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Social Commerce: From Hi to Buy

As social media usage habits become entrenched in our society, forward-looking technocrats and marketers are forging a path from community to commerce.

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Appeared In
Special Issue
Beauty Inc issue 05/11/2012

“It doesn’t make sense for these four elements to be segregated and we’re moving towards melding them,” says Fox, lauding The Fancy for its approach in doing so and explaining a unique feature that Mulu has pioneered. “Say you’re going to Coachella for the weekend,” she continues. “You can say, ‘Help! What’s your survival kit?’ And Coachella veterans can go on and put in their kit. The answer is then search engine–optimized, so you can go on Google anytime and see the answer.”


And — if Mulu and others social commerce sites have their way — buy whatever product catches your fancy instantly.


“Consumers crave shopping that is an edited assortment of great things,” agrees John Caplan, the ceo and founder of Open Sky. “Online shopping in an Amazon world is a search engine, where you have a search box and millions of products. That causes the paradox of choice. There is too much stuff to find the right thing to buy.”

 

Open Sky, which launched about a year ago, features different vertical boutiques in categories such as fashion, home and, as of May 2, beauty (overseen by former Sephora exec Alison Slater). Well-known people in each category are invited to curate their own boutiques with products that their followers can buy. Caplan says Open Sky has been growing at 40 percent month over month, and says its customers are 85 percent women, with 70 percent of buyers making a repeat purchase within 90 days of making their first purchase.


“What is happening is there is a wave of innovation in commerce, whether it’s subscription models or flash sales or sampling,” says Caplan. “There is a creativity to how consumers are going to discover a product and what really matters in those businesses is the loyalty they create. We see this customer who is really excited about what she is discovering and who she is discovering it from.”


While the past 12 months has seen the rise of a panoply of imaginative social commerce sites (see The Next Big Thing? at right for a broader picture), Facebook, with its 800 million active users, remains the apogee against which all others are measured. But as 8thBridge’s Wade Gerten admits, early attempts at selling on Facebook haven’t worked well. Yet.


“If you added up all of the shopping activity over the last two to three years on Facebook, almost all of it is friend-to-friend. Less than 10 percent is brands pushing at you,” says Gerten. “If you want social commerce to be a significant driver, it has to be re-shaped around people. Instead of taking a product catalog and putting it on a Web site or Facebook, people have to be at the center. Then it will become much more significant from a total revenue point of view.”


For the past year, the company has been developing a platform called Graphite, which Gerten says will allow brands to leverage social media without giving up brand control. Rather than use Facebook’s blue “Like” button, the Graphite platform will enable brands to customize their buttons. So the online clothing store Nasty Gal might have “Neeed” or “Gimme” while Hallmark’s buttons says “Tearing Up” or “Love.”


Additionally, users will be able to click on a “shoppable story,” which enables them to browse on the item they like without leaving Facebook. Those ready to buy are taken back to the brand’s Web site.


“We think to get scale requires an integrated approach with your existing channels,” says Gerten. “If people drive social commerce by ‘sharing’ what they like, the trick to getting more people to share is to integrate more customized sharing functionality on your existing Web site.”


One of the first beauty companies to experiment with myriad forms of social media and commerce, Avon has learned this firsthand. “If you put the entire store into a Facebook application, it is overwhelming for representatives to curate and overwhelming for consumers, who aren’t necessarily in the mind-set at this point of, ‘I’m going to Facebook to shop,’” says Van Vahle, Avon’s executive director of digital content, community and social media. “They are going to Facebook to learn, discover, share and converse. So we took the boutique and shrank it. We thought of it more as an engagement device, so that people can see the newness in the context of a beauty expert who is a friend of hers.”

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