What it takes to win the social shopping game

Since the beginnings of e-commerce, online shopping works like this: Put products in a basket, proceed to checkout, pay. It’s a solo customer offline shopping simulation. With the appeal of a vending machine. Dull and lonely. But things have changed. A lot.

Disclaimer: We're not going to talk about shopping on Facebook (who does that?), or yet another refer-a-friend tool (how boring), neither do we think you would like to read about Groupon (old news) ever again. Nah.

We now live in a world where customers are mobile and connected like never before

When e-commerce was invented in the 1990's, 56k modems were a luxury and smartphones barely more than a vague concept. The internet was coined by the term web 1.0; websites provided information but allowed no interactions, yet contributions between users.

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In the 2000's, social networks like Myspace, Facebook, Twitter and Instagram emerged, began to rise in popularity and are now omnipresent. Soon after, smartphones started to cross the chasm from a geeky gadget to mass phenomenon. Today, billions of users worldwide use their smartphone for multiple hours a day, sending trillions of messages to friends, family, neighbours and colleagues every minute.

Social online shopping is the future

Our urge to connect and socialize is strong. And this doesn’t stop when it comes to shopping. Shopping is a group activity. We enjoy shopping with friends because they help us with our own buying decisions. So much so that effectively it is the people around us that shape what we buy, when we buy and where. It has been scientifically proven that group conversations have a significant impact on the shopper’s choice, purchase likelihood, and spending over time. Simply put: In groups, customers shop more and come back over and over again.

The fastest growing companies in e-commerce are embracing this and are shaping the social shopping experience of the future. Alibaba, Tencent, Amazon, Pinduoduo, WeChat and Instagram Shopping are at the forefront of the social shopping revolution.

Take Pinduoduo as an example. Pinduoduo is a wildly popular social commerce platform from China - and one of the fastest growing apps in China ever. It combines e-commerce with elements of social networks and gamification. And despite being only few years on the market, it already surpassed established Chinese e-commerce giant JD.com in terms of revenue with record braking pace (The incredible rise of Pinduoduo, China’s newest force in e-commerce).



The merits of social shopping

Online shopping happens at the crossway of vast choice and very personal needs. It is a big pain for customers to steer through the huge amount of products and brands on the web. Finding the right product becomes a real challenge without support. Naturally, customers turn to their trusted peers for advice before buying something.

Retailers and brands who understand this will not only solve an actual problem of their customers but will reap the fruits themselves:

1. Lowest cost per acquisition & new customers through referrals.

2. Larger order volumes & increased life time value per customer.

3. Exceptional loyalty to your brand & higher repeat purchase rate.

Social shopping in its true meaning brings customers closer to each other as well as closer to your brand. Shopping inside a tab on a Facebook page is not social shopping. Tweeting into the inter-webs that you just bought a new vacuum cleaner ist not social shopping.

True social online shopping starts way before people add their first item to a basket. It’s about actually connecting with people you care about, about sharing products and about finding inspiration from each other. It’s about reaching goals together and having fun along the way.

What it takes to win the social shopping game

The race is on. Social online shopping adds a dimension to the game that has been absent so far in the world of traditonal transactional online retail: network effects. Enabling online shoppers to connect for their shopping experience creates new bonds among customers as well as bonds between customers and brands. Once customers are connected with their friends in their own, personal “shopping group” on any shop, they have a permanent home for their shopping. Leaving to shop elsewhere would mean leaving their friends behind.

A famous McKinsey study on the consumer decision journey shows:

In today’s decision journey, consumer-driven marketing is increasingly important as customers seize control of the process and actively “pull” information helpful to them. Our research found that two-thirds of the touch points during the active-evaluation phase involve consumer-driven marketing activities, such as Internet reviews and word-of-mouth recommendations from friends and family, as well as in-store interactions and recollections of past experiences. [...] The change in the way consumers make decisions means that marketers must move aggressively beyond purely push-style communication and learn to influence consumer-driven touch points, such as word-of-mouth and Internet information sites. Strong performance at this point in the decision journey requires a mind-set shift from buying media to developing properties that attract consumers: digital assets such as Web sites about products, programs to foster word-of-mouth, and systems that customize advertising by viewing the context and the consumer.

So, how can you make sure that they choose your shop as their new home for shopping? It's just a small but powerful change in your mindset:

Stop thinking about customers as single users.

At Groupify we're living and breathing this mindest day in, day out. Based on McKinsey's Consumer Decision Journey Model we have developed a framework that allows retailers and brands to craft exceptional customer decision journeys. As a company providing the know-how and the software for retailers to...

  • create lasting connections among customers and their friends based on shopping

  • make your brand and shop the place where it all happens

  • eventually win the game in your industry

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