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The state of social commerce – and how fab.com is ahead of the game
I got some time over the weekend to check out one of the better social commerce applications I’ve seen. That’s about halfway down this blog post. But before that – a brief comment on the state of social commerce in Australia.
Often, when I tell people the space I work in, I find I still get puzzled looks. Most everyday people haven’t quite made the connection between social media and ecommerce, and instead associate the concept of social commerce with group buying sites like Groupon, where deals bought online are only activated via collective buying power.
To clarify, true social commerce is about being able to tap into reams of data about a users behavior online and to be able to provide them with deeply engaging experiences that results in some kind of actual transaction. This is in stark contradiction In everyday real life interactions, we call this: providing context. Through my many conversations with all different types of people everyday, my brain categorises each person and conversation, and files it away for another time. It’s how we make small talk relevant when we meet new people, how we recommend products and services by word of mouth, and when we listen to the recommendations of others, it’s how we discover new things.
In social commerce we often talk about two types of transactions:
- Social transactions
- Commercial transactions
Commercial transactions are the obvious ones. Business people, Community Managers, Marketing people and others are all spending inordinate amounts of time on both proprietary and popular social networks (ie Facebook, Twitter etc) building relationships with customers and other types of stakeholders, but ultimately what they’re all after is an impact to their bottom line: more customers and more transactions. Current social media haven’t quite mastered how to do that seamlessly yet.
Social transactions on the other hand are not as impactful to the bottom line, but can be just as important in achieving that. A social transaction is the positive experience someone has when they interact with a brand, product, service or community. It provides an intrinsic reward to the person, who derives satisfaction from the experience or interaction. Similar to commercial transactions, everyday people as well as the brands that seek to serve them are hoping to discover new, relevant and meaningful relationships via their ongoing interactions online.
If you can put the two together in one space then you’re on to something, and that is the current battleground of social commerce that most people have not encountered yet.
A practical aspect of this is being able to master ‘big data’. At a recent conference I heard Mark Britt from Ninemsn recount what he says when his digital sales people ask him for career advice – his advice for young salespeople, soon to be out of a job in an era of true social commerce – was to either figure out how to drive advertisers to be really imaginative and creative, or figure out how to leverage big data. That’s a huge statement for the head of an advertising based publisher to acknowledge. It’s quite apt though, if IBM’s claim that 90% of the world’s data was created in the last two years is true.
Big data – if we can figure out how to leverage it properly – enables us to know more about a customer or potential customers likes, dislikes, desires, motivations and needs than ever before. Not in a creepy way either – but in a way that provides timely, contextual relevance to a human being at the other end who just wants a meaningful interaction with the world around them.
So let’s take a look at an example I’ve been watching for a while now.
Fab.com is one of the latest darlings in the social media startup world, and as it turns out they were always about social commerce and no one really noticed. They’ve taken a niche position, providing artists and designers with a place to sell high end designwares to fab.com subscribers. It’s kind of like an offers based Etsy.com in some ways. It’s not about group buying, it just about a community of people who love design, interacting with, commenting on, and buying items they love.
As one of many sites to adopt a notice-board style of visual design following on from Pinterest’s success with the model, Fab/com introduced their social shopping feed in mid-January.
The live feed is a fantastic application of true social commerce. In it, you see the visual notices of items for sale, of tweets that other people have posted about the site, and other social objects that can be liked, favourited, and of course purchased if it is a sale item.
Over time, as you start to interact more and more with the items for sale, you start to build an interest graph – of the types of items and designs that you like. This is all socially sharable to your Facebook timeline, so that others can see what you’re buying via the site, and then start to interact with you on the site itself.
What I expect to happen next (no word from fab.com yet but I can see where they’re going) is that the live feed will start to pick up on similarities between your interests and other people similar to you. This is where big data comes into play. Providing recommendations of products and designs people might like is based on real-time evaluation of yours and others’ interest graph to assess what interest you have in common, and where new designs or other items for sale might be of interest to you.
I also love that they’ve inbuilt a ‘social shopping’ rewards program that gives anyone who activates Facebook integration a $10 credit for use on the site. Highly unusual to see Facebook integration being incentivised by a publisher, but to me it indicates what’s likely to be a longer term plan to leverage the extended social graph that Facebook brings to the party, while still using a standalone site to drive recommendations and transactions.
While I’m not hugely passionate about design, I love the concept and love the personalization that social commerce can bring to an industry vertical like this. There are so many industry verticals and segments that this kind of social commerce can be applied to.
It gathers a community of people passionate about the content and extracts meaningful social interactions between buyers and sellers, buyers and publisher, sellers and publisher. That makes it a win-win-win, and when the social shopping feed starts to deliver relevance to the user everytime, then the social environment in which people interact is only what they make of it – literally. That sounds like the kind of community I’d want to interact and transact in, anyday.
For those of you more familiar with the social commerce efforts of bigger players like Groupon, they’ve been busily trying to make headway in this space, with 3 of their most recent business acquisitions (Mertado, Adku, Campfire Labs) all being firms focused on better understanding and extracting value from the social graph. Mertado, in fact was purely focused on product discovery via the social graph (similar to what Fab.com has produced).
If you’re interested in how social commerce works, stop reading this blog and check out fab.com for yourself. Send me a tweet (@priceyjohndoe) if you need an invitation to join the site, or want to start a conversation about social commerce.