On the heels of Altimeter’s Rise of Social Commerce Event, Lora Cecere, Jeremiah Owyang and gang have published their synthesis of where social commerce is now, and where it is going. They introduce the new digital consumer where: “Trust in big brands is low. Consumers want confidence in what they buy from friends, and insight from their community.” While their interviews and quantitative research with social pioneers: manufacturers, retailers, consultants and technology providers (including Gigya) in the retail space surfaced a wide ranging list of goals and definitions, the team has summarized the path forward in four key stages, illustrated in the following graphic:
The research also found that different sub-segments are at different stages, and progressing at different rates.
Back in April of 2009 I spoke with Jeremiah for his Forrester report on The Future of the Social Web, and suggested that with the advent of social technologies, the feedback loop between consumers and product manufacturers would become nearly instantaneous. As it turns out this “Store of the Community” has become one of the key themes both of this report and for many innovative retailers. Fashion retailer Modcloth has accomplished this by design, controlling manufacturing and crowd-sourcing the choice of products they sell. High-end outdoor retailer Giantnerd has a more informal approach, channeling community comments and reviews to manufacturers in time for them to make changes to subsequent product runs. In both cases, the role of customers has moved way beyond simply sharing information with other customers about what’s good, or informing retailers what to carry, to affecting the supply chain itself.
In the fourth stage, Frictionless Commerce, Altimeter sees changes to retailing becoming more revolutionary than evolutionary. They predict the convergence of commerce, mobile and social will “catalyze a complete redesign of the shopping experience.” Basic practices at this converged stage include connecting like-minded shoppers, adding game mechanics to loyalty programs, and adding mobile checkout. Giantnerd’s loyalty program incorporates the first two of these practices. Shoppers are rewarded not just for purchases made, but also for participating in the community. Rewards consist not just of dollars to spend on product, but site status, moving members from the entry level Nanonerd all the way to Giantnerd.
Whatever the future holds, it will certainly be more customer-centric. As Giantnerd says “Giantnerd isn’t like other shopping sites. In fact, Giantnerd has almost nothing to do with us. Rather, everything here is a product of you—the community—from products you see on the site, all the way down to our company policy. Giantnerd is a social platform totally dependent on your presence; your opinions; your wants and needs.” This customer centric approach will certainly be great for consumers, but it also means greater efficiencies and intelligence for manufacturers and retailers that improve the bottom line.
By Kevin White