Here Comes 'S-Commerce': Research Reveals Next Wave of Social Networking Opportunities
Sunday, 15 October 2006
Compete, Inc. has announced research findings from a new Spark! “s-commerce: beyond MySpace and YouTube,” which examines the convergence of the social networking phenomenon and e-commerce, or “s-commerce.” Compete’s analysis reveals that social networkers are increasingly turning away from traditional media and toward their peers for information and product recommendations.
This sea change provides marketers with a new and exciting opportunity to reach consumers by launching s-commerce initiatives that weave best practices from social networks and online commerce. By welcoming consumer participation throughout the marketing process, companies can engage consumers at deeper levels and achieve their sales and marketing goals.
Growth in online social networking has been explosive – consumer visits to social networking sites have increased 109 percent since January 2004, while site usage (measured by pages viewed per member) has increased 414 percent over the same time period, four-times faster than member growth.
As online “socialites” spend more time on these sites, they become impervious to traditional media; over one-third of social networkers spend less time watching television, and reading newspapers or magazines as a result of increased usage of social networks. What’s more, online socialites say peers and colleagues hold more influence over their purchase than any other source of information.
The challenge for marketers is to connect with consumers while they become disengaged with marketing. New s-commerce approaches (examined in the study) recognize that the transactional and social Web can be blended and that marketers can achieve commercial success by involving consumers in promoting and selling their offerings.
Other findings include:
· Compete’s analysis indicates that people join a social networking site to receive four benefits: Meet people (78 percent); find entertainment (47 percent); learn something new (38 percent); and influence others (23 percent).
· Online socialites have a different spending profile than other consumers. Annual discretionary income for online socialites is nearly $8,000, 20 percent higher than consumers who have not used a social networking site, and they spend nearly 25 percent of their disposable income on online purchases (versus 17 percent for non-socialites).
· s-commerce innovators are using one of six strategies to integrate consumers into their sales and marketing efforts: Branded micro-sites; customer reviews and ratings; online customer forums; peer-to-peer transactions; product-focused blogs; and community-created products.
“By understanding why people seek out social sites and the factors that shape their participation, marketers can explore and create new ways for their brands to thrive within the social Web,” said Stephen DiMarco, vice president of marketing at Compete. “Committing to a social commerce strategy means welcoming consumer participation throughout the marketing process.”
Compete identified key steps to help marketers find success as they engage in s-commerce initiatives:
· Research consumers, while they research you and your rivals.
· Create a channel to connect consumers and your brand.
· Engage consumers in a conversation: listen, learn and leverage