The Top 5 Social Commerce Disruptors in 2012

  

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2011 was a big year for ecommerce and 2012 promises to be even bigger as social commerce continues to emerge as a key source of traffic and sales for online retailers. Here are the top five trends in social commerce that I predict will have the most impact in the coming year:

Going beyond the "like": To gain greater value from the Facebook social graph, e-commerce sites will begin to allow visitors to do more than just "like" a product. At the most recent f8 Developer Conference, Facebook announced its plans to enable more types of user actions to be shared, such as "read," "watched" and "listened." In 2012, e-commerce sites will begin to define their own social actions, allowing consumers to indicate what they've bought or reviewed, or even indicate what items they are shopping for. Given that 50% of visitors to e-commerce sites are logged into Facebook while shopping, these types of social features will prove to be popular with consumers in 2012.

Platforms open wide: One of the biggest inhibitors to integrating social into the e-commerce experience over the past two years has been the technical challenge. Vocal demand from retailers has driven most of the major e-commerce platform providers to adapt, making their platforms much easier to integrate with third party services. eBay's X.commerce announcement is the most visible example of this trend, but every major e-commerce platform has made social integration a big part of its roadmap in 2012.

More deals, every day: 2011 was the year of the local daily deal, led by Groupon and Living Social, amongst others. The daily deal phenomenon proved that consumers don't want to miss out on a phenomenal deal, even if they had little-to-no purchase intent for the item or service being offered. Online retailers were quick to realize that the Groupon model could be applied to their own websites, and I predict that this trend will only accelerate in 2012. The daily deal will become a mainstay of the e-commerce environment for years to come.

Celebrity-driven marketing: Our celebrity-driven culture extended into online retailing in a big way in 2011, and we'll be seeing plenty more in 2012. After several years of building Facebook fans and Twitter followers, social media-savvy celebrities became a key asset to the marketing strategies for many online brands. The success of ShoeDazzle, which rode Kim Kardashian's popularity, set an example for the industry. In 2012, we'll see more sites use celebrity muscle to push traffic to retail sites — like Fab.com, which got Demi Moore to tweet about some of its early sales, and BeachMint, which co-presents products from Kate Bosworth, the Olsen sisters and Jessica Simpson.

Shopping less but spending more: Shoppers with more cash than time will be courted by sites that offer personalized shopping services, digging up only the deals and the products that the shopper will jump on. Services like Shop It To Me act as virtual personal shoppers, saving their members the hassle of scouring sites for deals. Services that rent products, like Rent The Runway, will unlock new ways of consuming products. New forms of shopping with social twists will continue to spread in popularity fueled by strong word of mouth via social networks.

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Empowered Consumers. Disruptive Competitors.

  

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There are a few times in your professional life you believe you’ve witnessed the future…  through a pivotal presentation or a critical book that changed your outlook.  For me those books were “The World is Flat” by Thomas Friedman and “The Facebook Era” by Clara Shih.  Last week at the Forrester Consumer Forum, that presentation for me was The Disruptor’s Handbook: How To Reinvent Your Products Before Someone Else Does by Dr. James McQuivey, where I experienced a new level of insight, inspiration and inevitability about the future of commerce.  You can get a sense for the tenets of his predictions from his blog post – Meet the Digital Disruptors.

The two key elements of McQuivey’s vision that left an indelible impression on my mind are Empowered Consumers and Digital Disruptors.

1.  At the center of McQuivey’s vision is Empowered Consumers – today’s consumers who are connected to a wide network of friends and who access the opinions their friends and like-minded consumers before they make a purchase.  McQuivey suggests that this empowerment of the individual consumer and the power of the connected human network effectively obsoletes all previous sources of competitive advantage.

2. Digital Disruptors are driving the shift from people merely “adopting” a new technology to actually “internalizing” it.  Moving from “doing old things in new ways” (adopting technology) to “inventing new things to do” (internalizing technology). McQuivey suggests that disruptors are both technologies, platforms employing them, consumers who use them and consumers who turn into competitors by internalizing them and inventing new products or companies.  Barriers to entry are falling everywhere, and disruptors are fully empowered, right along with consumers.

Since witnessing McQuivey’s keynote I have reflected back on recent examples that substantiate the existence of the empowered consumer and the “social revolution”.

• The “Occupy” movement of empowered, disenfranchised citizens fed up with financial  institutions and markets
• Bank of America’s reversal of the $5 monthly debit card charge
• Netflix’ dramatic loss of customers from their  recent price hike

There is no CMO (or Chief Product Officer) who has escaped the social revolution in commerce.   Many CMOs are seeking to “engage” their customers and “activate” their advocates, but are utilizing old-school B2C techniques with new world communities (e.g. running contests and messaging to fans on Facebook pages), which inherently miss the fundamental need of the Empowered Consumer – to hear “the truth” directly from their peers.  And in the process, sales generated from these efforts have been disappointing, with very low conversion rates on traffic from these social media marketing efforts.

Consumer empowerment, together with disruptive competition, create an urgency for brands and retailers to “disrupt themselves” before they get disrupted by others, a key tenet of McQuivey’s prediction.  Here’s what he says you need to do.  Soon.

1. Harness the power of digital disruptors: Invent the new applications enabled by disruptive technologies, such as new hardware platforms like the 40 million iPads worldwide, or social networking platforms like Facebook Connect and the new Google Plus API.
2. Develop new products or experiences “adjacent” to you: Develop the most wanted capabilities or experiences that you are well positioned to deliver immediately.
3. Create total product experiences: Dig deep into the consumer’s core needs and deliver the full set of benefits the consumer is seeking, be they products, services or new ways to shop.
4. Get ready to measure early and often.
5. Partner to enable fast action.
6. Then Act!

Net-net – Act – Measure – Improve.  And keep iterating!  Be willing to accept early failures – as long as you have an iterative process in place and a top-down mandate to experiment and innovate.  This is the new formula for how commerce can scale with the realities of today’s increasingly social consumer and web.

Dr. McQuivey offers a starting point for you – a Digital Readiness Test – forr.com/digitalreadiness.  Go!

(And if you’re interested using a “test-and-learn” approach to harnessing social on your ecommerce site, I invite you to learn about our ROI-Guided Social Design solution.)