PowerReviews and Forrester Research Present on Social Commerce in New York City on July 28, 2011

with special guest

Social Commerce Trends and More………

Click to edit Master title styleToday’s Agenda

2

Introductions & Announcement

Forrester POV – Sucharita Mulpuru

PowerReviews POV - Cathy Halligan

What’s Next on Facebook – Nadim Hossain

Q&A

Join us on Twitter: #NYCSocial

@NadimAHossain@Smulpuru@CathyHalligan

Click to edit Master title styleIntroducing the World’s First Open Social

Commerce Network

3

NEW

Now ANY brand can syndicate conversations across our network

It’s a simple law of e-commerce: the more consumer reviews there are on a product, the

more sales will result.

“ ”

TechCrunch, July 26, 2011

© 2009 Forrester Research, Inc. Reproduction Prohibited

The State of Social Commerce

Sucharita Mulpuru, VP and Principal Analyst

July 28, 2011

Social commerce isn’t what it

seems

© 2011 Forrester Research, Inc. Reproduction Prohibited7

Myths and facts about social commerce

A broader social commerce framework

What about Facebook?

Agenda


The expectations around social are not small


Low costs are also tempting


―Social‖ requires small spend (if it requires anything at all)

Source: The State of Retailing Online 2011, a Shop.org study conducted by Forrester Research


But ―social‖ is still largely experimental



Sales are not the biggest metric for success


Not surprising, even the most generous attribution modeling doesn’t gain much from social

1 23





Agenda


Stepping back, ―social‖ means many things


The 8 ―top ranked‖ social tactics

1. Ratings and reviews

2. Microblogs

3. Social recommendations

4. Company blogs

5. Customer generated outfitting

6. Product sharing on social network sites

7. Social shopping aggregator sites

8. Open APIs


1. Ratings and reviews

Already used by

most retailers

Opportunity to

reduce content

creation costs

Benefits to product

development, returns

and sell-through


Seven Key Elements Of Customer Reviews

Verify buyers where possible


2. Microblogs

Inexpensive to launch

Opportunity to quickly dispose of excess

inventory

Customer service benefits


This also puts a face to a brand


3. Social recommendations

Opportunity to leverage

―wisdom of the crowds‖

Exposes customers to

content deeper in the site

Increases time and site

and upsell opportunity


4. Company blogs

Provides some opportunity

with SEO

Not a huge traffic or sales

driver but relatively low cost


5. Customer generated outfitting

Coutourious.com Assists in

merchandising support

and cross-sells

Engages shoppers in

tactile purchases


6. Product sharing on social network sites

Much more effective than

company social network pages

Opportunities to use your

customers to evangelize your

brand

Best with relevant sharing (e.g.

local events, sales vs item level

communication)

10%+ of traffic and revenue comes

from social network sources, mainly

Facebook and Twitter


7. Social shopping aggregator sites

Opportunity to drive

incremental traffic

Often more engaged and

relevant shoppers than

traditional CSEs

Conversion is moderate

because shoppers are

usually earlier in the

purchase funnel


8. Open APIs

Opportunity to crowdsource technology

Great for ―shovel ready projects‖





Agenda


Facebook in particular struggles with being useful in commerce

Source: North American Technographics® Retail Online Benchmark Recontact Survey, Q2 2010 (US)



Yet retailers are not heeding the obvious

Current usage and effectiveness of social media tactics


Percent

Ranking as

very effective

Base: 68 online retailers


Even Facebook tacitly acknowledges this

―When new technologies arrive, it

takes awhile [for them] to be

embraced…when television was a

new medium, advertisers had a hard

time figuring out how to use it…the

first ads looked like radio ads in front

of a video camera…‖

Dan Rose, VP Partnerships and

Platform Marketing


Why the disconnect? Developers are leading the vision

for commerce…

…and Facebook just doesn’t have

time to sell a better vision

―We think one of the best ways to stay small is just to stay

smaller.‖

COO Sheryl Sandberg on Facebook’s ~3,000 employees


But there’s actually a really interesting vision

―We have this concept of serendipity.—humans do. A

lucky coincidence. It’s like you go to a restaurant and

you bump into a friend that you haven’t seen for a while.

That’s awesome. That’s serendipitous. And a lot of the

reason why that seems so magical is because it doesn’t

happen often. Bit I think the reality is that those

circumstances aren’t actually rare. It’s just that we

probably miss like 99% of it. How much of the time do

you think you’re actually at the same restaurant as that

person but you’re at opposite sides so you don’t see

them, or you missed each other by 10 minutes, or they’re

in the next restaurant over? When you have this kind

of context of what’s going on, it’s just going to make

people’s lives richer, because instead of missing

99% of them, maybe now you’ll start seeing a lot

more of them.”

Mark Zuckerberg, to Time magazine


Here’s the execution


Personalization itself isn’t all that lucrative

Source: November 2010 “What You Need To Know About Third-Party Recommendation Engines”


But this fuels Facebook’s display advertising model (and why ―likes‖ could be so important)

BILLIONS in spite of

currently abominable CTRs!


And for retailers this could solve the multichannel measurement conundrum

+


Think of Facebook this way…

Data layer

extraction

Off-

Facebook

On-

Facebook

Greater value to

large retailers Illustration Description

F-commerce initiatives such as stores, fan

pages, peer to peer contacts ―within the

four walls‖ of Facebook

Example retailers: JCPenney, 1-800

Flowers

Extraction of Facebook’s open graph data

onto key selling pages, ―likes‖ on product

detail pages

Example retailers: Levi’s, Jansport, Wet

Seal

Using Facebook data to extract trends,

identify influencers, monitor competition,

glean customer insights

Example retailers: Zappos

Dire

ct sa

les

―To

p a

nd

bo

tto

m o

f th

e fu

nn

el‖

Ind

ire

ct sa

les


And just to reinforce the role of ―likes‖

“Please indicate which statements below you agree with regarding

Facebook as a substitute for email:”

(please choose all that you agree with)



As for Facebook Credits, they’re unlikely to extend beyond Facebook

30% commission

Locked with FB now

No one transacts on FB for

physical goods

Significant low-hanging fruit for

FB with games

Initiatives are develop-led, not FB

led (e.g. Dark Knight)


Social is many things, but not a silver bullet

© 2009 Forrester Research, Inc. Reproduction Prohibited

Thank you

Sucharita Mulpuru

[email protected]

www.forrester.com

Twitter: @smulpuru

Click to edit Master title styleAgenda

44

The case for Social Commerce exists

Social is a Net New source of growth

Google AND Facebook AND……..

Click to edit Master title style

45


46

A range of social tools in the tool box . . .


47

. . . deployed to drive the intended performance

Increase brand reputation and marketing awareness & engagement through innovative

social marketing and engagement

Social

Brand & Marketing

Social

Commerce

Social

Insights

Social

Support

Ob

jec

tiv

e

Drive sales through

customer conversation, joint buying, or game dynamics

Understand and interpret the collective voice to drive brand, merchandising, and product

development decisions

Reduce costs by letting customers assist other in answering support questions

Exists

Bu

sin

ess

Ca

se Emerging EmergingExists

Me

tric

Brand Strength &

Stature

Awareness

Customer

Acquisition

Traffic

Conversion

Cross Sell/Up Sell

Average Order

Actionable

Product level

insights

Actionable Brand

level insights

Customer

Satisfaction

Cost to Serve


48

Social programming drives to a

range of outcomes

Brand Marketing Commerce Service

Oth

er

Ne

two

rks

(via

de

skto

p o

r m

ob

ile

)

On

-site

(via

de

sk t

op

or

mo

bile

)


• Social content

(reviews, Q&A)on

your site increases

SEO performance

25-49% if your

content is indexed

by Google directly

on your product

page

• Content distributed

on the social web

increases referral

traffic, clicks back

to your product

page

• Social

content on

your product

page

increases

conversion

15-85%

based on the

star rating

and

substance of

social

content

49

The core case for Social Commerce DOES exist

Sales =Traffic * Conversion * Average Order

• Social content

increases

average order

value 20-50%,

giving

consumers

objective

information from

people like them

to increase

confidence to

‘add to cart’


• The UGC quantity you have on your product pages? (e.g. customer reviews, Q&A)

• The % of transactions that have UGC?

– A baseline is 2% of transactions

– Best practice is 5%+ of transactions

• Your UGC SKU coverage?

– Best practice is 50%+ of your core catalog and 40% of your full catalog

• The UGC quantity shared on the social web? And, the referral traffic and resulting conversion?

– The value of a review shared to facebook is $15.72 (with a $132 AOV)

• Your SEO traffic to your product page?

50

Do you know?

If you don’t know and aren’t managing these metrics,

you risk social commerce results


51

UGC Quantity & Coverage is core to

Social Commerce

PowerReviews’ Clients

6%

38%

74%

49%

88%

Toys Office Apparel Sporting

Goods

Health &

Beauty

46%

10%

16%

29%

Multi Billion $, Multi Channel Retailers

Internet Retailer Top 100

Customer Reviews Coverage,

% of total SKUs


52

Increase product coverage lifts conversion,

resulting in a meaningful sales increase

Site Visits 100,000,000 Product Page

Visits 55,000,000 55%

Checkouts 5,500,000 10%Checkouts Completed

(orders) 3,025,000 55%

SKUs 75,000 Coverage 10%

SKUs w/o a Review (product pages) 67,500

25% increase in coverage 16,875

Total Product Page Traffic 55,000,000 Traffic to pages w/o a review 25%

Traffic to pages w/o a review 13,750,000

Traffic to pages that achieved a 25% increase in coverage 3,437,500

Conversion Lift to Checkouts - 20% increase with 1-2 reviews (assuming 4.2 star aggregate rating) 2%

Incremental Checkouts 68,750

% who complete checkout 55%

Completed Checkouts 37,813

AOV $ 132.00

Online Sales Increase -doesn’t include impact to Store Sales $ 4,991,250


53

UGC is core in Social Search

Google values keyword-rich, publicly available user-generated content:

• Wiki Entries• Customer Reviews• Q&A• Discussion Forums• Twitter and other real-time content

Semi-public UGC valued by Google:• Facebook• LinkedIn• YouTube• Flickr

To the PRODUCT Page


54

Google is more ‘Social’ than meets the eye

To the PRODUT Page

2008


55

Google is more ‘Social’ than meets the eye

To the PRODUT Page

January 2010

Innovations but no Social


56

Review Quantity and Coverage matter. UGC

is a key driver of Google presence

To the PRODUT Page

UGC Quantity and Coverage key to Google presence

Today UGC fully

integrated into

Google search &

shopping


57

Review Quantity and Coverage matter. UGC

is a key driver of Google presence

To the PRODUT Page


58

Review Quantity and Coverage matter more

than ever

To the PRODUT Page


59

Social SEO improvement to the product page

increases sales

To the PRODUT Page

Case studies show 25%-40% increase in SEO with PowerReviews vs. an’ I frame implementation

Site 20% improvement 10% improvement

Site Visits 100,000,000

% visits to product page 55%

Product Page Visits 55,000,000

% from SEO 25%

SEO resulting product page visits 13,750,000 16,500,000 15,125,000

% continue to Checkout 10% 10% 10%

Checkouts 1,375,000 1,650,000 1,512,500

% who complete checkout 55% 55% 55%

Checkouts Completed (orders) 756,250 907,500 831,875

AOV $ 140.00 $ 140.00 $ 140.00

Online Sales from SEO $ 105,875,000 $ 127,050,000 $ 116,462,500

Online Sales from improved SEO – does not include impact to store sales $ 21,175,000 $ 10,587,500

PowerReviews was issued a patent relating to the method in which we deliver user-generated content, enabling our SEO solution. Key word rich UGC is indexed DIRECTLY on the product page by Google, Bing

& Yahoo! Work arounds are no substitute for your UGC being indexed directly on your product page


60

Previously, sharing with Facebook was a one-

way conversation

To the PRODUT Page


61

To the PRODUT Page

Today retailers and brands are integrating

Facebook into their on-site experience

Facebook profile in the

review


62

UGC distribution is core to Social Commerce

To the PRODUT Page

http://powerreviews.com/facebook-calculator.php


63

Social Commerce Best Practice TipsTo the PRODUT Page


64

Maximize User Generated Content

Product Reviews

• Post-Purchase Follow-up Email

– Send to online and in-store customers

– Send 2nd follow-up email

– Test promotions promotion

64

Tip #1

• Supplement with reviews from brands

AnswerBox

• Add product questions & answers


65

Optimize Search Traffic On Site… Tip #2

PowerReviews Solution:

JS In-Line

Alternative Solutions:

iFrame

Amazon Solution


66

…and in Google Products Tip #2


67

Engage in a two-way conversation with

Facebook..Tip #3


68

Review posted on Facebook =

$15.72 in SalesTip #3


69

Leverage UGC online and offlineTip #4

Comfortable, walking

shoes with 4+ stars


70

Listen to your customersTip #5


71


72

Social is a net new source of traffic

To the PRODUT Page

comScore and J.P. Morgan (January 2011).


Will Facebook be the next Google?

73

To the PRODUT Page

Click to edit Master title styleFacebook and Google are complementary

74

To the PRODUT Page


75

The Catalyst

To the PRODUT Page

Introduction of the Like Button (anniversaried on 4/21)

• More than 2.5 million websites have

integrated the like button

• 10,000 new websites integrate with

Facebook Like each day

• Every month, more than 250 million

people engage with Facebook on

external websites


76

The Driver

To the PRODUT Page


77

What consumers tell us

To the PRODUT Page

1 Source: 2010 Social Shopping Study, the e-tailing group/PowerReviews


78

Endorsements from Facebook Friends

drive sales

To the PRODUT Page


79

5X Increase in sharing with Facebook Connect

To the PRODUT Page


80

Evolution of Facebook Integration

To the PRODUT Page

Op

en

2

-wa

y

1-w

ay

On Facebook

On Facebook & lightly on-site

(Like/share count)

On Facebook & Facebook-

powered on-site profiles

Personalized commerce experience

(Facebook + native data)

You

are(likely)

here


81

Multi-directional Like Integration


82

Facebook-powered Profiles/Community


83

Facebook-powered Personalization


84

Integrate Facebook Connect now in a

meaningful way


85


86

Thank you.

@PowerReviews

@CathyHalligan@Smulpuru

@NadimAHossain

To learn more about the PowerReviews social commerce suite, please contact:

[email protected]

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PowerReviews and Forrester Research Present on Social Commerce in New York City on July 28, 2011

Technology