characteristics, Statistical information Social media Word of mouth effects Cheap prices Impulsive, Fun consumption Ad, PR effects

  34. Business ModelApplication based on Groupon • “Chocolate” is an example of applicatioin • SK Telecom + Groupon = Chocolate • Similar to Groupon, but for SKT members only

  35. Success Factors Region-based commerce platform • Deals with offline goods/services based on local region • Brings marketing effects • Commercializes offline services into online servicescf) yelp.com

  36. Success Factors Thoroughly simple & intuitive interface • Checking Feature Deal and clicking for buying is all • Reduces the load about decision of mass goods

  37. Success Factors Social media marketing • Win-Win strategy by sharing Feature Deal (buzz marketing) • Incentive System

  38. References • Wikipedia “Groupon” • 네이버 백과사전 “소셜커머스” • Groupon (Korea) • 그루폰, e비즈북스, 근간예정

  39. LivingSocial

  40. LivingSocial

  41. History

  42. Feature List • Today’s Deals • Instant Deals • Past Deals • More Cities • Escapes • Families

  43. Business Model • LivingSocial offers a new deal each day • LivingSocial sends email to its members who subscribe via email • Members have a chance to save 50-90%

  44. Business Model • The original purchasing member obtains a free offer if he recommends three persons to purchase

  45. Business Model • LivingSocialprovides a surge of new customers for menchants • LivingSocial takes a cut of the deal revenue • LivingSocial helps the local consumers figure out where to spend their money

  46. Acquisition • InfoEther • In March 2011,LivingSocial acquired InfoEther • InfoEther is one of the leading technology • Let’s Bonus • In January 2011,LivingSocial acquired a majority stake • Let’s Bonus is a social shopping site launched in Spain, Italy, Portugal, Argentina and Mexico

  47. Acquisition(cont.) • Jump On it • In November 2010,LivingSocial bought $5 million controlling stake in Australian social shopping site Jump On It • Urban Escapes • In October 2010, LivingSocial announced acquisition of social adventure company Urban Escapes • Urban Escapes led to the launch of LivingSocial Escape and LivingSocial Adventures

  48. Comparisons-SimilaritiesLivingSocial VS Groupon • Similarities between LivingSocial and Groupon • Both Living Social and Groupon are coupon based company. • Both Living Social and Groupon are busy expanding to new cities. • Both Living Social and Groupon making good use of social features.

  49. Comparisons-Similarities(cont.)LivingSocial VS Groupon • Similarities between LivingSocial and Groupon • Both Living Social and Groupon making good use of social features. • Both Living Social and Groupon’s websites use Facebook Connect to help people find deals according to the geography, then share these deals on Facebook or other social media.

  50. Comparisons-DifferencesLivingSocial VS Groupon • Differences between LivingSocial and Groupon • Groupon has 40 million subscriber in 35 countries and 335 cities VS Living Social has 26 million members in 5 countries and 89 cities. • Groupon is the pioneer VS Living is a clone • Groupon is earning 3 times more than Living Social is making