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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Special Issue
Beauty Inc issue 05/11/2012

For Bobbi Brown, a brand that has primarily relied on word of mouth rather than traditional advertising, its forays into F-commerce have been all about engagement rather than sales. Recently, it created a Facebook program called Bobbi Brings Back, where consumers in six markets (the U.S., U.K., Australia, Japan, Germany and Korea) could vote on which discontinued lipstick shade they wanted the brand to bring back. More than 40,000 votes were tallied, and the winning shade will be sold only via Facebook in October. “The point is not the revenue,” says Maureen Case, president of specialty brands at the Estée Lauder Cos. Inc. “The point is to engage with our consumers and show them how much we appreciate them and that we are listening. A brand might have millions of Facebook fans, but whether they’re engaged is a different story.

“It’s not about throwing seeds into the wind,” Case continues. “It’s making sure they find places to land and begin to grow.”

Louis Desazars, ceo of Nars, is getting increasingly aggressive at making sure that the edgy makeup brand is courting its most ardent fans online. “At yearend, we will have one million fans,” he says. “These people are passionate about the brand and there is definitely something that we can be doing in order to get more business out of this — but in a smart way. You can’t just put regular items up on Facebook,” he continues. “They are expecting something that they can’t find anywhere else. If you invite them to the party, you have to feed them something unique.”

Unique doesn’t mean expensive, adds Heather Park, Nars’ director of digital, noting $30 constitutes the current price ceiling for now. “There is a misperception that when people say 850 million people on Facebook they see 850 million shoppers,” Park says. “But for most people, it’s a big leap of faith to buy anything more expensive than that.”

Oscar de la Renta may reside in the pantheon of American luxury designers — with price points to match — but the brand has been among the earliest adopters when it comes to social media and commerce. “The word experiment is important,” says Alexander Bolen, chief executive officer of the fashion house. “There are a lot of first-mover advantages in this world. If they’re well thought through, the experiments don’t have a tremendous amount of downside, as long as you’re not afraid to be associated with something that doesn’t work. As a cost matter or regarding brand image, there isn’t a tremendous cost.”

Oscar de la Renta has experimented with selling bangle bracelets and notebooks as Facebook exclusives, and also ran a fragrance sampling program. As with Bobbi Brown and Nars, price and exclusivity were the key purchasing drivers. “For us, we want to talk to new and younger consumers,” says Bolen. “This is the way people are communicating today and we need to be communicating with potential customers in whatever way they want to communicate with us. It is just as much about communicating and engaging as it is about a commerce opportunity.”

In fact, the very ubiquity of Facebook and the changes it has wrought in how people communicate and transmit information to others has prompted brands to take a much broader view of social media in general, and commerce in particular. “We are defining social commerce as the socialization of the digital commerce experience,” says Marisa Thalberg, vice president of corporate digital marketing for the Estée Lauder Cos. “Our philosophy is not to replicate our commerce on our social channels. It’s more about understanding how people behave through digital and travel through the ecosystem.

“There isn’t a need to turn a social channel, where people are there to connect with friends and family and colleagues, into a full-on shopping experience,” Thalberg says. So instead, Lauder’s Smashbox brand has experimented with allowing consumers to overlay their social graph on top of its commerce site, so that they have a different way of sorting products. “You can sort products by what your friends like versus category of product,” explains Thalberg. “It’s pretty compelling.” Indeed — Thalberg says the brand found that those who used the program spent 47 percent more than those who don’t.

Most agree that that kind of person-to-person communication will drive the development of online commerce. “There is an overarching trend that consumers want to discover in the most personal way possible,” says Hilary Peterson, vice pres- ident of business development for Lyst, which gives users a personalized “style feed” according to their favorite brands and designers. “It’s really cutting out the noise and allowing consumers to focus more and more on what they’re interested in.”


Ticketmaster has been at the forefront of adapting personalization. Users can import their social graph to the site, which then tailors a concert list based on what they and their friends are listening to (and, of course, where they are). When someone buys a ticket, that information then gets automatically shared with their friends, however, the brand confirms with the user that it’s posting the information.


“Personalization still feels a bit creepy,” says Gerten. “My wife was using the Yahoo Social Reader, and a friend had read an article called ‘The Top 5 Things He Does That Turn Me On.’ My wife opened it and an hour later, I see on Facebook my wife post ‘The top five things,’” Gerten laughs. “This is a good example of what not to do.”


Conversely, “When someone buys a ticket on Ticketmaster, we automatically post it on Facebook,” Gerten continues, “but on the confirmation page, it says, ‘You opted in for us to share your information. If you want us to remove it, click here.’


“Just because you can share something,” Gerten concludes, “doesn’t mean you should. That is the risk. Some brands might become overzealous in their sharing.”


The connecting link in social commerce is engagement, between the brand and the consumer — and it doesn’t necessarily need to be online. At L’Oréal, executives talk about the path to purchase, which consists of four steps. Step one is about building brand awareness, step two is about evaluation and creating the desire to learn more about a product by, say, watching a how-to video on YouTube, explains Marc Speichert, chief marketing officer of L’Oréal USA. Third is the buy phase and step four is brand advocacy — getting customers to come back and buy something automatically without going through steps one and two.


“The lines between online and offline are blurring more and more. We have to give the ability to consumers to shop whenever and wherever they want,” say Speichert. “The whole conversation around the buy phase becomes more and more fluid. Speichert cites two examples, from Tesco and L’Oréal. For Tesco’s “Virtual Store” in South Korea, the retailer put up billboards that looked like supermarket shelves in subway stations. Consumers could scan a QR code for whatever products they wanted with their mobile phones and the products were delivered to their homes later that day.

For its part, during fashion week last season, L’Oréal rebranded 50 New York City taxis into either Lancôme or Yves Saint Laurent Beauté “boutiques,” which displayed how-to videos and then enabled shoppers to click on the products used and buy them. Two out of three people who got into the cab snapped the tag, says Speichert. Granted, these are both offline examples of social commerce. But the on- line implications are enormous. “We know that there is a huge correlation between how a brand interacts with the consumer and how it drives commerce. In the past, people looked at it too much in silos,” Speichert says. “It’s not all about thinking that if you want to be successful in social commerce, it has to live on a social platform. It’s that everything that we’re doing will have a social commerce experience inte- grated into it and it will be part of the overall experience.”

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