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08 October 2007

Social retailing goes beyond the media.



As both MySpace and Facebook begin to battle it out for the social media ascendancy, it’s becoming increasingly apparent that for retailers and advertisers (check brand owners) will soon to need to invest in this space to see how they integrate their ecommerce efforts with the customer intimacy social media promises. And this goes way beyond the current brand advertising or brand advocacy.

Social retailing, a term coined earlier this year by US technology consulting firm IconNicholson, combines mobile communication, online networking sites like Facebook with traditional off and online merchandising and it’s coming to a store near you.

In this increasingly brave new world a typical scenario could see us and our friends are constantly online and ready to advise whether those pants really do make our bums look big. And if we do actually venture into a store, RFID tags on items will enable in-store personalized commentary to be displayed about the products we are looking at. Checkout lines nonexistent because we are there either for a pickup, self checkout or even to buy items with our cellphones whilst browsing the store. If we’re signed up to the our local malls, retailers will already know our interests and text-message or bluetooth us personalized coupons and offers as we walk through their doors.

It is a view that has the backing of global technology research firm Gartner, identifying two new groups of emerging online shoppers, what it calls the "solo hunter" and the "social gatherer" in its report Social Shopping Will Shape the Future of E-Commerce released in May this year.

"Online vendors of goods and services that ignore the social dimension, as exemplified by the 'social gatherer' archetype, are ignoring a potentially large revenue component," said Ray Valdes, author of the report.

"These vendors are, in a substantial sense, 'leaving money on the table'.

"Social shoppers seek not just artifacts or information for future use but also an enhanced emotional connection to other participants in the shopping experience.

"Despite a seeming lack of preoccupation with purchasing a particular item," the report continued, "it is possible that the total transaction amount in a social-shopping journey will exceed that of a solo foray; therefore, e-commerce vendors that ignore this dimension are leaving money on the table."

The Gartner report concluded that immersive virtual environments like Second Life and social networking sites like Facebook and MySpace have both an advantage and DIFFUSION notes the opportunity in “supporting peer-to-peer interaction across multiple vendor locations and in enabling spontaneous human social engagement at varying levels of intimacy, allowing collaborative purchases to occur,"

But as we noted in (see DIFFUSIONblog Minority Vision 18 March 2005) some aspects of social retailing are being hampered by the limits of the current technology. As Valdes notes "The limitations of technology on the Web today allow only indirect support for social shopping," he maintained. "The technology platform needs to evolve for more direct support in a more integrated manner."

And this is the immediate opportunity for a whole group of stakeholders including media owners, retailers and advertisers (check brand owners) to start to develop real social communities of interest beyond the solo hunter. Australian companies like Westfield, the world’s largest mall owner, could combine with a social networking site like Facebook or social shopping site Kaboodle to develop a social retailing property for it’s own global portfolio.

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