The experts gathered Thursday morning to answer retailers’ burning questions about VCs and retail technology investments. What’s the most disruptive technology to look out for? Is mobile really here already? How will Facebook affect e-commerce? Which companies have tapped customers’ current needs the best?
Bazaarvoice’s Brett Hurt moderated a panel of VC insiders including Benchmark Capital’s Peter Fenton, Accel Partners’ Theresia Gouw Ranzetta and Matrix Partners’ Dana Stadler. Let’s dive right into the conversation:
Overwhelmingly, the panel agreed that entertainment commerce (examples include Groupon, Gilt Groupe) has the potential to be the most disruptive technology for the retail industry over the next three years. Panelists agreed that this model of commerce will be applied more broadly across the industry in the next couple years. The application of the social graph also will continue to innovate online commerce. For example, companies right now are using Twitter for brand building and commerce, which will force a shift toward hyper real time and more accessible consumers. Interestingly, none of the panelists thought mobile was a technology likely to disrupt the industry greatly in the next three years. Instead, several of them argued, mobile in the U.S. is far more likely to have an affect only after social commerce has become an integral part of the digital retail industry.
Which retailers found strength and success in the recession? Gilt was one example of a retailer who used the recession to become a game-changer. The retailer has seen tremendous growth in sales and brand awareness during a recession that had consumers seeking great deals online. Companies such as Gilt, Wal-Mart and McDonald’s did well during the recession because they tap into value propositions.
As for Facebook, Ranzetta pointed out that more than 50% of the 400 million Facebook users go to the site each day, making the social networking platform ripe for e-commerce opportunities. Like with all new ventures, early adopters stand to benefit the most. A good example is Threadless, which already generates the same amount of traffic and revenue from Facebook as it does from Google.
The fact of the matter is, consumers are interested in what their friends are buying. They want to know what brand enthusiasts have to say. Polyvore and Tripadvisor are examples of companies that have used user-generated content and feedback to great success. All panelists agreed: Social commerce is here now. Invest in it. Use it. Let your brand advocates evangelize for you for free. Use social networks not necessarily to force transactions, but to build your brand.
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“Use social networks not necessarily to force transactions, but to build your brand.”
This is a great point, since social media provide the purchase tipping point for many consumers. Does that mean developing separate applications, strategies and marketing efforts for every social media outlet? No, that might be cost prohibitive for many. Instead, view social media as just another source for content and use a micro website marketing platform to aggregate and deliver it to the customers, where ever they are; retail site, blog posting, fan websites, viral distribution, etc.
Consider this; if a potential customer leave a site to view Youtube videos, read blog posts or scan Tweets about the product, then statistically they are unlikely to return. However, if that social media content is delivered to the customer on the site, then they will be engaged and product interaction will increase. A Marketing 101 lesson says that this will result in higher conversion rates and strengthen brand loyalty. Not to mention a lot more cost effective and easier to manage.
Social commerce is certainly the way we will be shopping. It seems like a pretty natural integration. We’re excited to see how companies will leverage social media to their advantage: http://www.springbox.com/insight/post/Guiding-A-Brand-Into-The-Social-Commerce-Frontier.aspx
And as far as mobile technology goes, it may be more helpful than disruptive. Some companies are already experiencing success with fashion and mobile marketing: http://www.springbox.com/insight/post/Keeping-Up-with-Mobile-Marketing-Part-5.aspx
The way we are shopping is already social, and always has been. Most of our decisions where to shop and what to buy are based on recommendations from friends, family, and colleagues. This is the way it has been since people started shopping. Equating social commerce to shopping on social media sites makes for a very constricted view of the social context in which shopping takes place. To really tap into the potential of social influence, we need to look into social interactions beyond social media. Only then can we start tapping into the real potential of socially-driven commerce, which is pretty much all personal commerce.
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