The Rise Of Social Commerce

There’s a battle waging in the world of commerce, where newly empowered customers are demanding a better, seamless shopping experience. Social commerce is the outcome, but companies don’t understand that this is more than simply putting up a Facebook page. It’s about the impact that social commerce will have on your organization. It requires a fundamental rethink of the relationship with customers and partners, and it impacts at the core how companies organize and operate.

This is such a major shift that Altimeter is basing its first event on this topic. At “The Rise Of Social Commerce”, taking place October 6-7th at the Four Seasons in Palo Alto, we’ll hear about best practices from expert practitioners like Best Buy, Dell, Hallmark, Nielsen, Newell Rubbermaid, Virgin America, and Zynga, amongst others. This is an intimate event, limited to only 100 attendees so that we can have deep, meaningful conversations that will provoke breakthrough thinking.

I’m going to discuss the event in two blog posts. The first one today is about the framework for understanding how social commerce will arise. The next post will be about how we’ve structured the event to be a unique experience.

The event is organized around the four phrases that we believe organizations will evolve through as they engage in social commerce (see the agenda).  This will be detailed in a report that Lora Cecere will release just prior to the conference, but I thought I’d give you a sneak peak at some of those ideas with the hope that it will encourage you to come to the event to learn more.

We believe that social commerce at companies will develop through these four phases:

1) Social For The Sake Of Social. At this step in the journey, companies learn how to listen, and build a dialogue with their communities. The goal is typically to build a fan base and to extend brand reach, with the result being that social efforts centered on the marketing and communication functions. But companies are quickly finding that this is not sufficient because your fans want more. The question soon becomes, “What is the ROI? And, how do we encourage our fans to buy?” As companies struggle to answer these questions, the effort no longer is social for the sake of being social, but gives rise to horizontal processes that extend beyond marketing to drive social commerce.

2) Enlightened Engagement. In this phase, social processes extend horizontally across the organization to spawn new outside-in processes.  Companies learn how to listen, test and learn and then respond.  Tactics include integrating social into a Web site, changing customer service to include social listening, and using community feedback in the design of products and services.

But in the evolution of integrating social processes, companies find that listening and learning is not enough.  Fans want companies to respond in a more meaningful way.  They want to have input into which products that they buy and the way that they buy these products.  This gives rise to the third phase of social commerce evolution.

3) Store Of The Community. As product development organizations learn that they can trust the voice of the community, open innovation processes accelerate and your customers, suppliers, and partners all help to determine the four Ps of marketing. Which Products/services are delivered, what Price is paid, how it’s Promoted, and finally, how you Position within existing and new channels to maximize presence. In the process, the heightened needs of that community—especially their use of new technologies.

As shoppers give input into the four Ps of marketing, companies realize that they can use new technologies—mobile applications, geo-location shopping, 2-D tagging, social gaming, social couponing, smart shelves—coupled with social technologies, loyalty programs and point of sale data to redesign the shopping experience.

4) Frictionless Commerce. This leads to the fourth phase, where there is a redesign of the shopping experience to improve the commerce experience.  These new technologies and relationships allow companies to build customer intimacy in new and more meaningful ways.  Friends can buy with friends, new services can be delivered, checkout becomes more automated, and channels become more seamless.

Traditional push-based processes will give way to the momentum of community pull.  Those that quickly test and learn and adopt will define new brands, deepen customer loyalty and repeat purchases and accelerate time to market for new products.  Those that don’t will struggle in the evolving market.

As you can see from the four phases, this it no longer about being social for the sake of social.  It is about a new way of doing business where real and meaningful relationships evolve in new ways to extend all the way to the store shelf.

The race is on.  Are you equipped? We want to help.  Join me at The Rise of Social Commerce event to learn. To sign up, go to Use the code “RSC1” to get a $100 discount.

If you have any questions about this event, or have thoughts about the rise of social commerce, please email me at charlene (at) altimetergroup (dot) com. Hope to see you in October!