How does social media impact the retail landscape today, and how will this affect social commerce in the future? In November, Visa Europe France invited a panel of business experts and thought leaders to the Crédit Agricole incubator to help answer this question. The event was the 7th in our Innovation Conference Cycle, and we’ve pulled together some of the key talking points for you right here:
The Digital era
Henri Isaac, Vice President in charge of Digital at Paris-Dauphine University: “Commerce is already a social activity”. He mentions neighbourhood markets where people enjoy going to chat with their neighbours and stall-keepers as well as simply shopping. Similarly, the challenge for retailers is to enhance consumers’ shopping experience – On and off-line.
Find the consumers wherever they are
According to a Global Web Index report from January 2015, Europeans spend 80% of the time spent on their phones on social networks – Primarily Facebook, Pinterest, Instagram and Twitter – which radically changes their relationship to brands and to shopping. According to Vincent Fraitot, Managing Director of Vente-Privée Consulting, while social commerce is part of Digital pure players DNA, brick & mortar retailers must learn to include social media in their marketing and communication strategies. This means setting clear objectives and identifying the best social network(s) to achieve them.
Make social commerce from A to Z
The question is not if your shopping experience should be social. The question is how to make the best use of social media at every step.
Several trends have emerged:
- Community interaction before and after a purchase. Some websites invite visitors to try out products using simulators – and encourage them to share the resulting snapshots with their friends. Others create avatars to help consumers choose or to provide customer care. These services make shopping more interactive, entertaining, and, crucially, shareable.
- Social commerce strategies. Brands should have two objectives when they use social media: to build loyalty through special offers and to acquire new customers (particularly true for online-only brands). Pinterest and Instagram are increasingly popular ways of creating brand environments – particularly for stylists – that consumers identify with. They’ve been shown to generate qualified leads to brand websites and encourage shoppers to go complete the checkout process.
- The “commercialisation” of social media. “Buy” buttons and other in-page purchase functionality now appears across major social networks, so people can shop directly on each platform.
The rise of social networks is also changing the rules of media buying. It costs less to advertise on Facebook, Instagram or Pinterest than to buy keywords on search engines, which in turn is cheaper than investing in traditional media. Marketing and Communication departments need to strike the right balance to maximise their return on investment. Facebook’s Emmanuel Marill made the point that they must also go to where their customers are and then retain them. Henri Isaac also pointed out that brands no longer have a centralised product catalogue on a single website: they are wherever their customers are.
Direct payment on social networks – particularly through in-page “buy” buttons linked to the merchant’s website or to a secure portal to finalise the transaction – is still in its early stages. But initiatives in North America indicate that this may be the future. Facebook’s recent announcements regarding Messenger services show that social networks have decided to move onto the World of Payments. As consumers, do we want social networks to become full-fledged players in e-payment and social commerce? And won’t merchants lose direct contact with consumers (and their data) on their websites? This is already happening with the increasingly popular marketplaces.
Trust is a must
A simple customer journey is, clearly, very important. But the security of consumers’ payment data is absolutely imperative, both in-store and online. Brands are exploring various strategies, but they all have one thing in common: the need for a trusted environment involving all financial stakeholders. This is also true for the consumer, who will decide with whom to share his/her data. And for the merchant, who must choose the intermediary platforms based on their level of fraud protection: a business-critical factor, says Menlook CMO David Nedzela, who would be willing to pay more for an intermediary that would help bear the risk of fraud.
Trust is a winning argument for Visa Europe and for banks, which have established themselves years ago as legitimate and trustworthy custodians of payment security and reliability.
Our panel of thought leaders and experts included: Vincent Fraitot, Managing Director of Vente-Privee Consulting, Henri Isaac, Vice President in charge of Digital Technology at Paris-Dauphine University, Emmanuel Marril, Client Partner at Facebook and David Nedzela, Chief Marketing Officer of Menlook.