STQ 06

October to December 2012

Colours and Brand Identity

The Consumer Generated Funnel

Ethics and Social Commerce

Social TechnologyQuarterly06

06© 2012 Kuliza Technologies Ltd. All Rights Reserved.

Making Loyalty Programs Work

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Editorial

With a medley of platforms available to buyers today that have similar prices and offers, brands are focusing on generating loyalty. Brands online are no longer fighting only in terms of price, presence, or product range. They are battling it out to have influential shoppers and brand advocates to ensure repeat purchases and build a loyal

community of such shoppers.

In the era of social-defined commerce, a brand that garners loyalists and not fans alone, runs campaigns for experiences and not marketing alone, is the most popular, visited, and shopped-at destination. It is on these shopping platforms one observes that loyalty is not a passive activity, but an active one with the kind of

deluge and traffic recorded in information sharing.

Social is the genome of commerce. Social creates lasting and remarkable relationships that increase propensity to repurchase and recommend. A loyalty card is no longer a plastic card for accumulating points on repeat purchases; there are now designs for loyalty programs that are based on insights from various fields that redefine methods of driving loyalty. While designing and using ‘big’ amounts of data, careful consideration of code of ethics will determine whether social commerce is going to be as effective as predicted. Lifestyles, cultures, and practices too translate into understanding needs of people influenced by social commerce. All these come together and contribute to what social commerce aims at: brand advocacy and loyalty, created through word of mouth. The brand that has reliable word of mouth is the one with a large, voluble community of loyal customers

and least number of advertising campaigns.

This is the difference between online commerce and social commerce done well.

Diarmaid ByrneVandana U.

EditorsSocial Technology Quarterly 06 The Social Technology Quarterly is a research publication that distills the signal from the noise in the fluid social and mobile web domain. From multiple perspectives it analyzes commerce, campaigns, and communities through the lenses of business, technology, design, and behaviour.

Social as a Driver of LoyaltyVandana U.

Rebrandings of Technology CompaniesAmit Mirchandani

Impact of Colours on Brand IdentityAnindya Kundu

The Proof is in the ExperienceVandana U.

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Making Loyalty Programs WorkDiarmaid Byrne

Thinking Big DataSiddharth Balaravi

Experience ShoppingAnish Dasgupta

The Consumer Generated FunnelDiarmaid Byrne

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Ethics and Social CommerceSaswati Mitra Saha

The Maker MovementPayal Shah

Access Greater than OwnershipKaushal Sarda

Learning by Keeping your Eyes OpenNehal Shah

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Campaigns

Commerce

Communities

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Social Technology Quarterly and the STQ logo are trademarks of Kuliza Technologies Ltd. Their reproducion without the proper permissions is unlawful.

© Copyright 2012 Kuliza Technologies Pvt. Ltd. You are free to share and make derivative works of this publication only for non-commercial purposes and under the conditions that you appropriately attribute it, and that you distribute it only under a license identical to this one.

Social Technology Quarterly 06October to December 2012 Published by Kuliza Technologies Ltd.

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Subscribeto Social Technology Quarterly at:

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Contributors

Amit MirchandaniChief Creative Officer at Kuliza & MD at Lucid Design

Anindya KunduVisual Designer at Kuliza

Anish DasguptaMarketing Manager at Kuliza

Diarmaid Byrne Chief People Officer at Kuliza

Kaushal SardaChief Product Officer at Kuliza

Nehal ShahDesign Researcher

Payal ShahCo-founder and Maker-at-Large at makesplash.es

Saswati Saha MitraConsumer Behaviourist

Siddharth BalaraviCo-founder of GetJugaad

Vandana U. Marketing & Communications Specialist at Kuliza

Diarmaid Byrne [email protected]

Vandana U. [email protected]

Amit Mirchandani DesignLucid Design India Pvt. Ltd.www.lucid.co.in Personal is social,

behaviour is social,

and loyalty is social.

Now all commerce is

social.

Social TechnologyQuarterly06

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Brands are going social with the right mix of communications technology and consumer values. Social is a catalyst that is driving unprecedented loyalty, built not at one stage but across various stages and elements of the shopping process.

by Vandana U.Photo Credit: zion fiction

Social as aDriver ofLoyalty

In the age of social commerce, where traditional e-commerce is no more even a nomenclature, loyalty seems to spell a new pattern with new trends. With several factors determining shopping- ranging from best prices, proximity, recommendations, to mood-swings even; it is necessary to understand not only how loyalty and social commerce go hand in hand but understand how social is a driver of loyalty. It goes without saying that shopping has always been a social activity. A lot of definitions place social commerce under the huge umbrella term of e-commerce. Currently, as defined by Renata Gonçalves Curty and Ping Zhang, “Social commerce is broadly considered to encompass commerce activities mediated by social media where people do commerce or intentionally explore commerce opportunities by participating and/or engaging in a collaborative online environment.”To the process of buying and selling online, social adds layers of conversations and interactions between consumers, communities, and businesses. These conversations are the new points-of-sales. Businesses are leveraging social, making it highly integrated and highly relevant to see new growth. The assumption is obvious: if social elements are necessary to drive in engagement, they are vital to driving loyalty too.

Being Social

The ontology of online commerce now is social as the smart-technology-driven buyer is no longer merely a buyer nor is passive. The buyer today is socially nourished through elements such as sharing, likes, conversations, reviews, and interests. The use of social

Campaigns

http://www.flickr.com/photos/zionfiction/7465637256/

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Social Technology Quarterly 06 Kuliza

network serves social interaction and encourages user contribution throughout the purchase process - right from research to activities for post the purchase. There is a sure transfer of power because advertising alone would not generate that much needed buzz. Whether one terms it ‘social’, ‘viral’ or calls it ‘word of mouth,’ sharing is an unstoppable activity.

A brand that goes ‘social’ brings in the elements that revolve around a customer not only in a terms of being a part of the ‘target’ market but include the entire social world of the shopper. Interests, behaviours, shopping patterns, activities of the shopper and that of the shopper’s friend circle are all roped in. Customers have varied and new ways to research, compare, evaluate, purchase, and provide feedback on products and services. The agenda of engaging a shopper personally does not mean providing attention alone, but making sure anything the person needs, would like, and would want help, guidance from are all available. The superlative bit of it is that it is effortless for the shopper. After such a shopping experience the brand becomes the sought-after destination. It is these brands that, irrespective of whether they have the product the customer is looking for, will be relied on and people will be loyal to.

Elements of Social

A typical purchasing process begins with awareness- about a brand, its utility, etc, moving on to being interested in the product and finally purchasing it. Radically working out commerce includes layers of social in each of the stages in the process. There are different aspects on which businesses are creating conversations. Consumers may end up finding themselves in situations, unable to make purchase decisions. In such a situation when the next step to take is not known, advices, recommendations, support all kick in. The people in the person’s social world around the customer act as guides towards decision making.

The following are some of the identified elements of being social:

• Content: A great social experience includes presenting the right content to the right customer at the right time. Curation is a serious affair in social commerce. From purchase history to what devices people are on, content has to be new, useful, and that adds value to consumers.

• Referrals and recommendations: A report made by Nielsen indicated that 92 percent of people go by recommendations for a purchase online rather than believing in advertisements.

• Reviews and ratings: Showcasing reviews from satisfied customers, friends from their social networks adds to the credibility of the brand and is extremely influential in conversions.

• News feed: Friends see stories as they appear in the news feed. Any and every activity is again a point of sale. This stream flows and connects brands to people super fast.

Credits

Top: Stuart ConnorMiddle: Aural AsiaBottom: iBaNe

• Reward: Rewards increase repeat purchases and build loyalty. Ranking people, awarding points, and offering rewards tempt people to stick around longer and even work towards it.

• Encourage advocacy: Authentic advocacy influences the purchase decisions of everyone around.

There are applications, tools, and technologies that make all of the above happen. Tools have been made that measure social ROI rather accurately: from tracking number of likes, tweets, followers, pins, re-pins, to influences. Sophisticated analyses, metrics, campaigns designed based on insights for right targeting, conversions, word-of-mouth to generate great loyalty have come up. The surplus data about behaviours, psyche, etc., offer companies opportunities to even predict shopping patterns.

Comprehend and work on the entire shopping behaviour cycle with the right suites of applications. Social commerce is about customer-satisfaction, providing great experiences, and being customer centred over the traditional sense of being profit and transactional driven. There is a great deal of focus on relationships; the motive is no longer sale but repeat sales along with achieving a dollop of loyalty. To sell better and build loyalty from social audiences stimulate them, add value, and transfer the power of transaction to them. Create environments and platforms that actively engage with users, maintain relationships in a personal manner- that replicates building one to one rapport. The feminists fought for their rights with the motto “The personal is political” and social commerce is making its stand with “The personal is social.”

References

Cavazza, Fred. “The Six Pillars of Social Commerce.” Forbes. 02 Jan

2012.

Chaney, Paul. “Word of Mouth Still Most Trusted Resource Says

Nielsen; Implications for Social Commerce.” Social Commerce Today.

16 Apr 2012.

Curty, Renata Gonçalves, and Ping Zhang. “American Society

for Information Science and Technology.” American Society for

Information Science and Technology. 48.1 (2012): 1-10.

“Social Commerce.” Wikipedia Inc. 10 Sep 2012.

“Starbucks Card.” Starbucks. Starbucks Corporation. Web. 10 Oct

2012.

• Group buying: Just as how news spreads quickly, group buying, group gifting spread word about a brand, offering convenience in terms of gaining discounts and making gifting easy. It is no wonder that group buying can make brands go viral.

• Exclusives: Exclusive fan deals, discounts for sharing, personalized shopping experiences, pop-up shops, help make brands stand out. Offering a privilege or a benefit, and a bonus that no one else offers ensure people stay and the cycle of recommendations and referrals continues.

• Rewards: Incentives drive people to respond. Through social, make users perform targeted, marketing actions. Offer rewards for expressing views, writing a review, clicking a link, sharing a promotion, referring a friend, etc. Adding game techniques to the incentives is another brilliant move.

• Socially driven loyalty programs: Starbucks is famous for its loyalty cards and programs. Making a move to going social with gifting cards, rewards, and points, the program gets better with the convenience it offers in terms of technology. The card can be added to the Starbucks mobile app, there is an app that allows users to check the level they havee reached in the program using the “star” - My Starbuck Rewards’ currency, and there are elements of fun. When one makes a purchase and goes to that tab on the mobile app, one sees a star actually fall into a cup and that tracks progress over time. This is evidence enough to show that loyalty programs are now no longer for ensuring repeat purchases built around points and rewards and repeat purchases but built around people: enabling social mechanics and designing a simple user engagement model.

Going Social

Going social is about redefining engagement. Engagement is not about interacting with random games and making offers after one accumulates fans. There are various touch points in all the phases of the shopping experience where engagement and personalization need to be driven.

• Acquaint: To drive awareness around a brand that claims being ‘social’ it’s is necessary to reflect that in the awareness drive, which has to be social in nature to elicit interest. With the plethora of data available, set up campaigns that involve people together be it a contest or a basic game.

• Drive: Create a social world where people can participate in activities together. Be it in the form of extending referrals or group buying, make the world a personalized one with the help of that deluge of data available about online behaviours and activities.

• Support: In order to be a core part of people’s lives, engage, talk, and extend support in forms of content, stories, expressions, etc. Conversations that will help the community will also build brand advocates. They curate information, influence other buyers, and communicate about brands across different social networks.

http://www.flickr.com/photos/stuartconner/

http://www.flickr.com/photos/auralasia/

http://www.flickr.com/photos/ilargi_/

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3. Mindtree

Mindtree’s original logo looked more appropriate as the signboard to a less discerning art gallery rather than a logo for a global information technology services corporation with 11,000 employees based all around the world. The revised logo is certainly more appropriate if not a little expected for what such a corporation ought to look like. Nevertheless, it is a very positive step in the right direction, communicating capability, professionalism, technology, and a global perspective.

1. Microsoft

Microsoft has taken a page out of Apple’s mandate on simplicity to reveal this new logo. Referring to some of its consumer logos from the past, the new logo does away with the differentiation between the corporate and consumer logo: a silly idea to begin with. While the applications of the new logo are very clever considering how Windows 8 is composed of an array of functional squares, the execution is a bit weak. The logo looks nondescript and simple rather than unique and simple.

2. Twitter

If a company has been able to replace its name with a symbol, that can be considered a huge sign of success in my view: think Nike, Mercedes, Shell, and Apple. Where twitter makes this success even sweeter is in the tightness of it all - not only does the symbol represent the brand name and the company’s mission statement, but also the very action that the company’s product enables you to do. This sort of clarity in the messaging of the logo comes by once in a generation!

Focus

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5. Shutterstock

The old logo shown here is not exactly the oldest logo in the history of Shutterstock. In the last ten years the company has rebranded itself at least four times, starting with a rather likeable camera with a film strip rolling out of it with the words Shutterstock on it. As the logo evolved the camera became more and more abstract and the type became an arbitrary continuation of letters where ever possible. I am happy to say that the new identity is a beautiful and refreshing departure from that line of thinking. The two corners of the frame that define the “o” can be used in myriad ways across any materials, highlighting what ever the company wishes to call attention to. Bold, inventive and cleanly executed!

4. StumbleUpon

StumbleUpon’s new identity represents a healthy evolution from the dot com era logos of the early 2000s. The new colours are reduced to just two, both bold and vibrant. A graphic reduction sees unnecessary gradients and shadows eliminated, giving the logo a clean minimal feel. The interplay between the mark and the type is more harmoious. This has a knock down effect to the website, and that is where massive strides have often been made: gone is the light blue and white machine language based functionality that has typified so many sites built in the last ten years.

Rebrandings of Tech Companies

by Amit MirchandaniPhoto Credit: Underconstruction.com

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Colours are crucial for brands, especially because of the visual impact they can create in terms of establishing values and ideas a brand would want to project. With their aesthetic properties and psychological impact colours can turn around a brand’s identity.

by Anindya KunduIllustration Credit: Anindya Kundu

The roots of the word ‘brand’ can be traced back to the old Norse word ‘brandr’ which denotes the ancient use of hot iron to mark cattle of one farm from another. The word ‘maverick’, which originally meant unbranded cattle has its origins in the story of a Texas rancher, Samuel Augustus Maverick, whose neglected cattle were rounded up by neighbouring ranchers.

Branding also found its expression in markings on bricks, watermarks on paper, and signs on barrels to distinguish products. Even the signatures of master artists such as Leonardo da Vinci’s on paintings can be considered as a form of branding. Much after, branding was done with the use of logos on printed posters and product packaging. With the advent of radio and television slogans, jingles, and mascots started appearing with brand advertisements.

Today, a brand is a voice that gives a unique identity to an organization or entity,

distinguishing it from others. It often comprises the name, corresponding typography, shapes, symbol, logo or any other design elements including the colours used by the organization. Great branding is effective in driving loyalty, bring to limelight the products or services offered by a company and boost sales or transactions in unparalleled ways.

Colour is a prime visual element people perceive. Hence it plays a crucial role in any design. It is extremely important in branding because not only does it add aesthetic value in terms of art but also because different colours have different psychological impacts on viewers. Thus the choice of colours in brand identity requires to be made according to the vision of the company and the impact it wants to create on its specific audience.

A Glimpse into Colour Theory

Colours can be fundamentally described

Impact of Colours on Brand Identity

Campaigns

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using two models – the additive model and the subtractive model. The additive model of colour mixing is based on the behaviour of light mixes. Here red, green, and blue light combine to produce white light. The behaviour of mixing of colour pigments like any dye, paint or ink give rise to the subtractive model. In this case, any colour can be generated by mixing the colours cyan, magenta, yellow, and black, and is the foundation of colour printing and photography. Colours can also be defined using the three attributes of hue, saturation and lightness.

Based on the traditional “Colour Wheel” that dates back to Goethe’s Theory of Colours published in 1810, red, yellow, and blue are the primary colours. By mixing the primary colours, secondary colours such as orange, green, and purple are produced. Consequently, by mixing a primary colour with its adjacent secondary colour the tertiary colours - vermilion, marigold, chartreuse, aquamarine, violet, and magenta - are

derived. Colours can also be divided based on their relative ‘temperature’, based on both nature and cultural norms. Warm colours include red to yellow including orange, pink, brown, and burgundy. Cool colours include green to blue including shades of violet. Cool colours have a calming effect and appear to recede, while warm colours represent heat and motion, pop-out and create emphasis. Hence cool colours are often used for backgrounds and warm colours for making headings or graphics to stand out.

While choosing a colour scheme or a combination of colours that work together, relative positions of colours in the colour wheel offer an advantage. Thus some of the basic colour schemes which exist are: monochromatic (tones of a single colour), analogous (colours closely related), complementary (colours opposite to one another), split complementary (when complementary colours are split to two close and equidistant colours), triadic (three

colours equally separated in wheel), and the tetradic (also called double complementary).

The Functional Impact of Colours

The functional aspect of colours is to create emphasis or prominence, which is a primary goal of branding. Thus along with using the other principles of placement, continuity, isolation and proportion, contrast between colours is the factor determining readability and attention of the viewers. Black on white is the easiest to read on both paper and computer screens. Other most legible combinations include black on yellow, green on white followed by red on white. As mentioned earlier, warm colours tend to pop-out more compared to cooler colours, which appear to recede. This can be used effectively to emphasize branding.

The Psychological Impact of Colours

Different colours have different emotional impacts associated with specific moods.

Red is the colour for passion. It is known to increase human metabolism and has an exciting, dramatic effect. Even the richer colours- burgundy and maroon find their appeal amongst wine and fine living enthusiasts.

Orange is an active and energetic colour. It promotes enthusiasm and creativity. It has a less formal and more inviting appeal to it. It works well for anything related to food and cooking. Being hard to find in nature they it also stands out and hence used in life-jackets, road cones and hunting vests.

Yellow is a highly active colour and fosters happiness. Hence it is the colour of smiley icons and is commonly used to evoke friendliness.

Green is the colour for nature and freshness. It is also associated with currency and hence wealth and prosperity.

Blue is the colour of tranquillity, peace and stability. It symbolizes openness, intelligence and faith. The negative connotation associated with it is melancholy as expressed in blues music.

Purple has both the stimulation of red and the calmness of blue. It is the colour of royalty and extravagance. This association stemmed from the difficulty in preparing purple dye in ancient times. It is also commonly seen in gemstones, flowers, and wine.

White is the colour associated with purity and perfection. In some Asian cultures it is the signifier of death.

In spite of all its negative connotations with darkness, evil and death, Black is also the colour of elegance, power and strength if

used appropriately in certain contexts.

Colours and Aesthetic value

The aesthetic values of colours are derived from the choice of colours according to the context it has been used in as well as from the harmony in the colour palette. This harmony can be obtained from the use of the basic colour schemes – monochromatic, analogous, complementary, split complimentary, triadic, and tetradic. Adobe Kuler is a great resource for finding and creating sophisticated colour themes based on these basic colour schemes.

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Red

Turquoise

Nature & FreshnessCurrency & Prosperity

Friendliness & HappinessEnergy & Dynamism

Green

Spring Green

Yellow

Orange

Cyan

Ocean

Stability & IntelligenceCalmness & Peace

Passion & DramaIncreases Metabolism

Blue

Violet

Magenta

Raspberry

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Use of colours across different sectors

Different business sectors show particular preferences towards certain colours:

Food and Beverage Industry It has an affinity towards the colours red, yellow, and orange. This is apparent in the branding of Coca Cola, McDonalds, KFC, Taco Bell, Café Coffee Day and almost any other fast food chain. Red stimulates appetite, while yellow and orange impart friendliness. Green is also used as in Subway branding to indicate freshness and nature. Pepsi and Dominos introduce a relatively uncommon blue, but it again has red to offset and contrast it.

Automobile Industry Automobiles look for a classy appeal and usually use black and chrome textures. Prominent examples include Nissan, Honda, Jaguar, and Mercury. Red is also used sometimes to evoke passion as we can notice in Toyota, Audi, Suzuki, Fiat, and many others. Reliability and stability are evoked by BMW, Ford, Mazda, Volvo and Saab. Even the sporty yellow and orange find their expressions with Ferrari, Renault, Opel, and Chevrolet.

IT IndustryComputers and IT services companies have a preference towards blue as it gives the sense of clarity and stability. DELL, HP, IBM, Intel, Microsoft, Facebook, and eBay have blue as the foundation to their branding. In case of electronics both red and blue find prominence. Samsung, Phillips, Sony, and Panasonic use blue while others like LG, Canon, Toshiba, Hitachi, and Bosh are based on variations of red.

Telecommunications Sector Organizations in the mobile and communications sector have similar colour preferences in order to represent energy, dynamism, reliability, and friendliness. Hence colours such as red, blue, yellow, and orange are common. For example, the blue branding of Nokia, Samsung and Ericsson, the red of

Vodafone and Virgin, and orange used by Orange are examples that stand for these attributes.

Retail SectorThis sector too uses a lot of red to capture energy, yellow and shades of orange for friendliness, and a splash of blue and green to denote freshness.

ToysSince children are attracted by primary colours, logos of toy companies often use bright primary colours. Children tend to prefer primary colours and hence clothes and toys typically have primary colours.

Fashion IndustryThe colours associated with luxury are black and richer shades of red like brown, burgundy, maroon, and forest green. Hence most designer labels use either black or these colours to make their statement to their niche audience. This is also the case with most wine, liqueur, and other premium products.

Colours have a deep impact on the branding of a product or service due to its psychological, functional, and aesthetic properties. Although there are no fixed rules for choosing colours for a specific brand, certain trends and patterns according to the industry and audience profiles can be mapped. While there are certain norms and rules based on colour theory, exceptions also exist and have alternative appeals to stand out of the crowd.

Selling technologies by providing the space to any customer to experience a device before purchasing adds to the whole experience of buying a great device. With this idea replicated for purchasing most goods and not only devices, the verdict is clear. It is the experience that closes a deal. However, in the age of social when with a click an experience can be made exclusive, only a handful of experiences online really follow the key word: exclusive. Here is a portfolio of events and experiences enhanced by technologies. These represent the incredible results and outcomes achieved through a mix of behaviours, activities, and technology.

Smart businesses are using technologies to create integrated physical, digital, mobile, and social shopping experiences and events where customers can access plethora of information while they shop. Such events that go across all marketing and shopping channels provide the insights and data one can innovate with. Stores are rolling out apps that help accomplish rich experiences with each customer. These events, activities, and experiments are great examples of embracing the smart customer with smart technologies and provide meaningful cohesive customer experience. This ensures that online and offline experiences are not separate but integrated for holistic shopping experiences that lead to repeat purchases and brand loyalty. Technology enables and experiences win!

The Proof is in the Experience:Enhancing Experience by leveraging technologies

For brands, apps serve as a lasting marketing channel that enables direct contact with target audience. They offer not plain engagement but holistic experiences. Here are some activities conducted by brands combined with online, offline and augmented reality elements that can awe any marketer.

by Vandana U.Photo Credit: Micurs

http://www.flickr.com/photos/micurs/

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A phenomenon that has driven crazy online sales and engagement is augmented reality. Virtual reality is a simulation of a real environment; however, people get into a different reality defined by the virtual space and goes beyond physical reality. On the other hand augmented reality, as Wikipedia describes it, “is a live, direct or indirect, view of a physical, real-world environment whose elements are augmented by computer-generated sensory input such as sound, video, graphics or GPS data.” Erick Schonfeld opines that Augmented Reality enhances the real world with digital data, and therefore it is more interesting than a fabricated environment.

An experiment that caught my eye was the mix of apps and augmented reality with pop-up stores. The concept of pop-ups is not new any longer on the social commerce space. With the success of pop-ups soaring, adding augmented reality to them seems a clever move.

A leading shoe brand dedicated to sport culture, Airwalk set up invisible pop-up shops in New York and Los Angeles. Inspired by the idea of a treasure hunt, 600 pairs of shoes were hidden. People who wanted a pair of Airwalks - the Ladies Jim Plastic and the men’s Jim Tennis - had to download the GoldRun app on their smart phones. People headed to Venice Beach, Los Angeles, or

1Washington Square, New York City, to capture virtual versions of the sneakers and GPS-links to each location were provided. As soon as people located a shoe on their phones and took a photo of the shoe, they were directed to Airwalk’s e-commerce site and given a pass code link to pre-order the exclusive shoes.

For Airwalk, hangouts and famous locations in the two cities turned into their stores. Without a brick and mortar shop, 600 pairs of shoes were sold in a day. Airwalk witnessed the highest amount of traffic on its site during this event.

Airwalk:Augmented Reality Campaign

Credit: Piermario

Another experience leveraged with social media (not with an app, but a map) is by Volkswagen Brazil. The motor brand sponsored the Planeta Terra Festival in Sao Paulo and promoted its car, the Fox, through a mix of Twitter, Google Maps, and real locations where prizes were hidden. Similar to a treasure hunt, ten tickets to the festival were hidden across the city and these were displayed on a microsite using Google Maps. However, one couldn’t zoom in to spot the exact location unless it was tweeted about. The more number of tweets containing the

2hashtag “#foxatplanetaterra” were sent, meant the closer the zoom on the map. The first ones to arrive at a location where tickets were hidden would win. It is reported that in less than two hours after it began, the campaign became the number 1 trending topic in Brazil and the event stretched to 4 days. With a mix of online and offline strategies, Volkswagen generated a huge amount of word of mouth. The campaign played on behaviours through gamification, such as the desire to win. With tweets acting as gates to levels of zoom, the excitement of crossing each level

and being closer to the ticket pumped in the required adrenalin.

Although Volkswagen did not offer an experience directly in relation to the car, which perhaps would have been more relatable, the outcomes of this campaign nevertheless were phenomenal.

Volkswagen:#foxatplanetaterra

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4Speaking about motor companies, Fiat too stepped onto the bandwagon of experiences. Catalogues can be heavy to read. Instead of making a boring read, Fiat made people experience its catalogue as a part of its Street Evo campaign. Fiat broke the old pattern of visiting a showroom, checking a catalogue, and test driving the car, by creating a new gamified experience. Promoting Punto Evo to its evolved and tech savvy audience, Fiat came up with a mobile app that read road signs as QR codes. Instead of merely reading the features of the car off a catalogue, after capturing a road sign, one could get a visual on the feature of the car on one’s phones. So if one scanned the stop sign, the user would get to know all about the new breaking system; a curve ahead sign would inform the user about the car’s intelligent lighting system that guides the driver in curves. Now that sounds like a regular app. However, Fiat added a game-like experience by hiding hundreds of prizes in the traffic signs, the first ones to discover them won the prize. The campaign saw 1,000,000 traffic signs being spotted on week one, an 82 percent increase in test drives, and it is Fiat’s most-seen catalogue in the company’s history. What made this campaign a success was the incentive part of it. Incentives and rewards make the experience all the more fun and worthwhile. The app and the experience manage to satiate any visitor’s curiosity. Anyone buying a car will have numerous questions, and what better way than this to answer, through a game-like experience.

3Fiat:Street Evo

Credit: Bokeh Burger Lynx’s fallen angel campaign used augmented reality to reflect itself as a brand that brings a man’s fantasies very close to reality. With the objective of raising awareness and driving purchase of the Lynx Excite range, Lynx exploits social media to engage its target audience - 18 to 24 year old males - with angels seemingly falling from the skies for them at London’s Victoria Station. A live broadcast, yet highly personalized, it bent towards the angle of literally fulfilling fantasies. It talks to men in an exciting way, making them feel that they are attractive, by making a woman ‘literally’ fall for them. Also, combined with a Facebook game in which Lynx challenge users to try and release one of the angels - model and actress Kelly Brook - the campaign is a real winner. The campaign worked because it turns around a fantasy as if it were actually logical for the angel to fall.

References:

“Augmented Reality.” Wikipedia. Wikimedia

Foundation Inc, 17 Sep 2012.

Biela, Martin. Autofspace: Digital online

automotive campaigns. Autofspace, 08 May

2011.

Hui, Francisco Hui Francisco. PSFK. PSFK

Services, 05 Oct 2010.

“Lynx Excite Angels meet the public at

London Victoria.” Lynx Effect Blog. Lynx, 14

Mar 2011.

Parker, David. “Lynx Excite ‘fallen angel’ by

Tullo Marshall Warren.” Campaign: The

Work. Haymarket Haymarket Business Media,

15 Mar 2011.

“Volkswagen Fox: Twitter Zoom Campaign.”

Digital Buzz. N.p., 02 Mar 2011.

Lynx:Fallen Angel

http://www.flickr.com/photos/softestthing/

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Commerce

Making Loyalty

ProgramsWork

Loyalty programs rule our lives. They determine the airline we fly with. Sometimes even the schedule we take. They influence where we meet, drink coffee or have lunch. They determine the products we buy in supermarkets. They have the power to influence us to spend more than we need to on items that we would view as otherwise unnecessary. And they do this because companies understand that by giving their customers a membership number and a plastic card, they can seemingly satisfy people’s basic psychological aspirations and needs.

Providing these types of symbols work at a psychological level to target and trigger actions and behaviours that engender repeat purchase and advocacy. That is, they create loyalty. As much as all companies want to distinguish themselves with a uniquely branded loyalty program for their customers, the elements of each program are often indistinguishable. American Airlines launched the first air miles program in 1981 that seemingly every other airline has since copied; ditto with supermarkets, hotels, and cafés. It is hardly their fault as there are a limited number of elements that can be employed in their loyalty programs:

• Points: calculated by the amount a member spends• Levels: based on how much a member spends during a specific

period of time• Badges: awarded based on what level the member has reached.

It signifies, particularly to other people, the rewards and benefits the member receives

• Rewards: offers, discounts, and benefits that a member receives

Loyalty programs have undergone a transformation with a shift from only

rewards-based programs to well-designed, gamified structures created

based on models of motivation and of behaviour.

by Diarmaid ByrnePhoto Credit: Onigiri-kun

http://www.flickr.com/photos/onigiri_chang/

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In the last few years, these elements have been used by game designers to create environments that lead to longer-lasting and more in-depth participation, replicating the experience people have while playing traditional video games. This has become known as gamification. Game designers applied these elements to insights from psychology and motivation theories to create immersive and engaging experiences that ensure people continue to participate to a greater extent than in traditional loyalty programs. The best of these gamified loyalty programs not only add points, levels, and badges, but also combine great game designs with an understanding of behaviour and motivation theories. To understand why and how loyalty programs work it is important to understand how people behave. This is best done by looking at psychology models of motivation and behaviour.

From a perspective based on psychology, loyalty programs aim to drive behaviours of different types of participants, at specific times, based on triggers that the program provides. Loyalty programs draw on the work of Abraham Maslow and his Hierarchy of Needs. The purpose was to identify the basic types of human motivations and the order in which they generally progress. There are five needs:

• Physiological: air, food, water, sex, sleep• Safety: health, employment and financial security• Belonging: friendship, family, love, intimacy• Esteem: confidence, achievement, respect, self-esteem• Self-actualization: the desire to become everything that one is

capable of becoming

Maslow believed that these needs motivate people to act. Their behaviours are driven by their desire to satisfy their needs, starting with fundamental physiological and safety needs, to higher-level needs of achievement and self-esteem. Once the needs at each level are satisfied a person is motivated to satisfy needs at the next level.

Michael Wu notes that Dan Pink expanded on Maslow’s self-actualization needs in his book Drive: The Surprising Truth About What Motivates Us. His view is that once many of the basic levels of needs have been satisfied, people are more motivated by intrinsic motivators. Pink identified three needs that provide intrinsic motivation:

• Autonomy: people want to have control over their work• Mastery: people want to get better at what they do• Purpose: people want to be part of something that is bigger than

they are

Both Maslow’s Hierarchy of Needs and Dan Pink’s Three Intrinsic Motivators provide an explanation about why people are motivated to act. However, a loyalty program still needs to trigger desired behaviours at a specific time to ensure member participation.

The key to triggering behaviours is to make sure that loyalty programs work as intended. B.J. Fogg developed a behavioural model - Fogg’s

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Behavioural Model or FBM - to help designers and marketers ensure that all psychological elements are present to trigger behaviour. He posits that there are three factors with subcomponents that lead to certain behaviours:

• Motivation: pleasure / pain, hope / fear, social acceptance / rejection

• Ability: time, money, physical effort • Triggers: facilitator, spark, signal

Fogg argues that in order to trigger desired behaviours, all three factors need to converge at the same time. Thus, the loyalty program needs to be crafted in a way that these three factors occur at the same time. It must provide a trigger to initiate the behaviours it wants from its members. It then needs to ensure that they are motivated and have the ability to complete those behaviours. That is, the loyalty program should offer sufficient rewards to the person to be motivated enough to do the action, and the person should have the ability to complete the action.

Along with understanding motivation, designers of loyalty programs need to understand how their members would engage with the loyalty program. When conceptualizing a program, designers need to ensure it appeals to as many people as possible. Richard Bartle developed a simple player typology with four basic player types to understand the motivations that drive people to play:

• Achievers: people who are motivated to achieve points and other

rewards for the prestige of having them• Explorers: people who prefer to discover and learn about the

game, often at their own pace• Socializers: people who play for the social aspect rather than

the game itself• Killers: people who enjoy competing against others

By understanding that there are different types of players, designers and marketers are better able to ensure that aspects of the loyalty program appeal and motivate as broad a range of people as possible.

Loyalty programs are designed to meet the needs of people in a way that motivates them to behave in a specific manner. They need to be broad enough to attract different types of people, whether they are achievement orientated or socializers. When we apply Maslow’s Hierarchy of Needs, Dan Pink’s focus on factors that provide intrinsic motivation, Fogg’s Behavioural Model and Bartle’s player typology, we can see why loyalty programs are successful in motivating specific behaviours. Maslow and Pink explain what people need, and in order to satisfy these needs people are motivated into action. The belonging needs in Maslow’s Hierarchy correspond to the social aspect of participating in loyalty programs. The esteem needs correspond to status, achievements and leaderboards. In the case of Dan Pink’s three factors, mastery corresponds to points, progression and levels, and purpose corresponds to goals and targets. For loyalty programs to be successful, they need to meet these needs to motivate member behaviour. However, to trigger this behaviour, according to Fogg, the program’s mechanics must ensure that these three factors all occur at precisely the same time.

Credit: Dijle

By examining airline loyalty programs, it is possible to see how these apply insights from psychology and motivation theories. They appeal especially to Bartle’s achievers and killers typography. People are motivated to achieve a certain level of status from their membership program so that it satisfies their belonging and esteem needs. They are part of a (possibly) small percentage who are platinum members and who receive platinum-level benefits. As such, they also have the symbols to reflect this status - platinum membership card, dedicated check-in lane, lounge access.

Another example of a loyalty program that applies insights from psychology and motivation theories is Nike+. It is not a traditional loyalty program; in fact it gamifies running. However, by aligning with people’s goal - improving their athletic performance - Nike ensures it shares a common purpose with people. Nike helps them achieve their goal with their runners, clothing, and Nike+ apps, while increasing the switching costs from Nike to one of their competitors.

The Nike+ fitness tool uses game elements to encourage people to improve their fitness. A device is fitted into Nike runners and then synchs with an iPhone or iPod. Users can track their activities, performance - distance, time, pace, calories burned - and their progression, set challenges, and compete with their friends. They can post their run on Facebook and Path and hear real-time cheers for every comment or like they receive.

Nike+ has been extremely successful, and looking at how it works it is easy to see why. It appeals to all four of Bartle’s player typologies

by allowing people to interact in different ways with the tool: compete against others, work to achieve goals, meet other exercise enthusiasts, or work on fitness at their own pace. It also satisfies the safety, belonging and esteem needs of Maslow’s hierarchy, and the intrinsic motivators that Dan Pink identified. Nike+ also shows Fogg’s Behavioural Model in action: users have targets and challenges based on their ability and the app motivates them while running to achieve them, triggering behaviours.

Loyalty programs will evolve to being a constant partner in their members’ lives through smart phone apps, and not just thought of when queuing to purchase products in a store. Nike+ is one such example of where loyalty programs are heading. They will be gamified to create more engagement from members. To do this well they need to be cognizant of the psychology of motivation and behaviour. Loyalty programs will have a clear purpose that is shared by their members and they will help their members achieve it.

References

“Abraham Maslow.” Wikipedia, The Free Encyclopedia. 17 Sep 2012.

Wu, Michael. “Gamification 101: The Psychology of Motivation.”

Lithosphere. 03 Jan 2011.

Fogg, BJ. “Fogg’s Behavioural Model.” Online Posting to Twitter. Web.

30 Oct. 2012.

http://www.flickr.com/photos/dijle/

30

Kuliza

Never in the history of commerce has such a deluge of data been vaunted before an information-hungry, and social-savvy audience. Only a decade ago, CERN, a European research organization, set up one of the world’s largest databases with over 11.5 billion web pages. Today, the average supermarket has access to shopping data: stores that are at least twice as big, if not bigger in size.

When consumers use their credit cards at restaurants, clothing stores, or other retail businesses, those purchase choices are recorded and processed. Within the hour, businesses have the ability to unearth underlying consumption patterns that can be produced in real-time. In a matter of few hours, not only does the user behaviour trend become more evident, but also the correlation between people, events, locations, and preferences emerge from silhouettes to reveal a fairly clear picture of how marketing campaigns are performing. The availability

of such large amounts of actionable data is transforming the communications landscape and is also having a sibylline effect on the fabric of social commerce.

What is Big Data?

Wikipedia defines Big Data as “Datasets whose size is beyond the ability of typical database software tools to capture, store, manage, and analyze.” 2.5 quintillion bytes is the amount of data created every day. Although, this proliferation of data is an evidence of an increasingly prying world, it is possible for Big Data to positively impact social commerce. While most research into Big Data so far has focussed on addressing questions related to its volume, this article posits the case of the impact of Big Data on businesses with a special emphasis on social commerce. The article also examines the potential value that Big Data can create for organizations, and illustrate and quantify that value.

Commerce

Thinking Big DataBusinesses are leveraging big data and analyzing it to gain a stronger competitive position. This article looks at the significance of data and how it is used to conduct experiments to develop the next generation of products and services.

by Siddharth Balaravi

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In the old days most data problems could be solved as computing speed caught up. Now, there’s this deluge of new kinds of data which is growing faster than Moore’s law. We’ve basically broken what Moore’s law can cope with, and so we need a bunch of new technologies to get on the right side of that again…

en.wikipedia.org/wiki/Big_data

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Walmart Labs, Shopycat, and Big Commerce

In a bid to strengthen its commercial offerings, Walmart acquired Kosmix and its Social Genome in early 2011. The Social Genome organizes the Internet into topic pages allowing users to explore the Web by topic. This platform then works as a Big Data application that is capable of aggregating in-store, online, and social data and analyzing them to power a plethora of social commerce applications.

Walmart implemented this with Shopycat - a Facebook application that was designed to help shoppers identify better gifts for friends and family. Shopycat takes a person’s interests and Likes from Facebook and combines this information with information against a vast product catalogue to identify interesting gift options. For instance, if one has a friend that is known to quote Barnabus “Barney” Stinson, a fictional character from the CBS television series How I Met Your Mother, it is quite likely that Shopycat would suggest one pick costumes from the Star Wars films as an ideal gift for such a friend.

During the month long marketing campaign that Shopycat was tested, it performed an astonishing 42% goal conversion rate. About half of the users who used the app shared the promotion with their friends, and the virality garnered an incremental 25% lift in conversions. Moreover, the cost of user acquisition was $2.67, far less than the allocated campaign targets. Such results mark the success of such a program. Clearly, in the world of Big Data, success lies in connecting the dots in fundamentally new ways that resonate with people, brands, and social commerce.

Big data is here to stay as it offers a competitive advantage with a projected 60% increase in retailers’ operating margins. It provides statistics and insights into user and purchase behaviours which are key factors in influencing shopping behaviours. These datasets allow companies to test, experiment, analyze, and thereby help them implement appropriate social technologies and social shopping platforms.

References

“Big Data.” Wikipedia: The Free

Encyclopedia. Wikipedia Inc, 02 Sep 2012.

“Case Study: Walmart.” ifeelgoods.

ifeelgoods, n.d.

Kirsner, Scott. “Richard Dale splits from

Sigma to raise money for new VC firm, Big

Data Boston.” Boston.com. Boston Globe, 09

Aug 2012.

“What is Big Data.” IBM. IBM, n.d.

“World Wide Web.” Wikipedia: The Free

Encyclopedia. Wikipedia Inc, 07 Sep 2012.

The Value of Experimentation

The hype around Big Data stems from the fact that it eschews a fundamentally different type of decision-making: one that requires a fundamentally different mindset to the analyses of the data itself. Think of it as data-driven decision-making on steroids. However, far from the hype, foundational customization, constant experimentation, and breakthrough business models will be the new telltale signs of competition as companies capture and analyze vast volumes of data.

Using carefully crafted controlled experiments, marketers have the ability to test theories, hypotheses, and analyze results of business decisions in near real time. These have a striking resemblance to decisions made in hindsight as well as when experiencing one of those “I Wish I Knew” moments. Thus, experimentation can help marketers distinguish causation from correlation. This reduces the variability of outcomes while improving the overall probability that the performance of the control variable increases– sales, sign-ups, or any other goal.

Adaptive experimentation can take many forms. Leading online and consumer goods companies are test continuously. In some cases, they divide a small, but statistically significant portion of their web page views to conduct experiments that reveal factors that drive higher user engagement or greater conversions. In the world of web analytics, and digital media, this sort of experimentation is commonly known as A/B testing or Split testing. Similarly, companies selling physical goods also depend on experimentation to aid decisions, but Big Data can push this approach to a new level. For instance, McDonald’s has installed electronic devices that gather operational data in few of its retail outlets. These devices track and store details such as customer interactions, traffic in stores, ordering patterns, billing information, time of the day, etc. Statisticians can then use this data to model the correlation between variations in menus, restaurant designs, and training, among other things on the overall productivity and sales.

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Online commerce has come a long way in the last two decades. From an ancillary channel it has grown to a recognized method of doing business. E-commerce platforms today are being upgraded to next generation technologies to enable cross-channel selling, segmentation, personalization, enhanced search, better navigation and more. While the specifics may vary, each optimization has the same goal: to maximize potential revenue through improved user experience.

The basics of doing business, however, remain the same. Customer trust and loyalty remain vital to businesses. While technology is upgraded to the back-end every few years to maintain infrastructure, it is user experience (not from a design perspective alone) that is key to their survival. The line between online and offline sales has blurred and many companies have dropped the ‘e’ altogether. As a result, crossing channels is now the leading driver for revenue.

The majority of commerce portals online seek to drive traffic by using price as the prime motivator, but have enjoyed limited success. Moreover, they have failed to create long term user loyalty. There is no denying that price is the first consideration for a lot of purchases, especially when it comes to products that are expensive and have a short-term product cycle – like air tickets. However, if one is looking to buying something that lasts longer, which can include an expansive range of things from books to curios to refrigerators, there are a plethora of e-stores to choose from. What then is the factor that drives the platform chosen by customers?

Trendwatching.com recently reported that a lot of consumers no longer only look at the cost or the convenience of online shopping. Just as with brand retail outlets, they do not mind shelling out a few extra dollars for a product, if they trust the store they are buying it from. While gaining this trust is not really easy, some brands have made a headway

ExperienceShopping

The primary objective of the online marketer today is to drive loyalty by providing the best possible shopping experiences – ones that steer customers to come back for more. This article looks at experiences modern e-commerce sites offer.

by Anish DasguptaPhoto Credit: Sidewalk Flying

Commerce

http://www.flickr.com/photos/sidewalk_flying/

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References

Chu, Julian. “The Ultimate Online Shopping

Experience, Part 1: Strategy and Design.”

E-Commerce Times 10 Dec 2008.

Gerejo, Lyndon. “Improving The Online

Shopping Experience, Part 1: Getting

Customers To Your Products.” Smashing

Magazine. 15 Sep 2011.

Lynch, Liz. “The Rise of Curated Shopping.”

The Relevant Marketer. e-Dialog, 18 Aug

2011.

“May 2012 Trend Briefing: Retail Revolution.”

Trendwatching.com. n.d. 08 Sep 2012.

and leveraged strategies and ideas based on these insights.

Shopping is about discovery

An objective of shopping is to “wow” oneself. Therefore every shopping experience has a lot to do with discovering. A lot of people walk into curio and handicraft stores without the express purpose of buying anything in particular. They go in, browse through the merchandise, and if something catches their eye, they buy it.

OpenSky is an e-store that provides deals on products hand-picked by experts in fashion, health, food, and design. They promise to deliver “What you were looking for, before you started looking.” Their Pinterest-like interface features product shots with brief descriptive titles without brand names – just like one would come across in a curio shop.

Discovery begins fundamentally at figuring out products and services. It elevates to levels of building associations with the brand. Loyalty cards, offers, discounts are some ways to discover more about a brand and also about people’s behaviours. The elevation then is also about discovering loyalties, shopping patterns, and enthusiasm towards specific brands not from the perspective alone of a seller but consumers themselves.

Products have a story to tell

Many products have a story in their creation, while some others gain significance post-sale. In both cases, it is the story that the customer can tell when talking about the product. For instance, a hand-crafted artifact may have originated from a particular tribe in New Guinea and the story of its origins may be of interest. Or the proceeds from the sales of a particular product are donated to a cause.

People are becoming increasingly socially aware, and so it is important to them that what they buy in some way contributes to a cause.

Sevenly.org is a clothing store that dubs itself as an Organic Funding Movement and “the world’s most effective cause activation platform leading a generation toward intentional generosity”. Each week they choose a charity or cause to donate to, an associated NGO, and set a target amount they want to donate. A part of the proceeds from each sale they make that week are then set aside for donation. A counter on the website tells users how far they are from reaching the target amount.

Shoppers are choosy about who they accept advice from

People often turn to their most trusted friends when seeking advice on making purchases. They choose who to ask for advice based on their knowledge of the friend’s interests, tastes, and choices in other purchases. Decision-making assistance has been a huge point of focus for e-commerce sites with tools and apps to recommend products. However, these are based on past purchases, which is big drawback when it comes to drawing first-time customers. Brand owners are hiring curators for various categories in an attempt to solve this problem. Curators analyze the vast amount of data- professional, personal details, likes, hobbies and other interests of consumers.

AhaLife is a shopping portal that promotes its curators more than the products they sell. Each curator has a dedicated page complete with bios that establish expertise in their respective areas. Users can get product details, and also the curator’s views and reasons for a product chosen, and what makes it stand out. Taking it one step ahead, they are now organizing live meet-ups in major cities where consumers can personally meet curators and designers.

Credit: Rob Ellis

Credit: Susan NYC

Reading about product utility is not sufficient

If a consumer is investing in technology with the intention of upgrading from an existing device, product utility is not one’s focus. In such a case product specifications are sufficient to make a decision. Conversely in the category of beauty products no matter how much one reads about those products, sees them or is persuaded by the women in branded uniforms, it is not the same as experiencing those products.

Shopping is about taking a break

Going shopping is a way to relieve stress, the same way that coffee breaks are used. It helps one ease up for a while. People

often drop in nearby stores during a break to browse, discover brands, and make few impulse purchases. The intention is not buying out of need, but to do an activity that would brighten up one’s busy day.

To make the experience worthwhile, commerce sites make shopping a “break-like” activity through videos of product demonstrations and sales pitches. This is based on the premise that while taking a break people watch videos, surf the net, or check updates on social networking sites.Joyus, a commerce portal that specializes in beauty products for women, has implemented an entire video-culture. The website is video-led with product demonstrations and make-up how-to’s. Customers who visit the site while taking a coffee break at work can watch videos on new products, brands, and usage tips.

http://www.flickr.com/photos/robellisphotography/

http://www.flickr.com/photos/en321/

36 37


Obsolence

The traditional purchase funnel that drove advertising and marketing strategies, tactics, and budgets is obsolete. No longer can companies rely on targeting as many people as possible, knowing that a percentage of them will filter down the funnel and ultimately purchase the product. What has changed is that the consumer - and fans in particular - is now a larger influencer on purchase decisions than advertisers. It is more important for brands to focus on the consumer generated ‘megaphone’ than solely on the purchase funnel, and evolve ways for their customers and fans to advocate products and services.

The Consumer Generated Funnel

Word of Mouth Marketing Forecast 2003 – 2013

2003: $313m2004: $487m2005: $722m 2006: $981m2007: $1351m2008: $1543m2009: $1701m2010: $1918m2011: $2204m2012: $2572m2013: $3043m

Sentiment expressed by word-of-mouth marketing:

66% of brand-related conversations are mostly positive8% of brand-related conversations are mostly negative

The driving forces of purchase decisions:

54% word-of-mouth47% information on a website42% email sent by a friend31% online reviews

Commerce

by Diarmaid ByrneIllustration Credit: Amit Mirchandani

References

Conroy, Pat, and Anupam Narula. “A new

breed of brand advocates: Social networking

redefines consumer engagement.” Deloitte

Development LLC, n.d. Web. 15 Oct 2012.

Jackie, Huba. “14 new statistics about word of

mouth marketing.” Church of Customer. N.p.,

17 2011.

“Word-of-Mouth Spending to Reach $3

Billion by 2013.” Marketing Charts. PQ Media,

07 2009.

“Consumers Believe in Positive Word-of-

Mouth.” eMarketer 02 12 2010.

Credibility of advocates:

59% of Americans believe offline WOM to be highly credible49% of Americans believe online WOM to be highly credible

Compared to negative WOM, positive WOM is more than twice as likely to get people to seek further information.

Less than 50% of respondents deem negative WOM as credible

Main activities of brand advocates:

1. Recommending verbally

2. Payingmore for this than

other brands

3. Purchasing favorite brand

multiple times when on sale

4. Sharing the product /

coupons with others

5. Searching for coupons in

store circulars

6. Searching for special offer

coupons online

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Ethics andSocial Commerce

The rise of commerce has always been tightly aligned with certain mutually beneficial, economic principles for the buyer as well as the seller: whether it is the barter system where two parties exchanged goods and services with equal perceptible value or whether it is the money economy, where paper was assigned legal tender status. In each epoch, commerce has flourished only when there has been the approval of two or more parties based on a code of ethics that has governed the transaction. Today, commerce is moving in the direction of social commerce, an exciting phenomenon to watch out for.

Social commerce is the latest buzz in consumer industries. Strategy Consultants, Booz & Co., estimates the global market value of social commerce to be about $9 billion in 2013, growing to $30 billion by 2015. Such figures are high enough to lure anyone who has something to sell, want to jump into the bandwagon. The mature ecosystem of social networks provided by Facebook, Pinterest, and Twitter along with the equally potent e-commerce platforms of Amazon, EBay, and PayPal, make it possible to unleash the potential of social commerce to an unprecedented degree.

Social commerce after all makes total sense. Everyone appreciates the inputs of friends and family in major purchase decisions. From buying a shirt to booking an apartment, people in one’s network have a key role to play in the decision making process. This so-far-known-but-invisible hand of influence is what social commerce seeks to make visible, tap in on an ongoing basis and of course, monetize.

Communities

Social actions are a core part of shopping online and the resulting social data is eagerly collected and leveraged by companies. Social commerce, thus, needs to be cognizant of the ethical issues in order to continue to attract customers in the future.

by Saswati Saha MitraIllustration Credit: Anindya Kundu

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diversity is not Pinterest’s forte or even in its interest. When $80 is the average amount for purchases initiated by the site, Pinterest is clearly not for all. It has its own brand image to live up to. Brands participating in Pinterest know this. Companies are rapidly developing innovative engagement strategies, integrating the Pin It button across all web spaces they can exist on, from networking sites to search engines. Brands offer new visual stimuli everyday and provide a 2% reward of the selling price to the purchase enabler in a service similar to Fancy. This is a very high degree of personalized and networked pressure working on you to make you buy.

An essential part of any commercial relation is honesty. Both parties have to be honest to the product as well as the transaction for it to be a success. In most e-commerce networks seller reputation and peer review are instrumental in helping new buyers reach their decisions; be it the small, local players such as Zalando, MouthShut or giants

such as Amazon and EBay.

Detailed reviews are much appreciated. Skepticism and suspicion are bound to surface towards extreme reactions. Some social commerce discussion forums regularly reveal the unreliability of such ratings and reviews. Sellers on Amazon are known to offer buyers discounts to remove negative comments, thereby keeping their overall ratings high. This may be improved customer relationship management but it can also be interpreted as buying the buyer’s silence. To bring in transparency social commerce platforms today have a lot to achieve. It is essential

consumers are provided platforms to express their thoughts without brands attempting backend tweaking or influencing. Also, there is a need for curation of quality reviews, prohibition of fake profiles from sellers or their competitors from skewing the nature of feedback.

The social network culture of grabbing user data is one of the biggest challenges to the growth of social commerce. The motive is to offer better customer experiences but at the cost of sharing personal data. Every Facebook app that one uses, asks for unanimous access to personal information. The Apple App store requires one to release one’s credit card data. New e-commerce sites request log-ins via Facebook or Twitter giving them access to one’s networks, contacts and other relevant social data.

The cautious say there is no apparent need for all this data but people

The rise of commerce has always been tightly aligned with certain mutually beneficial, economic principles for the buyer as well as the seller: whether it is the barter system in which two parties exchanged goods and services with equal perceptible value or whether it is the money economy, that assigns legal tender status to paper. In each epoch, commerce has flourished only when there has been the approval of two or more parties based on a code of ethics that has governed the transaction. Today, commerce is moving in the direction of social commerce, an exciting phenomenon to watch out for.

Social commerce is the latest buzz in consumer industries. Strategy Consultants, Booz & Co., estimates the global market value of social commerce to be about $9 billion in 2013, growing to $30 billion by 2015. Such figures are high enough to lure anyone who has something to sell, want to jump into the bandwagon. The mature ecosystem of social networks provided by Facebook, Pinterest, and Twitter along with the equally potent e-commerce platforms of Amazon, EBay, and PayPal, make it possible to unleash the potential of social commerce to an unprecedented degree.

Social commerce after all makes total sense. Everyone appreciates the inputs of friends and family in major purchase decisions. From buying a shirt to booking an apartment, people in one’s network have a key role to play in the decision making process. This so-far-known-but-invisible hand of influence is what social commerce seeks to make visible, tap in on an ongoing basis and of course, monetize. Social commerce is new. It only seems right to help consumers understand the rules of the game before they become a core part of it. Based on what is on offer, one has to negotiate to arrive at the right juncture which will enable this new format to succeed. So how is business being done socially?

Consumers navigate through a burgeoning amount of influencing data. Peer influence, creating groups for mutual ‘benefit’ and unlimited recommendations and advices form the nucleus of social commerce. People leave on unlimited number of platforms an indelible track of invaluable personal and financial data.

Each of these platforms has a unique appeal. Visual analysis of Pinterest shows how the perfect world is soft, cute, homely and tailored. Members have the ability to create their own boards but real

People leave on unlimited number

of platforms an indelible track of

invaluable personal and financial data.


42 43


Left: George Washington on the $1 bill

Credit: Peasap

have been convinced that who they are socially, is who they are really and knowing that will help serve them better.

Assuming that social networkers and shoppers are generous enough to gift all their data to the cause of consumer analysis, the risk of the data falling into wrong hands is a primary concern.

A recent article by Mat Honan on Wired reveals how critically connected all our internet presence is and how easy it is for those with wrong intentions to take over someone’s complete online and offline identity. A hijacked Facebook account is one thing but a hijacked bank account is life threatening. In the future, the two will be interconnected.

So is social commerce unethical? Visible examples from current high traffic platforms are enough to raise warning signals among the discerning. The segment is nascent; therefore it is easier to innovate on its processes to emerge as transparent, consumer friendly and ethical in its commitment to consumers in the longer term. Some key issues that need to be redressed include managing the consumption cycle, establishing transparency in peer recommendation, and allowing consumers to take charge of their data.

In 2012, Target came under serious criticism for its acute consumer analytics which could predict pregnancy even before the information was made public by the person concerned. This should tell consumers that industry analytics today are sophisticated enough to predict a lot about users. Instead of using the data to single-mindedly drive purchase behaviour, brands that will use consumer data responsibly to moderate the consumption cycle and only push for purchase at necessary intervals, will gain significant consumer-trust. Instead of the Pinterest model of “everything is so beautiful”, a balanced model of need and purchasing power, adjusted recommendations will help bring out the more democratic and humane side of social commerce.

Peer recommendation in the age of Facebook has been quite voluminous. One likes Zara, so one recommends friends to like Zara. One wants to network on Glassdoor, so invites others too. Such expansive peer recommendation must change if social commerce is to be meaningful and succeed in the long run. Using smart analytics and filters, social networks will now need to enable their users to recommend in a more intelligent fashion. After all, we do know what our friends really like. So, instead of disturbing every single one of them with everything and nothing, it is the users themselves, if adequately enabled, who can help brands become even more focused in reaching their target consumer base.

Users are quite surprised by the long-tail effect of their data on the internet. Not many are aware that Facebook has the permission to share data even after profiles have been deleted. One of the crucial factors that most social companies need to be held responsible for is their terms and conditions. The miniscule sized writing and unending pages of conditions are reasons enough for even the most careful

of users to decide to skip and agree to anything in their rush to experience the service. Such conditions are critical when there is a commercial angle associated with it. Brands that will cut through the chaff and seek permissions to use and share specific data from their consumers, in simple and comprehensible terms, will not only enable the consumer to be in better charge of their data but will themselves emerge as highly transparent business practices. This is an enviable positioning that most companies ought to strive for.

Jimmy Wales, the founder of Wikipedia once said, “Commerce is fine. Advertising is not evil. But it doesn’t belong here. Not in Wikipedia.” On similar lines, social commerce is fine. Advertising is also welcome in social commerce but unethical behaviour does not belong here. Ethics are a crucial factor in shaping brand loyalty. The terms and conditions set with consumers today will shape the future of social commerce. Martin Lindstorm in Buyology, analyzed mirror neurons and cautioned consumers that the next generation of marketing strategies will vie not for consumers’ sight but directly for their brain and via their most trusted peers. At a time when both the radical and the emotional side of consumers are targeted, consumers have the right to demand utmost ethical behaviour from their favourite brands.

References

Duhigg, Charles. “How Companies Learn Your Secrets.” The New York

Times Magazine 16 02 2012.

Honan, Mat. “How Apple and Amazon Security Flaws Led to My Epic

Hacking.”. Wired, 06 08 2012.

Lindstorm, Martin. Buyology: Truth and Lies About Why We Buy. Crown

Business, 2008.

“Turning “Like” to “Buy” ”: Social Media Emerges as a Commerce

Channel.”. Booz & Co., 17 04 2011.

“Social commerce statistics.”. Bazaar Voice, n.d. Web.

http://www.flickr.com/photos/peasap/

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Do you remember the heavy metal band Anthrax? The lead guitarist Dan Spitz left in 1995 because he was “severely disinterested in playing the guitar”. He is now a watchmaker, and claims that it is an unending skill to learn. Antonio Banderas, Sir Cliff Richard, and Sting all make their own wine. Even US President Obama makes his own beer, the Whitehouse Brew. Well, he instructs and pays for it at the least.

There are plenty of regular people who grow fruits and vegetables on their own, raise chickens, and keep their own bees. Others are buying them from farmers’ markets instead of supermarkets. Some have even made it their business: The Mast Brothers craft delicate chocolate by hand and Makers and Brothers sell beautifully designed objects for everyday use.

Even education is becoming DIY. Online websites such as Coursera, Duo-Lingo, Khan Academy, and Audacity offer free

courses. ‘Classes’ are online videos or multiple-choice questions. Discussions, tests, and assessments ensue. Certificates are sometimes awarded; other learning happens for the purpose of learning itself.

Mike Doherty, in his article, ‘The Story Behind the Stuff: Consumers’ Growing Interest in ‘Real’ Products’, says “There is a powerful urge to get in touch with what they believe is a more ‘real’ world, and it’s leading us to a place where signs of realness take on greater value”. He thinks that this movement is bigger and more lasting than the usual trend and counter-trend shifts that we see. He also mentions Melanie Howard’s Future Foundation reports that indicate that many consumers are also seeking the “simplification of complexity which is about the urge people feel to get in touch with what they believe to be a more real world.”

Doherty gives the example of Icebreaker Merino Garments that come with a ‘baacode’

Communities

The MakerMovementThe DIY movement has come to encompass broader skill sets, defining a whole new philosophy and appreciation of self-sustaining forms of living.

by Payal Shah

to allow customers to trace the merino wool in their garment back to its source in New Zealand. Customers can see how the sheep live, read about their growers, and follow production through to the finished garment. Similarly, wooden cutting boards from Banbury are proving very popular in Ireland. Each cutting board has a number that customers can enter into the website to get a full history of the tree that the cutting board is made from, where it grew, what the environment was, and how many other cutting boards were made out of the same tree.

We live in a world of the instant. There is more ready-made, processed food in our supermarkets than fresh food. Fresh food takes work. Factories do that work for us; from coffee to pre-cooked vegetables, almost anything can be bought ready-to-consume. In the 1960s, everything started becoming instant. Women were slowly starting to enter workplaces and this left them with less time to spend on planning and doing household chores and cooking. Time became scarce. This meant that the easier and less time consuming something was, the better. Thus began the advent of instant food. But in a world of manufactured clones and standardisation, quirky, handmade and exclusive is good. Slowly, instead of just accepting ready things, we take the time to understand where things come from and how they become what they are.

The DIY movement is an adverse reaction to the instant movement, a sort of a reverse consumerism. People have become tired of buying the same old mass produced goods manufactured by corporates giants. The movement started small in the early 1980s in England, influenced by the DIY philosophy of the punk movement. Its popularity rose in response to economic downturns, such as during the early 1990s. The volatile economy of the subprime crisis has accelerated the movement by urging, if not forcing, people into being more frugal and self-sustaining. It also acts as a rejection of the mass-consumption of the boom years in the 2000s. People have become more interested in how to do things themselves, understand where

Top: Mast Brothers Chocolate

Above: Merino Garments

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Kuliza

food and materials come from, their impact on the planet, and produce products to a higher quality than large conglomerates do, even if it is at a smaller scale. They end up being better designed, unique, and more personal. People are unmistakably innovating and evolving personally with the thought: “if I do it, I will do it better”. Is it a small attempt to control our lives and the exact way we want them, and not controlled by consumerism.

People take pride in understanding how products work, crafting them from scratch, and knowing that their development is under their control, even though there is so much else in life that is out of their control. This is a shift to a more holistic lifestyle that provides some meaning. Doherty opines that gardening and knitting, as holistic activities, have been on the rise for the last ten years. People are seeking to create deeper and more meaningful experiences. This is why both online and offline communities like Brooklyn Brainery, Kick Table (which has unfortunately closed down) and Maker Faires work so well. The image is almost that of reverse avant-gardism, yet is still avant-garde. It is a dynamic culture that is going back to basics, minimalism, and self-sufficiency.

“Right now, we all crave authenticity” says Kurt Andersen in his article ‘You Say you want a Devolution?’ in Vanity Fair. He talks about how few things have changed in the last 20 years - clothes, music, T.V. shows, architecture, hair styles. Everything has not evolved as it did decade after decade before the 1980s. He believes this is happening as an “unconscious collective reaction to all the profound nonstop newness we’re experiencing on the tech and geopolitical and economic fronts.” As the world moves technologically forward at lightening speeds and deals with changes of all kinds, we cling as hard as we can to familiar things so we have control over something.

References

Andersen, Kurt. “You Say You Want a

Devolution?.” Vanity Fair. Jan 2012.

Doherty, Mike. “The Story Behind The Stuff:

Consumers’ Growing Interest In “Real”

Products.” Fast Company. 18 Oct2012.

Farrier, John. “The Lead Guitarist for Anthrax

Is Now a Master Watchmaker.” Neatorama. 07

Sep 2012.

Kass, Sam. “Ale to the Chief: White House

Beer Recipe.” The White House Blog. The

White House, 01 Sep 2012.

Wright, John. “Barack Obama’s beer: White

House to brew house.” Word of Mouth Blog.

The Guardian, 24 Sep 2012.

“Cheers! Celebs Who Make Their Own

Wine!.” Posh24. N.p., 09 2011. Web. 20 Oct

2012.

Right: ‘I think therefore I am’

by Barbera Kruger

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A look at collaborative consumption, a phenomenon that is challenging current methods of consumption and is defining new ways of living.

by Kaushal Sarda

Collaborative Consumption

Social networks, location technologies, and rise in mobile communication are driving a reinvention of activities like sharing, bartering, lending, trading, renting, gifting, and swapping. These changes are driving consumption towards peer-peer exchange amongst people as opposed to ownership. New examples of this behaviour are popping up every day across the world in various contexts like unused spaces, goods, skills, money, energy, and general services.

Understanding Collaborative Consumption

Drivers of Collaborative Consumption• A renewed belief in the power of communities • Success of peer-peer social systems and real-time technologies • Global recession that has challenged the prevalent consumption

driven lifestyle • Growing concern in relation to unresolved environmental issues

Systems that are powering collaborative consumption• Product service systems: Systems that allow people to pay for

the benefits of access to a product rather than owning it • Collaborative lifestyle: Systems that allow people to mutually

benefit by sharing personal resources like skill, space, money, and power

• Redistribution markets: Market places that help stretch the life of a product and in turn reduce waist

Trends that support collaborative consumption• Rise of distributed structures: 16 of the top 100 bestseller books

were self-published and made available via Kindle. This marks the shift in power from established, controlled structures to distributed structures such as market places and funding. Kickstarter is now the largest backer of creative projects on the planet.

• Reputation economy: The rise of identity brokers offers trust or reputation scores for people on distributed market places. These trust scores act as the backbone for peer-peer exchanges

Communities

Communities

ZipCarSystem: Product Service System

Category: Transport

About: Zipcar is an American membership-based car-sharing

company. Zipcar members have automated access to Zipcars by

using an access card that works with the car’s technology to unlock

the door. It also offers an iPhone and an Android application that allow

members to ‘honk’ in order to locate a Zipcar and unlock its doors.

Share Some Sugar System: Product Service System

Category: Home, Living

About: An online service that helps one find someone in a

neighbourhood or a group of friends who is willing to lend or rent

something one needs.

ColoftSystem: Collaborative Lifestyle

Category: Co-working

About: Coloft is a shared work space in Santa Monica that creates

a sense of community and excitement amongst like-minded people.

It empowers working professionals such as entrepreneurs, start-

ups, freelancers, programmers, and designers by providing space

and office facilities.

AirbnbSystem: Collaborative Lifestyle

Category: Travel & Living

About: Airbnb is an online service that matches people seeking

vacation rentals and other short-term accommodations with those

who rent-out rooms. Listings include private rooms, apartments,

castles, boats, manors, tree houses, teepees, igloos, private islands,

and other properties.

GazelleSystem: Redistribution Markets

Category: Electronic Recycling

About: Gazelle is a fast-growing website that has

created a marketplace for people who want an

alternatives to disposing electronic devices that were

once expensive possessions.

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Communities

A few years ago, while doing field research in parts of rural Maharashtra, I realized the importance of keeping my eyes open. A family of five wove bamboo baskets and sold them at the local market and had two mobile phones. One was used as a landline, the other as a mobile phone. The ‘landline’ was kept constantly on charge due to frequent power cuts and hung low from the plug point. This is a common pattern I recognized through my visits to many houses in the village. This simple image gave rise to many cultural, ergonomic and design challenges in my head. It had a defined space as a landline, was a shrine to technology and something for neighbours to come, see, and use. Its mobility was not taken advantage of, its potential hazards, increased expenses through unintended calls by children illustrated the need for a serious upheaval of charger designs. One of which is providing space for the phone to rest while it charges.

For any problem, working on the pattern of cause-effect-solution is the most common

one people take up. Similarly, it becomes critical to discern that these behaviours are parts of a pattern, even if in outliers.

Understanding the pulse of a country, what citizens are passionate about, the things they care about become important. Identifying these is what large businesses spend millions of dollars on. It is the starting point of all great if not successful ideas.

Most organizations value leaders who have a vision. Business decisions are often based on predictions – of time, people, behaviours, resources, economies, amongst others. But, these predictions are well, predictions, and there are no sure ways to future-proof ideas.

The idea of keeping one’s eyes open for what is happening in an attempt to understand patterns in behaviours, people, resources, economies, is not new. People are constantly engaged in identifying these. Be it the stock market, the weather or fashion; the last

Communities

Learning by Keeping your Eyes OpenIdentifying trends, fads, and patterns in behaviours through a socio-cultural perspective is key to understanding users’ needs. How these are determined in terms of relevance and impact is important to businesses.

by Nehal Shah Photo Credit: Not Another Dinosaur

decade has seen the idea evolve into a process – as scientific as research can get. When there is a pattern, one can almost always predict its path.

Trendspotting is often confused with fads and fashion. But the concept of trendspotting is recognizing patterns in their evolution. They could be nascent, be just ideas or thoughts, may become a fad, bring in a behavioural trend, initiate a consumer or lifestyle change, cause a social shift or spark a generational trend even. It is essential to not only identify patterns but also map where they fall on the evolution continuum. On the other hand, a fad is usually something that has a very short life span, affects a few industries but has very high, almost peaking interest. For example, a few years ago there was an obsession with Crocs, the not-so-pretty shoes made of a surprisingly sturdy material called Croslite. It started very small until most people owned either a pair of Crocs or a cheap fake version. In contrast to a fad, a trend is often a complex,

socio-cultural phenomenon that scans lifestyles at a particular point in time. While it would not be right to consider Apple’s iPad as a trend, it is actually the concept of gestural multi-point devices that brings the world to our fingertips, which definitely is a trend.

It would be interesting to note why Psy’s Gangnam Style video became such a rage last month. In his article ‘Gangam Style, Dissected’ in the Atlantic, Max Fisher dissects the mise-en-scène to understand the subversive message of this Korean music video. The kind of social stimuli that it presents and the number of people that have paid attention to the song is incredible. It creates a commentary on contemporary Korean life and styles. Such videos become a starting point to understand social shifts and the pulse of the nation, which could then snowball, or trickle down to the design of new products and services or simply die out.

All fads, trends, social shifts and generational

changes have life spans. While technology and new media trends have the shortest span, fashion comes next, design and consumer trends soon after, and cultural and generational changes being ones with the highest term. But as people with day jobs, keeping track of these can get exhausting.

Today, technology and Social Media makes this much easier. Crowdsourcing ideas help identify trends. Dell’s IdeaStorm site is an example of how a company uses a website as a tool to gauge what ideas are important and relevant to the user. A detailed analysis of what people are asking for, reveal what matters most to them. One is then likely to create a product or a service that satisfies latent needs.

One now has a pile of data, sourced from different areas - looking at magazines, conversing with people, reading research reports, tracking newspapers, watching commercials, deconstructing people’s

http://notanotherdinosaur.com

52 53


Article photo, previous page: A Timeline for

Trends and Technology

Credits: Richard Watson at Nowandnext.com,

Benjamin Frazer at Snap, Oliver Freeman,

Mike Jackson and Scott Martin

Not Another Dinosaur

Left: Moodboarding

Credit: lolololori

TrendsMap is a better looking engine for real-time Twitter trends that one can filter through proximity or/ and topic. CassandraDaily, is a site for the lazy trendspotter. It collects stories and inspirations and categorizes them into themes. Each theme is supported by live manifestations of the trend. Similarly, for some more focused Indian content, JWT Intelligence produces reports and collects data on trends therefore “...converting cultural shifts into opportunities,” is appropriately their tagline. Springwise is a great resource for innovators and early adopters looking to tap early into a trend. It has informative listings of new and upcoming products and services.

Tracking these help put knowledge into perspective. They provide a framework or a lens through which one would base future decisions. They work across domains and departments, help lead projects, businesses, and organisations in appropriate, valuable directions, and stay ahead of the curve.

fashion sense on the street, and more. Each one is probably suggesting a different trend.

There are a few simple analysis techniques that can help consolidate this information without distilling it. The easiest is to create moodboards by observing the stimuli until patterns emerge. If there is no “The Beautiful Mind” moment happening, one could try and categorize observations into different, non-obvious buckets. Alternatively it is possible to use a moodboard to achieve and communicate this clarity. Anybody who has a “Pin It” applet on the bookmarks bar would already know quite a bit about moodboarding.

These moodboards or themes can be grand, slightly zoomed out trends, and can be applied to any product or service or thought, across any domain. A set of metrics can be used to determine impact, relevance, and uptake of these trends on businesses. The process then is- evaluate, track, and predict it.

While moodboarding and the smell of Fevicol take one back to craft class, it is the very nature of childlike curiosity that makes trendspotting fun. If the smell of Fevicol makes one gag, there is always an app for that; websites in this case: WhatTheTrend collates popular hash tags from Twitter.

Top left: Psy’s Gangnam Style Video

Credit: Starcasm

Top right, 100 things to watch out for in 2012

Credit: JWT Intelligence

http://notanotherdinosaur.com

http://www.flickr.com/photos/lolololori/2343992441/sizes/l/in/photostream/

http://starcasm.net/

http://www.jwtintelligence.com/2012-and-beyond/

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