©2012 PHENOMBLUE LLC.

STEPHEN LEUDIRECTOR, STRATEGY FOR PHENOMBLUE LA

@STEPHLEU

SCOTT BISHOP VP, STRATEGY FOR PHENOMBLUE

@THESCOTTBISHOP

Phenomblue is a brand experience agency.

We are an agency of strategists, designers and engineers using technology to connect people and brands.

The brands we work with.

WTF IS SOCIAL COMMERCE?

It is not limited to a specific platform or network

buying stuff

online

digital coupons

Social commerce is the introduction of social aspects traditionally associated with brick-and-mortar shopping into the digital realm

Much of the time spent is

with experts and getting their advice

before purchase

Social interaction with

friends and peers to receive

feedback

WHY IS THIS HAPPENING?!

What's driving social commerce?

What's driving social commerce?

new interaction mediums

• Online Video: 22hr viewed per month by individual user

• Social Media: 1 in 5 of all minute spent online

• Mobile: 4 in 5 smartphone owners purchase on their devices

Comscore 2011

What's driving social commerce?

new interaction mediums

digitally-connected consumers

• 52% of laptop owners also own smartphones

• 31% of smartphone owners also own tablet devices

• 13% of american that own multiple devices own all three

Pew Research 2012

What's driving social commerce?

new interaction mediums

digitally-connected consumers

on-demand culture• 2 billion hours spent by Netflix

streaming customers

• 4 billion hours of video watched monthly on YouTube

• Wikipedia ranks in the first page results for 90%of Google searches

Comscore 2011

What's driving social commerce?

new interaction mediums

digitally-connected consumers

on-demand culture

Generation C

WHAT'S GENERATION C? I THOUGHT I WAS TALKING TO

MILLENNIALS

Generation C

aged 18-34

American

more female than male

Generation C

aged 18-34

American

more female than male

They are not a standalone demographic defined by age, geographic location, gender or affluence

Generation C, the Connected Generation, are those who integrate Web usage and digital devices as part of their everyday life

These are the social shoppers

84% of millennials rely on UGR and UGC

from strangers in making their purchase.

70% of boomers does the same

Users of age 50+ are the fastest growing

adopters of social media, at a rate of 49%

year over year

Users of age 45 – 50 are the fastest

growing adopters of smart devices, at a rate

of 5% year over year

Bazaar Voice 2012, Pew Research 2011, Nielsens 2012

GENERATION C

Generation C

They are a psychographic defined by their interests, attitudes, values and behaviors

Generation C

They derive their social status by what they share

They exhibit bee-like swarm behavior

They thrive on “social oxygen”

TWITTER IS WHERE I CONNECT WITH STRANGERS

FACEBOOK IS WHERE I BRAG TO MY FRIENDS

Generation C

The Web, and the digital devices that provide access to it, let people define themselves however they want

Generation C

Consumers have never before had so much power to shape a brand

And it works both waysTHE SHOPPER'S INFLUENCE

THE COMPANY'S INFLUENCE

FOLLOW THESE TENETS FOR SUCCESSFUL SOCIAL COMMERCE

(OR RISK A SLOW, INGLORIOUS DEATH)

1. Personalize the experience

2. Let consumers influence their friends

3. Be a thought leader

Geolocation

Facebook-Connect, Twitter OAuth

CREATE A CUSTOMIZED EXPERIENCE AND IMMEDIATE CALL TO ACTION BASED ON THE USER’S PHYSICAL LOCATION

FACEBOOK-CONNECTED USERS ARE NINE TIMES MORE LIKELY TO SHARE THEIR EXPEIRENCES

1. PERSONALIZE: TOOLS

1. PERSONALIZE: EXAMPLE

Beyond user info gathered from its own site, Amazon.com utilizes Facebook Connect to recommend products that match the interests of users and their friends

Ticketmaster’s customized app recommends

products based on user activities

1. PERSONALIZE: EXAMPLE

Provide the digital means for natural social habits

2. INFLUENCE

FRIEND

FRIENDWATCH

TRAVEL

LIKE

LISTEN

Macy’s Magic Fitting room bridges the gap between brick

and mortar and digital, and provides a unique experience

2. INFLUENCE EXAMPLE

2. INFLUENCE EXAMPLE

Spotify’s open graph app broadcasts the customer’s

engagement through multiple points of distribution

When your brand is a trusted expert and advisor, consumers willingly share their own experience and testimonials

3. LEAD

Personality

Expertise

PROVIDE A DISTINCT IDENTITY AND VOICE THAT APPEALS TO CONSUMER'S EMOTIONS

SHARE YOUR KNOWLEDGE WITH CUSTOMERS TO ENABLE THEM TO MAKE INFORMED DECISIONS ABOUT YOUR BRAND

3. LEAD: TOOLS

3. LEAD: EXAMPLE

64% of shoppers look for reviews before making a purchase

By providing sound advice, they may buy your product or share the value they’ve received – or both

Though the actual content

is not directly related to

the product, the brand

personality and value

delivered helps the viewer

to remember the brand

3. LEAD: EXAMPLE

Brands must provide an experience worth sharing, and foster an environment where they can facilitate conversation

BUT HOW DOES IT GET ME $$$$$$?

Traditionally-accepted purchasing process

DECISION

CONSIDERATION

ENGAGEMENT

AWARENESS

How the purchasing process actually works

DECISION CONSIDERATION

ENGAGEMENT

AWARENESS

SOCIAL RECOMMENDATION

Online conversation has a tangible value

that are measured by DPS (dollar per

share) and VPS (visits per share)

The average dollar per share increased by

85% from $1.78 to $3.23

The average visits per share increased

from 7 to 17 visits

17% of social media users have purchased

a product/service based on a friend’s post

Eventbrite 2012, Forrester Research 2012

SOCIAL COMMERCE - THE BOTTOM LINE

Be a part of guiding that social recommendation

Speaking to your audience

companies and brands revolve around them

“we”—not “me”

create conversations consumers can swarm to

join conversations within and across communities

THE PROGRESSIVE COURSE OF SOCIAL COMMERCE

Mobile Shopping

NFC (Near Field Communication)

Logistics

As of Q2 2012, purchases made through a mobile device now account for 15.1% of all online purchases

Technologies and advanced devices enable social behaviors to take place online, providing such interactions with scale, speed and convenience

Mergers and acquisitions are already taking place to support this trend

MOBILE SHOPPING

Source: IBM 2012

Enriches the mobile shopping experience

Provides consumers the option to freely share their personal information

Other emerging technology will allow for seamless connectivity with consumer devices

NFC (NEAR FIELD COMMUNICATION)

If prominent e-commerce players are able to execute this change, big-box retailers will be forced to adapt

Addresses a core customer value (convenience) in a new way

The importance of marketers encouraging social discussion and recommendation of their product/service will become paramount

LOGISTICS

THE SOCIAL COMMERCE REVOLUTION HAS JUST BEGUN

Takeaways

“Social commerce” is not a turnkey solution and not a channel

Social commerce is a conduit for discovery and discussion that bridges the social divide between brands and consumers shopping online

Marketers should integrate time-tested methods of tracking and adjusting to social consumer behavior with technology optimized for multiple platforms

Thanks.

STEPHEN LEUDIRECTOR, STRATEGY FOR PHENOMBLUE LA

@STEPHLEU

SCOTT BISHOP VP, STRATEGY FOR PHENOMBLUE

@THESCOTTBISHOP

PHENOMBLUE.COM©2012 PHENOMBLUE LLC.