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If you sell online and haven’t seen TripAdvisor’s new Facebook integration, check it out.  It’s a great example of what the future of social commerce is going to look like.  Go to any destination page on www.tripadvisor.com and look for the blue box to the right of the image.  Here’s what it looks like for me for Zurich:

There are three aspects of this application that point the way to the future.

Context.  You could get the information displayed here – which of your friends has been to a place you’re researching – by going to the TripAdvisor Cities-I’ve-Visited app.  But would you?  Here, TripAdvisor is delivering the social information in the context of your normal research path, rather than forcing you to detour to get it.  That makes you much more likely to consume this influential content.  For online merchants, context is just as important.  Shoppers do product research on product sites, not on social sites.  So it’s more powerful to bring the social references into the normal shopping path than it is to bring product information into the social environment.

Data source integration.  This tool combines two data sources – one from TripAdvisor and one from Facebook.  TripAdvisor has a database of places that many of their members have been.  It comes from a popular app they built a few years ago called « Places I’ve Visited ».  These data are combined with Facebook’s who-knows-who data, enabling TripAdvisor to tell you which of your friends have been to a particular place.  (Note: this has nothing to do with Facebook’s « Like » functions!)  As a merchant, you have a database just like TripAdvisor’s that you can leverage in a similar way: your purchase history data.  A mash-up between this data set and friend lists from Facebook (and other sources) is the key to delivering socially-enhanced shopping experiences.

Message-based communication.  The backbone of social commerce, to date, has been customer reviews.  Though highly effective, they’re not really all that social.  The shopper who posts a review never knows who will read it.  The shopper who reads a review can’t reach the person who wrote it.  There’s no direct communication between shoppers.  But in this TripAdvisor app, a visitor is offered a channel to connect directly to people with knowledge of the topic.  This is not passive Q&A where questions just hang around waiting for someone who can answer to happen by.  This is a message-based model where shoppers can actively reach out to one another.  My question about Zurich is not just posted on the Zurich page, it’s sent to the inbox of people who have been to Zurich.  That deepens and extends the engagement of the current visitor, who is called back each time their question is answered.  And it re-engages the past visitor who receives and answers the question.  This direct, message-based communication is also in the (near) future of social commerce.

In short: keep it simple.

In the first version of TurnTo, we were determined to set a gold standard on privacy control.  We provided a multi-level model for authorizing purchase information sharing.  We had forward and reverse models for specifying friend relationships.  We let users create groups of friends then share with groups while excluding individuals or sub-groups.  We provided time-based controls that let users specify review periods.  And that’s just the stuff we implemented; our plans went even further.

You know how that movie ended: no one used these functions.  And we’ve been stripping them out of the system one by one ever since.

Here’s what we learned: when it comes to sharing purchase information, there’s them that do, and there’s them that don’t, but there’s no one in the « I would if only I had more granular controls » group.  The best way to serve your users is to keep the model very simple so that it’s obvious at first glance what sort of information sharing is going to happen.  It’s OK to be very open, very restrictive, or anywhere in between, as long as the rules are obvious.  Granular controls don’t help you increase your audience. At best they’re ignored, and at worst they cause confusion and bad feeling.

In contrast, Facebook has been moving in the opposite direction.  They wanted to make their environment more open to enable functions that would be valuable to their members.  But they felt a significant part of their membership might prefer the old, more restrictive model.  So to keep everyone happy, they added granular privacy controls.  « Everyone can have it just the way they want it. »  But in trying to keep the old and the new at the same time, what used to be simple got complicated.  And that hasn’t worked.  People get their settings wrong and are surprised.  People feel duped if their settings change without warning, or they feel coerced if pressed to change settings they were happy with.  Or they feel burdened by having to learn complicated rules for something that used to be simple. Or they lose confidence in the system and back away.  And what about those conditions where A meant to share only with B, but B shares everything with everyone, and A didn’t see that one coming?  Now Facebook has added the Bandaid of bundling those granular controls into higher-level preferences.  « You want it small, medium, or large?  Don’t worry about the details. »  That might help – we’ll see.

But if Facebook had asked us, we would have told them this: it’s OK to change, even radically.  (You of all companies know that and have shown the guts to do it.)  Decide on the basic approach to privacy you think is best for your users and your business.  And throw everything else out.  Some users will gripe about the changes (like they did when you introduced the news feed).  But then they will see the wisdom of your new model, their behavior will adapt (some may share less, others more), and they will thank you thank you thank you for keeping it simple.

After over a year in the market helping a few dozen innovative online retailers add social shopping features to their stores, we thought it was time to synthesize and share the big lessons we’ve learned.  So here [drumroll] is our new whitepaper: Onsite Social for Online Commerce.  In it, we get specific about things like:

• How to leverage social networks for Social Merchandising within your store
• How to most effectively encourage shoppers to share news of their purchases with their social network friends
• Why adding Social to ecommerce sites requires different strategies than for content sites
• What sort of results are realistic to expect

We’re just putting it out there – no registration required to get it.  If you find it thought-provoking, we hope you’ll get in touch with us and pass it on to others.  Enjoy!

A new study out from Facebook and Nielsen shows that adding even a small social element to an advertisement dramatically increases the effectiveness of the ad.  We’re excited about this research because it provides some pretty solid guidance on the effect merchants can expect from adding social elements to product merchandising on their online stores: increased conversion rates, increased loyalty/repeat-purchase rates.  Their chart tells the tale:

First: we wholeheartedly agree with the ideas underlying Facebook’s big announcements today. People want to be able to interact with their friends on sites all across the web, not just within Facebook.  And sites don’t all want to have to become Facebook apps to support this.

TurnTo has been working to enable contextual delivery of social networks on ecommerce sites since our founding in 2007.  And we’ve proved that the benefits for both shoppers and merchants are significant.  So we applaud Facebook, appreciate the validation that their heading in this direction provides, and are already hard at work incorporating their new API.

We also think that to derive maximum advantage from an Onsite Social strategy, ecommerce sites should not rely exclusively on the new Like-based functions that Facebook is providing, but should – more importantly – leverage their purchase transaction data.  Here’s why:

It’s useful for your shoppers to see which of their friends know about your store and the products you sell.  Facebook’s API takes care of the problem of determining who you shoppers’ friends are.  But how do you determine what those friends know about?  Facebook’s new Like button lets shoppers register a connection to items on your store that they, well, like.  But Like does not equal know-about.  And many people who buy from you – and therefore REALLY know about you and your products, will never click Like.  In other words, there will be loads of false positives and false negatives.

If you were a content site, this might be the best you can do.  But as a commerce site, you have a unique asset: the purchase transaction.  You already have a massive set of people who really do know about you and your products, and the list grows every day.  They’re called: customers.

So go ahead and use the new Facebook plugins.  But also, and more importantly, leverage your transactional data to socialize the shopping experience on your site.  That’s where the big opportunity lies.

Online Media Daily reports today on a study by ICOM — a division of direct marketing agency Epsilon — which finds that there is no universal influencer, and that consumers are influencers strictly within product categories, rather than across all categories.  In other words, just because that blogger or Twitterer has thousands of readers/followers doesn’t mean they will be influential with YOUR customers.

Then the piece goes on to note:

One of the first studies to seriously cast doubt on influencers’ limitless authority was released by Canadian research firm Pollara in mid-2008. Based on the responses of some 1,100 adults, it found that self-described social media users put far more trust in friends and family online than in popular bloggers, or strangers with 10,000 social network « friends. »

Nearly 80% said they were very or somewhat more likely to consider buying products recommended by real-world friends and family, while only 23% reported being very or somewhat likely to consider a product pushed by « well-known bloggers. »

So if your goal is to activate the people who are influential with the consumers you are targeting, shouldn’t you be looking for your influencers within those consumers’ friend networks?

Forrester retail guru Sucharita Mulpuru recently published her latest TechRadar report on Social Commerce.  Available from Forrester here.  And for free download from ATG here.

We were pleased to be included as one of a select group of vendors profiled in the report.  It’s a great resource for retailers in planning their approach to social.  Here’s the chart that summarizes it all in one place:

The Economist has a special section this week on social networking.  They include the chart below pointing out that friend recommendations are the most trusted source of product information.  What’s interesting here is just how far ahead friend recommendations are from the next closest source; eyeballing the « trust completely » bar, the factor appears to be almost 3X.

So if trust is important in your sales and marketing, you really need to be thinking about how to harness the power of social networks.

Optaros’ « Social Ecommerce Ebook » makes for great reading if you are trying to optimize the performance of your ecommerce site.  You can download it here.

They make the points that: 1. higher levels of shopper engagement on retail sites drive improved business performance, and 2. social commerce tools are a powerful way to drive engagement.

A couple highlights:  From the Harvard Business Review Article, « In Ecommerce, More is More« , they cite,

The majority of managers we spoke to in our global study told us they believe that a broad array of information diverts attention from the core offerings. But we found it helps customers search for solutions, invites them to think of all the ways the core products might add value to their lives, wins their loyalty, and entices them to buy. In fact, we found that exploiting consumers’ desire for engagement is the single dominant driver of superior shareholder value for e-commerce companies.

In the section titled « Making Shopping a Social Experience, » (p.44 on) they cite an article in the Wall Street Journal on the benefits of social shopping.  (The article features the positive results Teavana and Compsource are seeing from their TurnTo implementations!)  Their « Business Takeaway »:

People like to go shopping with others when shopping in person. With Facebook Connect and other social shopping applications, you can replicate this experience for your customers online.

The bottom line of their study (well, it’s actually more like the title): « Retailers Achieve Higher Conversion Rates Using Social Shopping. »

There’s a session at the next ANA Shopper Marketing Committee I’d really like to attend.  (But I’m not a member – sigh…  If you are a member, you can find it here.)  The point of the session is so important for multi-channel retailers, I’m copying the description here.  I’d put it this way: don’t just use your web presence to sell; use it to create a connection to your brand that will bridge from your site all the way to your store.  One of the most powerful ways you can do this is with social merchanising tools (like TurnTo) that show visitors that their friends are also customers.

11:30AM- How Shoppers Shop: The vast majority of shoppers conduct research before they go to store, with an increasing proportion of them spending time online, not only looking for deals, but also getting recommendations from friends, looking at product reviews, and comparing product information. Moreover, online research and recommendations are having a greater impact on what makes it onto shopping lists. With roughly half of women indicating that they have purchased products based on recommendations from friends, viral marketing represents an important opportunity to engage shoppers before they go to the store. While significant attention has been paid to the roughly two thirds of brand decisions that are made in the store, the growth in digital shopper marketing represents a major opportunity to increase preference and purchase intent earlier along the path to purchase.

A new Forrester report predicts that 2010 will be the break-out year for social marketing.  Online retailers, presumably, will be affected by this more than anyone.  Internet Retailer has a nice write-up of the report.  Forrester subscribers can get the full version.  Here’s the summary:

In 2009, the majority of interactive marketers tested Social Computing tactics, ranging from Facebook pages to blogs and communities. In 2010, marketers will move out of test phase and treat Social Computing as a mature channel, setting budgets and establishing formal listening and measurement plans. This maturation will push the value of Social Computing and its insights deep into company departments beyond marketing, setting up organizations to fully embrace Social Computing and becoming more transparent and interactive with consumers. As Social Computing matures, both marketers and vendors will feel pressure to not only prove its profitability but also ensure consumer privacy.

Data from comScore as reported in the Wall Street Journal shows holiday sales up 4% over last year.  Not bad considering the economy. But the growth appears to be driven largely by a huge increase in promotions:

« Data from Shoplocal.com show that online retailer promotion activity is continuing at a high rate with the number of offers in the last week up 21% versus a year ago, » said comScore Chairman Gian Fulgoni.

The strong sales numbers won’t mean much if the January headlines are all about the carnage from over-discounting.  (Remember the joke about making up for negative margin on volume?…)

I’d like to see an analysis that compares the cost of all that discounting to the cost of tools that could drive equal sales volume without compromising price.  For example, for a small percent of the cost of their holiday promotions, most retailers could dramatically expand initiatives like social shopping.  And in the end, their bottom lines might look a lot better.  Please comment if you know any work that looks at this.

Most of the focus on social shopping has been on how stores can build a presence on Facebook and Twitter.  But new research from BIGResearch for Shop.Org suggests this is backwards.  Online stores will likely benefit far more from bringing the social networks of their shoppers into the buying experience within the store.  Here’s why:

[Social networks] are rarely the starting point for shopping per se. When we asked consumers, “Where do you typically start your online shopping? (Check all that apply)”, consumers told us that they are most likely to start their online shopping at merchant Web sites (almost three-quarters), search engines / directories (one third), and catalogs or offline stores (about a quarter) — with social media sites trailing far behind.

So if you want to truly tap into the power of your customer base and the social network of your shoppers to influence purchases, do it ON YOUR SITE.  That’s where real buyers come to do their research.  And that means leveraging tools like Facebook Connect to make all that social data available to shoppers when they’re really in-market.  (TurnTo can make this easy.)

Here’s data from the report, available here. (You must be a Shop.Org member for access.)

Paul Dunay, The Global Managing Director for Services and Social Media at Avaya, gave this description of social commerce in an interview in eMarketer:

Social commerce is working with or using your social graph, which is defined as your followers or your friends, and allowing them to help you make buying decisions. Social commerce can be anything from a buying suggestion or recommendation—perhaps a tweet from a Dell outlet saying, “Hey, we have a special on this”—to something like Facebook Connect. Facebook Connect would allow you to go to a Website like Dell.com and authenticate yourself using your Facebook profile, allow your identity to be known and access your friends so you could spark up a chat. So I could say, “Hey, Jeff, I’m looking at this new fancy laptop or this netbook. I heard you bought something. Would you recommend this to me?” So you could almost take your friends shopping with you. That is the potential with this example.

Hey Paul, come look at the sites using TurnTo.  Your vision is alive today!

Business Week just published a piece on the potential for Facebook in online shopping.  They focus on the role of Facebook Connect in enabling shoppers to post questions to their Facebook network before making a purchase.

It makes sense that this is the primary way Facebook Connect has been used so far in online shopping, since it’s the easiest to implement.  But it’s just scratching the surface.  The real potential is in bringing the social network to the shopping site (not the other way around).

For one thing, many people are hesitant to blast questions that they know are only relevant to a small portion of their network out to everyone.  No one wants to be a spammer.

Also, most shoppers don’t think of Facebook as the place to go when researching a purchase.  The primary research destinations are merchant sites and content sites that address the product category.

Combine those two considerations and what you get is a requirement for a system that runs on the merchant (or content) site and tells a shopper which particular people can help them with their purchase decision, so only relevant people receive the shopper’s questions.

If you sell online and this makes sense to you, check out the way TurnTo’s merchant partners are using the TurnTo system to achieve exactly this.  www.turnto.com/partnerlist.

According to a new Nielsen report, 20% of “social consumers” now discover content through their social contacts, instead of through search engines or content portals. Commerce is a type of content. This means that for “social consumers” (defined as those who spend 10 percent or more of their online time on social media), Social could become the new Search. What can online retailers do to tap into this new trend? Deploy tools that let your shoppers discover your products by looking at what friends and neighbors bought.

From The Internet Retailer survey of IRNewsLink e-newsletter readers conducted in August 2009 with e-mail marketing and survey firm Vovici Corp:

Social marketing was a top priority for 49.5% of survey respondents this year, compared with 35.7% for video, 34.1% for blogs or customer ratings and reviews, and 22.5% for live chat or product personalization.

Lots of other interesting stats there about Emerchant priorities. Worth a look.

That’s the title of a recent article in the New York Times on research showing that the power of friend-influence is so great it even has a significant effect on your health.  The research was done by Nicholas Christakis and James Fowler using data from the long-running Framingham Heart Study and published in July 2007 in the New England Journal of Medicine.  We see implications for social shopping, as well.

Findings from the study cited in the article include:

• When a Framingham resident became obese, his or her friends were 57 percent more likely to become obese, too.
• A Framingham resident was roughly 20 percent more likely to become obese if the friend of a friend became obese — even if the connecting friend didn’t put on a single pound.
• A person’s risk of obesity went up about 10 percent even if a friend of a friend of a friend gained weight.
• A friend taking up smoking increased your chance of lighting up by 36 percent, and if you had a three-degrees-removed friend who started smoking, you were 11 percent more likely to do the same.
• If a person at a small firm stopped smoking, his or her colleagues had a 34 percent better chance of quitting themselves.
• The article also cited, a 2006 Princeton study which found that having babies appears to be contagious: if your sibling has a child, you’re 15 percent more likely to have one yourself in the next two years.

So, if the example of thin friends can make someone thin, and the example of friends quitting smoking can help someone quit, imagine what seeing friends shop at your store does.

Here’s an article in AdWeek summarizing the findings from a recent Nielsen study of consumer trust.  « Recommendations from people known » is by far the most trusted source of input — 20% ahead of the next closest.  Nielsen gathered opinions from 25,000 internet consumers to produce this chart:

Most of the books I « read » these days are audio books.  Last year, that included Charlene Li and Josh Bernoff’s excellent Groundswell.  (Here it is on Audible.)  As a result, I missed this extraordinary chart, and just discovered it today.  So it’s not exactly breaking news.  But even if you’ve seen it before, it’s worth a second look.