Trend Report from the Walpole Luxury eBusiness Forum
Royal Automobile Club London, October 2010
Stats and Insights (Brett Hurt, Bazaar Voice)
‘Is Social Commerce a Luxury?’
Importance of user reviews and encouraging interaction:
70% of today’s web is user generated
If a person writes a review or posts a comment, they would come back an average of 3 times to check to further comments
Every 5 star rating almost always has a negative review at its root. This causes the brand fans to act in defence of the brand.
Negative reviews provide an opportunity to improve product and service and almost always an invaluable insight on what customers really want.
Trend Forecast (Patti Freeman-Evans, Forrester Research)
‘Embracing the chaos: How luxury brands are adapting to a digital world’.
Patti emphasized the importance of disruptive events driving evolution throughout history. She pointed to the prehistoric ‘wheel’ as the first fundamental change in providing people the power of ‘Access’. Similarly, new technologies in our age are key to driving the change. Any innovation which improves ‘Access’ is bound to empower and ultimately become the method of choice for generations of people and more so consumers.
According to current forecasts, social commerce emerges at the top of the development trajectory for any brand online. Rather than stopping on online forums and company social networking pages, the growth in the e-commerce field is determined by the following path:
Employee networks – product sharing on social networks – recommendations of product (social media) – microblogs – customer reviews
47% of all consumers research online but would still buy offline. This vast figure indicates that ensuring a seamless experience and integrating the transition between offline and online is still a primary focus to ensure customer retention.
Trends: Mobile commerce, added value, enabling comments and seamless transition between online and offline
Insights into Strategy
Facebook’s ‘Like’ button should not be about generating traffic, but instead knowing more about the customer.
Whilst customer reviews have shown to be a powerful tool to generate uplift in sales and decrease in returns, the users will only be able to trust the reviews if they trust the reviewer. Providing profiles for reviewers or even a system to make it easier for consumer to identify the tastes and likes of the reviewer, will improve the social commerce capability even further.
Some companies have started including individual’s initials in their twets, hence providing an opportunity for consumers to relate to the tweets and develop a following.
Going forward, this model, propelled into the social media world by Hunch.com will see ever more followers, in a quest to find networks of people with similar tastes and interests.
Search Engine Marketing is still viewed as the leader in generating Sales
E-mail Marketing has been chosen as the preferred route to driving customer loyalty and retention
Social Media marketing is still mostly about generating recommendations, reinforcing the value of the brand and providing testimonials.
Mark Sebba, CEO of Net-a-Porter in ‘A Conversation with the Pioneers’ nominates Controlling distribution as one of the most important objectives for retailers online. Being in charge of your distribution as well as Google results makes a big impact to how well the business will grow and evolve
Mark’s reply to ‘Net-a-Porter’s best kept secret’ is fostering excitement amongst employees at all levels to create true passion.
This later point is something which has never been more true. Creating a transparent, passionate brand which is true to its goals not only from the outside, but from whithin, is something which will become one of the biggest differentiators for brands and companies alike going forward.