Social Commerce: Disruptive Potential of Social Media in Ecommerce and Classifieds Thad Eby, UK Director Agenda Framing the problem: why user-generated content Social Commerce as part of an online strategy A Capability Maturity Model for Social Commerce Page 2 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. What happens when Social Commerce is Applied Successfully? Web 2.0 Told Us Community was Important • The Product Catalogue Becomes Richer • From 5 to 58 Searchable Attributes • Additional “Sort By” Capabilities • 41% Higher Order Value • Consumers Define “Top Products” • 63% Higher Order Value • Returns go Down • 20.4% Higher Return Rate w/o Reviews • Better eCommerce • 49% Higher Conversion Rate • 22% Increase in Average Order Size Page 3 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. View of the Online Buying Process “Can’t find what I need” Direct to site Million results or none SEO Ranking Organic search Relevance control Call customer service Search % % Dependence on relevance Paid search Traffic Trafficpage Landing increase relevance Leave website Conversion increase % Order size increase Static merchandising Guidance Email marketing Unfamiliar taxonomy Affiliates Relevant promotions Online advertising Traffic Page 4 Static merchandising Browsing Limited refinement Conversions “Which is the best product?” Margins Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Sales % “Can’t find fit for my requirements today” Sub-Optimal Purchase Purchase Fewer Items Lower Margin Purchase Framing the Problem Online sales and customer loyalty are driven by a better user experience – Dialogue – Advise User experience is informed by a variety of factors – Design – Technology – Data Page 5 Customers are playing an increasingly pivotal role in the buying experience Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Push & Pull: How to Get the Most from User-Generated Content What do your customers want to do today? Who are they buying for today? We can advise customers Page 6 Customers can advise each other Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Contemporary Structured Approach 1. 2. 3. 4. Attract users Provide optimal user experience Boost conversion Provide powerful business analytics Traffic Sources Email Targeting Search Engine Page Views Brand Site Utility Ease of Exploration Relevant Guidance Conversions Product Selection Personalization Cross-selling Promotions Social Information Product Availability Reporting, Analysis & KM Infrastructure Page 10 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. What this all comes down to … know your customers better … advise your customers … let your customers advise each other … build lasting relationships Page 11 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Online Capability Maturity: Where does Social Commerce fit? Integrated Search and Navigation Product Catalog Page 13 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Online Capability Maturity: Where does Social Commerce fit? Dynamic Merchandising Product Catalog Page 14 Margins, Revenue, Pageviews, Conversions Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Online Capability Maturity: Where does Social Commerce fit? Content Sells Product Product Catalog Page 15 Margins, Revenue, Pageviews, Conversions Product Info, Lifestyle guides, Other Content Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Online Capability Maturity: Where does Social Commerce fit? Social Commerce Product Catalog Page 16 Margins, Revenue, Pageviews, Conversions Product Info, Lifestyle guides, Other Content Ratings, Reviews, Tags Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Online Capability Maturity: Where does Social Commerce fit? Multi-Channel Navigation Product Catalog Page 17 Margins, Revenue, Pageviews, Conversions Product Info, Lifestyle guides, Other Content Ratings, Reviews, Tags Store Inventory Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Online Capability Maturity: Where does Social Commerce fit? Personalization Product Catalog Page 18 Margins, Revenue, Pageviews, Conversions Product Info, Lifestyle guides, Other Content Ratings, Reviews, Tags Store Inventory Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. User Profiles, Order Histories Social Commerce (1) Guided Navigation® Refinements Allow users to refine based on objective product attributes Social Browsing Leverages Guided Navigation® to generate a dynamic taxonomy based on user reviews Requires a dynamic taxonomy which updates at the speed at which your users generate content Page 20 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Social Commerce (2): Help users find relevant reviews Dynamic Charting Guided NavigationTM Tag Clouds Sorting Page 21 Copyright©2007 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Social Commerce (3): Guide users to the products right for them… …Or whomever they are buying for Pivot between related products and reviews Page 22 Copyright©2007 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Social Commerce (4): Deep Insight Into Reviews Integrated reviews content Relationship Discovery Concept Clustering Guided Navigation Text snippets Rich UI Page 23 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Technology as an Enabler Cater to individual use-cases through integrated information access capabilities Ability to integrate content from across the enterprise Scalable infrastructure Flexible & extensible infrastructure Data Sources Product Data Page 24 POS, Purchase History, Expert Reviews Accessories, etc.Proprietary Copyright © 2008 Endeca Technologies, Inc.Profitability, All rights reserved. andRatings confidential. and Unstructured (manuals, data spec sheets, etc.) Summary User-generated is critical in a comprehensive online strategy User-generated content must be seamlessly integrated into the customer experience Drive results by doing more with user-generated content Page 25 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Thank you Page 26 Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential.