Is social media/Web 2.0 for retail just hype or an essential part of doing business in the 21st century?
The Wikipedic definition of Web 2.0 is “a second generation of services available on the World Wide Web that lets people collaborate and share information online.” Wikipedia, being a user-generated knowledge base, is itself Web 2.0. In the ecommerce context, Web 2.0 includes leveraging social commerce on your own site, blogging/podcasting and participating in social networks like Youtube, Facebook, Twitter — and anywhere you or your customers can create and share content.
Retailers often wonder what Web 2.0 / social media activities to be involved with, so this post ranks what I believe are the top 10 Web 2.0 activities for ecommerce based on their business impact.
Please note, in this list, #10 has the highest impact, and #1 the lowest.
#10 Customer Reviews
There’s no end to the number of studies that show the value of customer reviews. Bazaarvoice has a large collection of stats, including:
- Reviews attract customers to your site (and keep them coming back — customers prefer sites with reviews). Consumers who remembered customer reviews on a Web site reported 9% higher customer satisfaction levels, were 9% more likely to make a purchase and 8% more likely to purchase on the next visit (ForeSee Results, January 2008)
- Reviews educate customers, positive reviews can motivate people to buy
- Reviews build consumer trust and confidence about purchases and can reduce returns
- Consumers are willing to pay between 20 to 99% more for a 5-star rated product than for a 4-star rated product, depending on the product category (comScore/Kelsey, October 2007)
- Top-rated product categories delivered 35% higher conversion and 40% higher average order value in a Bazaarvoice study, June 2007
Unlike a lot of social media marketing, customer reviews directly impact conversion, boost customer satisfaction and reduce complaints and expenses for returns. Reviews are also assets you can leverage in email, in-store signage and offline circulars. Reading customer reviews helps you better understand the consumer and your product to improve product descriptions and marketing strategies.
The tough part is attracting customer reviews, but here are 8 ideas to help you attract them.
Some retailers have found creative ways to present customer reviews like Shoelin’e Return-o-Meter, which shows the reasons why a product was returned (fit too short, too wide etc):
This can help the customer choose the right size the first time (wide foot would go up a size, for example), and reduce returns.
#9 Shopping Widgets
Shopping widgets refer to portable content that can be displayed (almost) anywhere on the Web. This allows retailers to push an interactive experience to affiliate sites, customer sites, social networks and more.
One of my favorite examples is the Zazzle MySpace widget. Zazzle provides over 15,000 bands with the ability to sell band merchandise (printed on Zazzle products) right through the band’s MySpace page where fans “hang out.” MySpacers can browse products and complete the transaction right in the widget, and Zazzle handles payment, order fulfillment and tracks commissions for users who generate sales through the widget. This is one of the rare applications that just might work in social networks.
“Almost there” is Due Maternity’s pregnancy countdown clock. Unfortunately it’s only a desktop widget, so you can’t post it to a blog or social network. This is something that moms-to-be would actually be excited to post for their friends to see, and is nice branding for Due Maternity. Linking the clock to a baby registry would make it transactional and could generate nice ROI.
Amazon has a plethora of widgets available for its affiliates. One of the most interesting is Omakase, which displays products in the widget based on keyword relevance of the content on a publisher’s page. More relevance means more click through – a benefit to Amazon, affiliates and customers.
Best Buy offers an application programming interface to any developer to “remix” and build cool new tools and applications using the Best Buy product catalog. Innovation is rewarded with cash prizes.
The Alvenda shopping widget allows retailers like 1-800-Flowers to “open up shop” on any other website. Shoppers don’t have to leave the publisher’s site (great for the publisher and customer), and the order is processed through the retailer’s regular order system. Alvenda’s shopping widget will have contextual targeting ability in the near future (like Amazon’s Omakase).
Zazzle’s chief strategy officer James Heckman says: “Anyone can build a widget. The investment is very low. It’s not like you have to build a whole new web site. And your return is almost immediate.”
#8 Question and Answer
Better than user forums, ask and answer tools bring the conversation right onto the product page, and open up questions to the shopping community to answer. You’re likely to get a better answer from someone who owns the product than from a customer service rep who hasn’t seen or used the product.
Both Bazaarvoice and PowerReviews have question and answer products, named Ask & Answer and Answer Box, respectively. Here’s an example of Ask & Answer in action on Shoes.com:
Backcountry built its own solution:
Like reviews, questions and answers improve product information and can improve conversion. They also give you insight into customers’ heads. The downside is the time lag between a question asked and answered, and sometimes the quality of consumer-generated answers (must be moderated for accuracy).
Another way to ask and answer questions is through Twitter, the latest Web 2.0 hype machine. Users can get nearly instant answers to questions (provided they’re under 140 characters) directed at a retailer or the general Twitter universe.
I’ve said it before, Twitter is word of mouth on steroids. At the very least you should have claimed your company name so no one else brandjacks it, and you should be monitoring what is being said about you. Beyond that, retailers can use Twitter as an alternative form of RSS/email marketing, a way to share deals and coupons, promote contests or other simply put a human face to your company.
We may see retailers pulling Twitter conversations (every mention of their brand) right onto product pages like Ask & Answer tools – however, this can be a risky move. Another option is showing your own corporate account’s tweets on your site, like EyeBuyDirect:
Showing a preview of what you tweet about rather than just linking to your Twitter profile may encourage more folks to follow — they can quickly assess whether your posts are interesting to them, rather than make assumptions.
Don’t expect Twitter to be a major sales driver, yes Dell sold $3 Million worth of product through Twitter — but that’s still a tiny fraction of Dell’s overall sales. It’s a marketing/reputation management/customer service channel. It’s about allowing customers to communicate with you on their terms — and for some customers that’s through Twitter, not by telephone or email. Any lift in sales is gravy.
#6 User Generated Cross Sells and Photos
User created lists like Amazon’s Listmania and the iTunes Store’s iMixes can help customers discover new items from birds-of-a-feather and are one more way for Amazon and Apple to move more product.
Just over a year ago I asked why nobody was doing user-generated cross-sells in the apparel industry. Wetseal has had its Runway outfit builder for some time now, but I recently noticed it has integrated the community’s creations onto product pages:
Wetseal customers can also browse by outfits that other visitors have created, or build their own. You can also “shop by outfit” by adding as many of the items in the “set” as you like to your shopping bag:
Though this concept may not work for every industry, certainly fashion and home decor can benefit.
User-submitted photos can definitely improve conversion on some sites, including EyeBuyDirect’s Wall of Frame. I wrote about this way back when, and EBD has since updated the tool to include features like attribute filters:
Speaking with the CEO of EyeBuyDirect, the Wall of Frame is a huge success. Customers love the “try before you buy” concept and seeing how glasses look on “people like them.” Uploaded photos are watermarked with the EyeBuyDirect branding and can be shared with Facebook and Flickr with one click.
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Again, user submitted photos are great for fashion, cosmetics, home decor and the such like, but are typically less effective for electronics, software, industrial supplies etc.
#5 Facebook Pages
I put Facebook as a middle-of-the-road social media activity because your success is likely determined by how popular you already are. Some of the success stories include:
The best Facebook Pages have taken advantage of the platform to create a social network for their most raving fans that lives where they play, not on the retailer’s website. This makes it much easier to share and invite other friends to participate, rather than forwarding emails or product pages to friends that drive people to the retailer’s website.
For example, Sephora leverages Discussions and Polls among other features of its Page:
The beauty retailer even asks fans what Sephora’s ideal posting frequency should be:
Victoria’s Secret has special features like Angel Profiles (bios of the famous models), information on how to find the best fit and links to the store to mix and match products which can all be shared to fans’ Facebook profiles:
Other retailers who post special offers and other content should include these little “Share” buttons.
American Eagle Outfitters makes it easy to invite friends to become fans, and promotes its Twitter feed:
Most exciting is 1-800-Flowers’ Shop tab which includes its fully functioning storefront widget:
Though Facebook Pages are free, the maintenance and promotion of them come at a cost. Consider the additional resources you’ll need to customize your page design and features, the moderation of the page (do you have a social media manager?) and the marketing you’ll need to do on your website and in emails:
Some retailers run custom promotions to get people to sign up for their Page, and evangelize to friends:
Other Facebook activities that I believe have little return on investment are Facebook applications (unless they live within the retailer’s Page) and display ads which in my experience and in chatting with other retailers who’ve tried them — attract a lot of clicks but poor conversion.
Products like ShopTogether and PurchLive add a social component to a retail site by offering the ability to invite a friend to co-browse an online store in real-time. For example, Charlotte Russe gives the option to invite friends through Twitter and Facebook. It updates your status with a shortlink for anyone who wants to join you on your visit.
While I think this technology is really innovative and cool, I’m not completely sold on the idea that people want to shop online together unless it’s a consultative situation, like a wedding planner or interior decorator with a client. I do see a lot of potential in co-shopping technology for customer service, improving live chat capabilities.
#3 Social Widgets on Your Site
Like anything social, this makes sense for certain industries and less sense for others. EyeBuyDirect has added a Twitter widget, as previously mentioned, and Google Friend Connect to its Wall of Frame page:
Google Friend Connect and Facebook Connect allows site visitors to “join” your site’s community, explore other members’ profiles and leave comments on your site. It’s a nice way to collect authentic site comments and testimonials but expect participation to be lower than other web 2.0 activities.
#2 Retail Blogging
Blogs can be a great way to connect with customers, talk about new products, share interviews, videos, podcasts, news, photos and jokes. They can be a branding/loyalty vehicle. They can attract links and search engine traffic. They can put a human face on your business.
Retail blogs also take a lot of work. They require a lot of love and nurturing to stay fresh and popular. Posting a random article every 3 months doesn’t cut it. And they are less likely to drive sales than other Web 2.0 initiatives.
Back in 2007 I found 84 blogs from the Internet Retailer Top 500 List. Of those 84, 29 are abandoned or offline — that’s 35%! Whether due to a lack of resources, resolve or results, this failure rate does not build a great case for retail blogs.
This doesn’t mean there aren’t retailers that have great blogs. Bluefly, Powell’s Books and Sephora, for example. These retailers have stuck to strategies that work for their audience and support long term engagement and loyalty that hopefully translates into sales (or at least better search rankings).
#1 Video Sharing
Though I’m pretty bullish on product video — I think it can greatly improve conversion rates and reduce returns, I’m so-so on video sharing. It’s very simple to set up a Youtube account (or any other video sharing site) and upload videos, which for most channels may get a couple hundred, maybe a couple thousand views — but there’s a disconnect between watching a video and buying a product through a video sharing site. This could change if Youtube builds out its click to buy capabilities beyond iTunes (links to purchase product embedded right in the video).
There are some retail success stories out there, for example the TigerDirectBlog channel, with over 34,000 subscribers. Not sure how it’s impacted sales, but it’s a strong indicator of thought leadership among gadget geeks.
Adding video to Youtube and other video sharing sites could help you get some additional search engine exposure, since Google likes to mix video results in with regular web pages, news stories and image results (blended search). Youtube itself is a search engine, so for the effort required to upload video you already use on your site, this gives you an extra benefit. And like widgets, people can put your video on their blogs and websites if it’s interesting / remarkable.
In today’s online retail environment, social tools are becoming more and more important as the Web itself becomes more social — yet retailers struggle to find social tactics that drive real sales and ROI. Not every social activity is appropriate for a retailer – it depends on the product it sells, the competitive industry, consumer behavior and the retailer’s commitment to invest in the resources to develop and maintain social initiatives.
The aim of this post is to give you an idea of what kind of activities you can engage in, and the likelihood of real business value each activity will have. As with anything, your mileage will vary.
PS, if I could add a #0 to this list (absolutely no impact) it’s Digg This buttons. I see them often on top retailer sites and that puzzles me. It takes an extremely hot story to get popular on Digg. It’s a bit like asking customers to nominate you for President.