Apple, Facebook and Beyoncé provide the first real social commerce case study

On 12Dec Beyoncé released her new album exclusively on iTunes without any hype or pre-release marketing. The announcement came on Instagram when Beyoncé released a fifteen-second video showing clips of her new album, followed by a Facebook post with a link to the iTunes page to download songs and videos.

Surprise!

A post shared by Beyoncé (@beyonce) on

Without a doubt, within seconds of the announcement the whole social media world erupted with a buzz around the new album and iTunes crashed due to overwhelming demand for her music.
https://twitter.com/ShreyaMehta_/status/411475919136915456

Everyone from the media to fellow celebrities jumped on the bandwagon to endorse the star and so get more eyeballs on their respective profiles and websites.

Fans too went crazy about the surprise gift for them just before Christmas from their favourite artist. They were in awe of the subtleness of this launch with no advertising and hoopla. In fact even Beyoncé critics were forced to accept this genius marketing move and were full of praise.


What does this mean for digital marketers and social commerce?

Apple (iTunes) and Facebook (Instagram), with Beyoncé, have given us the first pure social commerce case study, as this whole experience, from announcing her new album on Instagram & Facebook and releasing it on iTunes with an eruption of follow up word of mouth buzz on Twitter, did not use any traditional means of selling products and services. And yet it managed to:

1) Supersede traditional marketing channels such as newspapers, magazines, music blogs, radios and online advertising.

2) Bypass traditional commerce channels that force you to register your personal and payment details before the transaction.

3) Be a real time experience with ubiquitous accessibility and capture pre-holiday impulse buying.

I know, these are early days for social commerce, as Beyoncé is already a world famous artist, and getting huge attention on social media and exclusive deals with iTunes have made this release an overnight sensation.

And, there is strong possibility that Tim Cook and Mark Zuckerberg, along with Jay-Z, put together a deal behind the scenes in order to put Instagram and iTunes on the social commerce map, but this experience has been a lesson to digital marketers on the future of commerce, where on demand accessibility with a personal touch will define product and service monetisation, and traditional means of expensive and cumbersome advertising and transactions will have no place.

Advertisements

Is it really mobile vs. social or mobile + social = commerce?

As soon as the black Friday commerce data was published with a thumbs up to mobile commerce and a hard beating to social commerce, people started doubting all the hype surrounded social commerce! In a way this thrashing can be justified, as businesses are now expecting significant return on investment after spending substantial amounts of money on social media marketing, from paying consultants to running guerrilla campaigns to engaging people via this medium.



Black Friday Commerce Stats

On the other hand, an introduction of smartphones and tablets has hugely boosted the mobile commerce numbers and if you believe the pundits, by 2015 every 3rd online transaction will happen via mobile device and every second offline buyer will check goods prices on a phone before buying it in the shop!



And as a result of this, every online and offline retailer is vigorously competing to introduce apps with all the latest technologies, such as voice recognition, Image and barcode scanning, to win mobile-savvy customers and to support mobile payments; meanwhile, all remittance suppliers are surging ahead with one-click mobile payment technology!

Which means, if John Smith wants to buy a tie he’s just seen in a magazine or website, he will scan that on his phone to check best available price and buy in one click to be delivered next or same day to him! i.e., the convenience at the best for price sensitive customers!!

So the question is – in this mobile and app commerce world, where does the social commerce fit, or is there any room for the social-verse when all swords are out for Social ROI? And the answer is – definitely social commerce is going to prevail due to simple reason that, we gradually start spending more of our online time on social media networks,those have become our second point of contact when we are watching TV, dinning at restaurants, shopping at mauls or even spending time with friends.

However, there will be a transition, or perhaps it’s already happening, from finding information (or products) on social media to eventually buying the product from that medium! Currently even social media networks from Facebook to Twitter to Google+ to Pinterest are positioning themselves as information gateways, so that when it comes to finding the best shopping trends, images, ratings and reviews, many look at their social universe but still buy on at non-social network platform ranging from Amazon to eBay.And for businesses social media is the place to collect data as thousands of people around many platforms are talking and sharing views continuously about their products!



I think the next stage would be, or perhaps already is, that we will be able to buy desired products from purely social networks rather than using them just as pre- and post-sale discovery tools.


However, I am not a firm believer in an app economy i.e. I don’t believe that apps running on social media will be the main tool of its transition from discovery to transaction tool.


But, if Facebook, Twitter and especially Pinterest can become pure marketplace for both suppliers and consumers, yet maintain consumer privacy and business identity, than they have a winning formula.
And, to a certain extent, Facebook, Google, Twitter and Pinterest brand pages, widgets and APIs are gradually building social interest and knowledge, and professional graphs, which are the right steps in social commerce directions, where both businesses and consumers can interact and know each other. However transactions with payment are still a stumbling block as these networks don’t have their users’ credit card info, which means that to make payment on social networks, both suppliers and consumers needs to seek third party help.

I think here Apple, Amazon or eBay, with millions of consumers’ credit card details, are in very advantageous position, and if they somehow manage to amalgamate social media to their platforms, then we have winner too! But Apple, with Ping, has already burnt their hand in this area – eBay is currently going all image driven (like Pinterest)– results are yet to be seen! And Amazon reviews remain one of the most prominent places to find product information, but not the place to hang out with friends!

Overall even, if we know the winning formula for Social Commerce is eBay + Facebook, there are still a few very hard yards to cover to reach this stage. We all know that just as we don’t hang out with friends in shops and don’t buy goods in restaurants or bars, it would be a humongous task to mix social and ecommerce sites, but I am sure we are not far now from a time when we will have the technology to mix these two, leaving buyers’ privacy and business identity intact. And while this transition will take place, mobile will become (or has already become) the prime device to find and buy products and services. Which means the formula for successful monetisation would be mobile device + social network = commerce!

Facebook SWOT Analysis via Twitter Timeline!

STRENGTHS












WEAKNESS
























OPPORTUNITIES















THREATS






One Billion Facebook users not enough to make $100bn company

Congratulations to Facebook on reaching one billion users milestone, this is undoubtedly an huge achievement and must be accoladed whole heartedly!

But I might be wrong, it seems to me that Zuckerberg has carried away with sheer number of users and good words from a stalwart like Steve Jobs about his stubbornness to remain product focussed and not interest based revenue-centric, and although he ended up building the best social network platform, so far he has failed to leverage it for shareholders (shares are already down by 40+%).


And when he really tried to please them by launching various FB apps and bombarding users with ads, sponsored status and promoted stories, users become disgruntled about a timeline so full of commercial page links that they have become more listener than participant, and are confused as to why they need so many apps to manage their accounts!



So what exactly went wrong with Facebook? I think, they followed Apple theory too religiously; they built beautiful product (like all iProducts) and then tried to control their ecosystem (Like App Store) in order to monetise it – but can Facebook really follow a purely Apple model?
I don’t think so. Why? Firstly, they don’t have ‘must have’ products for users – social engagement can be substituted or complimented by email, SMS, phone, or via rival networks. Users of iPhones and iPads have no choice but to use Apple by-products, only be available on their devices, including the highly deprecated iMap on IOS6! Whereas they have many choices and no compulsion when it comes to using Facebook and its applications.

In other words, Facebook can’t really push things on their users; it should try to build on what is already working, like Zynga games, Spotify music sharing, or the recently launched Facebook Gift!



I think Facebook Gifts are a great idea and can replace the way we do transactions, specially buying products for family, friends and loved ones – because stats suggests 80+% of us like to buy things from word of mouth recommendations or friends’ suggestions – and there is no better place than Facebook to get recommendations from friends.

In summary Facebook needs to build products with tightly coupled commerce ability not push advertising like pages you may like, sponsored posts or sponsored stories. Along with Facebook gifts (i.e. currency, or credit) let’s build a more open ecosystem for developers so that Zynga- and Spotify-like companies can build really lucrative communities to pour some money in and make Facebook a $100bn company!

Will @twitterAPI support social CRM and Analytics, as promised?

Lately Dick Costolo (CEO @Twitter) has been vigorously advocating at various podiums (Charlie Ross Show and Online News Association Conference Awards Banquet) about the twitter API policy changes, and, to certain extend , I agree with their policy to stop encouraging developers (or hackers) to create a twitter-like experience somewhere else.

OK, now we have bought this idea, but then why is Twitter not giving users (i.e. tweeps) exactly the same experience with their various client interfaces, from iPad, iPhone, Android to web? For example, on the web they don’t have Retweet (RT) with a quote option and some mobile clients don’t have $tag hyperlinks. And then they have no analytics (for non-twitter advertising subscribers) associated, apart from number of RT and favourites.

Also in Michael Sippey’s (Product person @ Twitter) blog posting to introduce API changes seems to encourage developers to build something on top of Twitter such as social CRM and analytics tools, but if Twitter is really serious about that, then why don’t they take API rate limitation off, or why do they suspend accounts if you do too many @mentions?


These limitations are the biggest hindrance in creating a meaningful conversation with tweeps. I know Twitter can argue that unlimited API usage and @mentions can cause spamming, but all marketers can agree that information overload can occur in a variety of media and can’t really can be controlled by some rate limit or usage checks! Can Twitter control spamming via API authentication and subsequent usage analysis checks? How about Twitter opening their ads API (as Google did with ad words) to developers, which would give huge opportunities for developers to create a true commerce experience on twitter!

We know @twitter is free tool and they still have a more open ecosystem than FB, G+, Pintrest and LinkedIn, and if I put my developer’s hat on, it is not easy to manage (free) API usage for thousands of hackers who are hungry for the opportunity to create as many as disruptions as possible and to enjoy and prove their creative skills, but what Twitter has to realise is that the amount of content they generate every second, they cannot manage and monetise alone; therefore rather then that abundance of info go in waste, it should be open to use for developers to turn Twitter into a true social engagement system.

In the end, OK Twitter, don’t let us create a Twitter client-like experience, but, as promised, give us tool to build a Twitter analytics and relationship management system so that we both developer and Twitter can carry on growing and become the best social CRM and content management tool!