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We have a superb panel line up and what promises to be a heated discussion on social commerce including a few case studies, insights and strong opinions.

Social Commerce, The New Normal Influence Economy 
Most customer interactions with your brand and the customer buying decisions that goes along with that – won’t happen on your brand’s website. In 2010, U.S. e-commerce sales totalled $165.4 billion, up 14.8%. Opportunities are burgeoning as the cost of eCommerce operations drops and customers procure more goods & services online. In this session see case studies of how innovation in social media can drive the overall commerce model and enable brands to connect with customers and their friends to create value in earned media.

The panelists included:

Rochelle Grayson, CEO of BookRiff Media Inc., and Program Advisor, Industry Chair for the University of British Columbia’s Social Media Program @RochelleGrayson

Rochelle Grayson is CEO of BookRiff.com. BookRiff let’s consumers creates and publish their own books by mixing and matching content from published books, BookRiff creators and the Internet. Anyone can create a book compiled of riffs from start to finish in 48 hours and make it available for sale as an ebook or in print through bookriff.com. Along the way every content creator get’s paid for their used piece of mirco-content. Rochelle is a serial entrepreneur. She’s also Industry Chair for the University of British Columbia’s Social Media Program and instructor of Social Media monetization at UBC. Welcome to you.

Harley Finkelstein, Chief Platform Officer at Shopify; Harley explains his role in Fast Company

Harley Finkelstein, is chief platform officer at Shopify.com. Shopify is an Ottawa based eCommerce DIY platform used world wide. Sopify lets anyone set up an eCommerce store in 15 minutes. In the last 5 years, the startup has grown to power 16,000 stores in 70 countries and generates over 100 million in annual sales and growing. Harley is also a busy entrepreneur, MBA and lawyer.

Matthew Bertulli, CEO and Founder at Demac Media and Co-founder, Socialgift.com

Matt Bertulli was one of the first angel investors in Socialgift.com – Socialgift is a group buying startup that makes is easy for your friends to decide on a group gift and chip in and buy you something they agreed you’d love from a participating retailer or allows friends to contribute whatever amount they’d like to your gift. Matt is also co-founder and CEO of Demac Media, an e-commerce professional services solution agency in Toronto.

SocialGift from Mango Studios on Vimeo.

Daniel Patricio, Founder and Product Manager at Pinpoint Social @danielpatricio

Daniel Patricio is founder and product manager of Poinpointsocial.com, Pinpoint Social, is a self service platform that makes marketing on Facebook simpler and more effective. Pinpoint Social enables you to create dynamic Facebook fan pages and allows you to create customized campaigns, promotions or contests without the need to write a line of code. Pinpoint Social also provides detailed customer analytics.

See you there!

-Marina Mann  LinkedIn or Twitter @marinamann

Bad Groupon stories can go something like this:  A local pizzaria posts a daily deal, happy to take a reduced margin to bring in new customers. No guarantees if they will ever come back, but they’ll come once.  The up-side? Landing a Groupon deal, even at a loss, can put a small business on the map. (These days 98% of Groupon deals tip.) In this case, hundreds of customers stream in for pizza, wielding their Groupon vouchers, complaining about slow service and demanding exceptions to the small print. The restaurant management finds itself overwhelmed and understaffed. No one is happy, least of which is the local restauranteur nor the regulars who happen to pop in to their local during a daily deal.

Today, Groupon boasts over 80 million subscribers and despite a loss of over $400 million last year and a continued onslaut of Groupons turned ‘bad-ons’ for local merchants and service providers, we can all expect an exciting IPO coming soon.

What is Groupon Now? Groupon copy cats and established statup like Foursquare as well as big brands like AmEx are getting in the daily deal game. Every major newspaper or owner of a mailing list is working daily deals.  To stave off the unwashed latecomers the company recently launched Groupon Now: hourly local deals in about 25 cities. Perfect for leveraging the mobile customer experience.

How does Groupon Now work for Mobile?  Unlike regular daily deals, purchased for future use, ‘Groupon Now’ deals are redeemed immediately via web or mobile. Customers only pay if they use the deal and merchants can manage their business in real time. On days when business is slow, a merchant can create a deal to be redeemed by a customer immediately. Local businesses may be less afraid of it because they can shut it off quickly if they need to.

The mobile model seems to resolve a list of problems with the Groupon daily deal model for both small business owners and service providers. In the scenario below, Jodi missed her regular yoga class, but still feels like a workout. She’s already out and about with her gear so she uses her mobile phone to find a workout deal in her postal code. Jodi finds 7 fitness deals, each for a particular class time. She selects the one that works best for her and buys it up via mobile. Voila. If Jodi’s not able to use the deal, no need to sell it to friends or login to a deal swap site to unload it. It’s automatically refunded.

Pretty compelling but what does this model do for loyalty if traffic is not necessarily profitable traffic? Will people come back at regular price or simply wait for another deal? In essence, the lack of loyalty is baked-in to the Groupon model. Because if you were loyal, you’re not going to buy another deal are you?

However for big corporations getting into the mobile moment-by-moment deal game, like The Gap and AmEx it’s a different story which I’ll attempt to cover in my next post. Until then, add your thoughts and comments.

Marina Mann

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Read more? Here are a few articles to discover…

Why Groupon Is Poised For Collapse, An in-depth series looking at the daily deal industry written by Rocky Agrawal, an entrepreneur who has worked on local products since 1995; TechCrunch dated June 13th, 2011  http://tcrn.ch/riXi3n

Meet The Fastest Growing Company Ever, written by Christopher Steiner, Forbes Magazine dated August 30, 2010, http://onforb.es/qjU2tp

A look at how daily deal sites work, The Associated Press, published Jul. 20, 201 http://bit.ly/mUAA3A

American Express flexes its muscles in local deals market, Ryan Kim, GigaOm, June 20, 2011 http://reut.rs/og32qt

Google search – a blank page with a search box; Groupon – get your friends together to take advantage of a good deal (and take a big bite out of the retailers profits); Craigslist – forget the limitations of newspapers and post classifieds online; Nabster – share you music with your friends online instead of passing around tapes. Netflix… The list goes on and on and on.

Disruptive and innovative businesses don’t reinvent the wheel, they just make things a bit easier and remove a few layers between the business and the customer.

The live Music business, like a few other entertainment businesses (Broadcast TV, Movies), don’t like to innovate because the major players own the ‘complicated business process’ otherwise known as the ‘supply chain’. For the live music business that includes the concert events, the venues, the tour promoters, the ticketing and sometimes even the acts – you get the idea. According to the NYTimes, the touring market (live music) is the fastest growing sector of the music business.

Enter Songkick.com a site that’s been around since 2007, backed and staffed by some big hitting talent and built with well executed social dynamics combined with concert listings.  The founders took existing technologies and connected a key customer insight (finding reliable concert listings and info about bands in one place) and a key business insight (40% of most concert tickets go unsold). For the fan, it’s pretty straightforward: search for a band you want to see and Songkick will send you a note when that act is touring in your area. No more scouring for listings on blogs, MySpace sites and Ticketmaster. Search a location and find concert listings, photos, music, merch and talk to fans about past shows. And buy your tickets online – currently the website operates on a affiliate marketing model with no paid adverts trafficked.

Funny, there’s no reason MySpace could not have been Songkick. A lost and extremely obvious opportunity.

Songkick is not alone but at the top of it’s game. For similar models that, I believe, are not as well executed, see:  Pollstar, the concert industry trade publication, JamBase for live music and concert listings (right away, the user interface puts it at a disadvantage) and Bandsintown which is similar to Songkick, but loaded with adverts.

Leave a comment. I heart feedback.

Nevertheless, it’s increasingly clear to Marketers that lifestyle and behaviour changes born of economic abundance and endless borrowing have translated into values of thrift, and conscious choices by consumers. This new dynamic is described by SAI Marketing as the “New Normal”.

The “new normal” leads to a more cautious approach by consumers to personal fiance management. We see that by a reduction in the appetite for credit and the ongoing rise in savings in both Canada and the US. This trend has impacted not only the way consumers “buy” but also must explicitly imapct way Marketers “sell”.

Changes in consumption patters are undeniable. Marketers continue to resort to extreme discounting and product bundling, but consumers are reluctant to spend money outside of their tightly defined needs. This phenomenon will only worsen as gas prices continue to climb in Q1 2011 and consumers’ disposable income continue to dwindle.

“I don’t trust the Marketers, but I’ll trust my friends.” Enter Social Commerce.

Among the many definitions of Social Commerce documented by Paul Marsden of Social Commerce Today here’s a few I liked for their simplicity and matter-of-fact-ness…

Definition 15: Paul Dunay (Avaya) (October 2009)

• Social commerce: 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.

Definition 17: IBM (October 2009)

• Social Commerce: Connect and foster active participation with customers to help improve your customer experience… including ratings and reviews, blogs, micro-blogging as well as forums and communities
• 17a Social Commerce: The concept of word of mouth in the context of e-commerce

Definition 20: John Jackson (DecisionStep) (February 2010)

• Social Commerce: The ability of two or more people to collaborate online, to share opinions and influence each other’s buying decisions

Forty percent of Canadians accounted for 95 million orders
“About 39% of Canadians aged 16 and over used the Internet to place more than 95 million orders. This was up from 32% and the 70 million orders placed in 2007, when the survey was last conducted.  Relatively more residents of British Columbia (47%) and Alberta (45%) made an online order in 2009. Residents in British Columbia and Alberta are the most frequent online shoppers.” – Stats Canada

Security is less of an issue?!
Security concerns seem to be fading. Eight in 10 online shoppers paid directly over the Internet for some or all of their purchases. This data demonstrates a huge improvement in online payment security from PayPal’s 2008 survey which found that 51% of Canadians feel anxious about purchasing online. 40% feel anxiety due to a lack of confidence in the merchant’s security, compared to only 27% of American shoppers.

The bad news: Canadians are spending CAN dollars on US retail eCommerce sites

The fact is that large, traditional Canadian brands have backed out of eCommerce because they simply don’t have the right talent to operationalize with profitability. To name two biggies …

• Canadian Tire shut down their eCommerce online store in 2009: Canadian Tire Dodges Out of Ecommerce: Will It Bounce Back?

• The Bay shut down their eCommerce store after their director of eCommerce (with a team of two) left to join TD. Sadly, the recent relaunch of www.thebay.com is a rudimentary brand brochure, a store locator and a clumsy user experience.

A few Canadian retail eCommerce success stories are worth mentioning

• La Senza, a Montreal company has been quietly doing a great job selling panties online and shipping FREE across Canada
• Lululemon has seen some incredible growth in eCommerce: New Mantra Pays Off For Lululemon
• We also have Indigo Books but they still can’t seem to get search right. Looking for Doug Coupland turns up ZERO responses!
• Then there’s The Shopping Channel and Mountain Equipment Co-op – both have moved into Web 2.0 with product merchandising and customer reviews.

Launch, Learn and Iterate: Strategic Thought Starters for Canadian Retailers

• The unarguable truth is that Canadians want to buy from Canadian retailers for a number of reasons – mostly to save on the headache of expensive shipping and often outrageous duty fees.

• “Expect US retailers to move into Canada with greater force in the next few years to capitalize on Canadian online spending habits. Setting up a Canadian face of an existing eCommerce sites is a small investment than building from scratch. Canadian retailers must consider that online retail is still growing faster than brick-and-mortar sales. B2C eCommerce will enjoy a compound annual growth rate (CAGR) of at least 10% according to eMarketer’s projections, and US retailers are well aware of the opportunity and are moving fast.”- The State of Canadian Ecommerce

• Canadian retailers are lagging behind due to anxiety of running and setting up an eCommerce webstore. However with a strategy that comes from the top, specialized talent in strategy and execution, the right data and open source tools, an eCommerce webstore can be ope operationalized internally or outsourced profitably.

Canadian Retailers: Here’s How To Get Your Webstore Right!

1. Create a Web channel line of business so your Webstore does not suffer from lack of specialized leadership and talent. While you’re at it, separate out your lead-generation from the Webstore product development activities. They are not equal.
2. Operationally, integrate Customer Care systems across all channels including Web. Your customer is not a Web customer, a call-centre customer or an in-store customer. Treat your customer as one customer. Make your Customer Care VP accountability for customer retention across channels.
3. Name a buyer for your online store to select products based on your online customer profiles. Operate with a limited product selection. You don’t need to sell all your products online! Enough said.
4. Do simple right when it comes to user experience. Don’t start out with every feature you can think of. Launch with simple features that work perfectly, like: a Blog, Search, Online Product Merchandising and Photography, Check Out, Shopping Cart + Shipping, and finally an intuitive My Account.
5. Keep your data accurate and clean. Get your product information, categorization and taxonomy right. Managing your data is the not-so-secret, quintessential sauce to a successful online retail business.
6. Do not make your IT department responsible for Webstore management and development! If you do, everything that can go wrong will go wrong. Instead, investigate and select the right eCommerce technology that will enable you to deliver the best eCommerce customer experience. Put together a manageable publishing and feature maintenance plan.
7. Think MOBILE. Whatever you create or iterate needs to work on a number of mobile platforms. Optimizing for mobile commerce or m-commerce could mean very little effort. Mobile commerce doesn’t need to be expensive.
8. Good luck and if you need help, email me: marina@marinamann.com

• Travel industry hit with the biggest drop in online purchasing by 6%, non-travel online economy dropped 1%
• Sales trends through the third quarter of 09 mirror last year and show no growth
• All income segments showing declines in e-commerce spending, however the 18-44 age group is purchasing more versus year ago, particularly in the high income segment (+10%)
• The impact of higher consumer debt means consumers have less ability to spend on discretionary items
• Unemployment/job security continues to be a top concern among all consumers (less of an issue in Canada so we may benefit from more discretionary spending)
• The Books & Magazines category was a top performer in Q3 ’09, and will be one to watch as we head into the holiday season, followed by Consumer Electronics and Sports & Fitness (marginally up)
• Consumers buy online from 1 – 3 trusted websites (up YoY by ~2 sites)
• Pure play sites accounted for nearly six of every ten e-commerce dollars spent in Q3 2009, their highest share on record
• Invitation-only e-luxury sites are flourishing
• PayPal B2C Market Share has grown steadily over the past four years to almost 10% of B2C Transactions; 2008 Holiday-promotions drove an increase in PayPal dollar share for retailers
• Coupon sites continue to grow in importance during these tough economic times, and as we saw in Q4 2008 we‟ll likely see visits and UVs spike in Q4 2009
• Savvy Smartphone users are shopping using mobile (no real numbers available)
• Sites offering free shipping will see greatest lift in online conversion
• Busiest online shopping day of the year will be Dec 14, 2009

Dear reader, if you come across the same type of data for Canada, please comment.

Thanks comScore!

The game-changing news is that Apple has done away with copy protection technology known as digital-rights management or DRM. “DRM-free” means music can be copied an unlimited number of times, to any device. It remains to be seen if this change in business model drives net new paying customers to iTunes (or those previously known as the pirates).

The 6th Innoversity Summit hits Toronto on March 9 and 10, 2009 at the Metro Toronto Convention Centre. The summit is dedicated to promoting innovation, creativity and diversity.

The Innoversity Summit brings together hundreds of thinkers, doers and influencers from media, culture, public service, community, academia, the private sector and elsewhere. A number of great panels are scheduled for both days.

On Monday, March 9th at 3:45 join me and my panelists at “The Virtuous Circle” for a heated discussion on cross-platform success and failures.

Moderator:
Marina Mann, Digital Marketing Strategist

Speakers:
Jeff Leake, Director of Music Program, XM Satellite Radio
McLean Greaves, VP of Interactive, Zoomer Media
Ryan Trotman, Director of Digital, CTV Music & Youth Services
Ray Philipose, VP Strategy & Product Development, Canwest Digital Media

You can register for a day pass or for a-la-cart attendance starting at $20.  Onsite registration is on the 700 level of the Metro Toronto Convention Centre, South Building, beginning at 7:30 am on Monday, March 9, 2009.

Onli