July 13, 2011
Q&A with Janice Diner, social commerce consultant
Whether Janice Diner is speaking to a client or a crowd about social commerce, she is passionate about the possibilities for retailers and their constituents. As the founding partner at Horizon Studios, a social business design consultancy, the Toronto-based Diner works to develop social commerce strategies and brand communities for clients such as Hertz, TD Canada Trust, Sony’s PlayStation and RIM BlackBerry. A former creative director and strategist, Diner spent time at Canadian agencies Sharpe Blackmore (Euro Havas) and Segal Communications (Interpublic).
As we researched our Social Commerce trend report, we talked to Diner about how she sees social commerce evolving and what brands should be doing to keep up in this fast-moving space. Her mantra, the thing she says she tells clients time and again, is that to sell products, they need to be where their customers are—and that isn’t necessarily a brick-and-mortar location. Brands that ignore F-commerce, m-commerce and other forms of social commerce do so at their peril, she warns. Increasingly, the social graph will be the tool that will help brands find customers and customers find brands.
What are we talking about when we talk about social commerce?
I like to focus on the two words: “social,” meaning that you’re in a relationship with the consumer and the brand. And “commerce”: the sale of goods. So it’s the sale of goods that are socially influenced. It’s a subset of e-commerce that involves using social media; it’s online media that supports social interaction and user contributions to assist in the online buying and selling of products and services.
You find social commerce inside Facebook, on e-commerce sites; Twitter is being used for specialty sales all the time; mobile devices—checking in with friends and getting deals. And you’re seeing physical installations that support social interaction to help drive a purchase, like with Macy’s [Magic Fitting Room].
What’s the goal for retailers and brands?
Your goal is to engage in dialogue with your customers and to sell goods. You’re going to take your e-commerce strategy and your marketing strategy, and you’re going to put a social layer.
This is what I tell clients: “We have this new layer. And we’re going to decide which channel makes sense for you, based on your business objective. So if you have an e-commerce engine, then we’re going to implement social tools on your e-commerce engine. We’re going to have a discussion and take a look at the objectives.”
I really think anyone that’s selling on the Web should be experimenting and try a couple of things. We don’t know the answers, we just know that we’re moving this way. And if you’re gaining critical mass inside Facebook, you should be experimenting with selling and servicing your clients on Facebook.
What’s your opinion on the Forrester report that concluded that Facebook commerce is not a necessary strategy for most retailers?
If you’re not exploring commerce opportunities on Facebook, your competition will be. My gut reaction was that it’s an intelligent document, but the conclusions are too early—there’s not enough data to make broad assumptions on success or failure yet
One roadblock might be a privacy issue. How much of my personal information do I have to reveal in order to enter a Facebook store?
When a user moves from their Facebook page to inside a Facebook store, you agree to share your information. But you are agreeing to share the information within the application, meaning that the information lives inside the application only and can’t be merged with an outside database—say, a retailer’s e-commerce site. Facebook prohibits app makers from transferring data about users to outside advertising and data companies.
But why bother—what’s the advantage to retailers and shoppers of using a Facebook store versus a regular e-commerce site?
The argument is that there are 600 million people who have Facebook pages, half of whom show up every day and spend 400 and something minutes a month on Facebook. So they are there, spending time. And then if you add social into it—where you are telling people what you think about a product, what you bought—that’s something you don’t always get on an e-commerce site.
Do you think Facebook stores will replace brands’ e-commerce sites?
We’re talking about augmenting. There’s no business case for Facebook replacing brands’ websites, at least not now.
How does social commerce manifest itself offline?
I love Macy’s Magic [Fitting Room], where you can go into the store, try on something virtually, upload a picture via Facebook and send it to a friend. That’s a great use of social commerce.
So social commerce is really about leveraging that instinct that so many people have to make shopping a social experience?
Right. How many times have you stood in line at a store and seen someone talking on their mobile phone with someone about what they are buying? I was at a Coach store in Florida at Christmastime. The woman in front of me had taken a picture of the purse she was buying and sent it to a friend; I heard her ask, “Do you want me to buy one for you as well?”
The best virtual social experiences mimic real-life social experiences. When I design for a client, I always go back to this rule of thumb: What is the current behavior, and how can we add a social technology layer on to that? How are people engaging socially in our category?” You’re not changing consumer behavior, you’re just adopting it to the virtual.
Like, “Look at this great deal I got”?
Facebook claims post-purchase sharing can increase conversion by two to three times. Whether that’s true or not, I don’t know. But it seems logical to me. That’s the way it works. “I went skiing here, and it was great.” Or, “I’m going to this concert. Anyone want to come with me?” Facebook is really good in enabling all those things. And they’re all attached to purchasing things.
So that, to me, is what it’s really about. People may be questioning whether social commerce is working, but nothing I’ve done in the last six years was proven before I did it.
Can we look ahead and see how the next six months will play out in social commerce?
Oh, gosh, if I knew it, I’d be building it.
Well, what should retailers and brands be thinking about?
They should be channel agnostic. They should take my goods or technology or whatever they are selling and take it where their audience is. It shouldn’t matter whether it’s online, mobile, at the physical store.
Can you think of a good example?
A really good example is the Starbucks card. It’s utilitarian, it’s got a loyalty aspect, and it has a social layer. I have a Starbucks card. I can put money on that physical card from the website or from the Facebook tab. And I can also have an application on my phone. If one of my Facebook friends has the application on their Facebook, I can buy them a cup of coffee by putting money on their card. So now I’ve got a social sharing layer when I’m transferring payments. When I met a friend in a New York airport, he waved his phone and bought me my coffee on his card. So it’s all one piece of technology, just being distributed across multiple media or channels.
Speaking of virtual payments, Facebook is pushing Facebook Credits, which were originally used for games, into the physical world. Who would take advantage of Facebook Credits?
It was originally a payment system for applications and gamers, and it’s becoming the mandatory payment system inside games. But people are offering other ways to use Credits. Warner Bros., with the movie The Dark Knight, was one of the first ones. This April, Facebook introduced Facebook Deals [Facebook’s version of Groupon]—if you want to purchase the deals, you can purchase them with PayPal, with one of your credit cards, or use your Facebook Credits. Now Walmart, Best Buy and Target all sell Facebook Credit gift cards. Now I can buy real goods. And it’s being supported by people’s newsfeed; it’s being supported by the 600-million-pound gorilla.
Could it end up being its own currency?
What’s to stop it from being its own currency? They are slowly adding features to the credit system, like transferring credits to your friend. That’s transferring payments in real-world terms. Right now, it’s just transferring credits; what’s to say tomorrow it’s not transferring money for real goods? It’s starting to sound like PayPal to me.
What’s the bottom line for brands or retailers—that you’ve got nothing to lose by implementing a social commerce strategy?
You can’t ignore where your customers are; you can’t assume they will just show up in your store. You have to market to them. How can you ignore check-ins? How can you ignore any of these things? You can’t. You have to start experimenting with it. And you have to see what works for you. Probably not everything is going to work. But what are you waiting for—your competition to do it successfully? You don’t have to do everything. But be first. I spend my days looking for clients that are ready.
I think it’s the most amazing time in the world to be in business. We’re in the midst of a revolution; it’s hugely disruptive, but there are incredible opportunities. Every business and every industry needs to be rethought in a social way. As long as you’re rethinking and you’re examining what the potential is for your business, and then you’re trying a little bit of it, you’re fine. You’re moving along. But to do nothing is ridiculous.