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A great perspective on what social commerce really means

November 10, 2009 by George Eberstadt

Paul Dunay, The Global Managing Director for Services and Social Media at Avaya, gave this description of social commerce in an interview in eMarketer:

Social commerce is working with or using your social graph, which is defined as your followers or your friends, and allowing them to help you make buying decisions. Social commerce can be anything from a buying suggestion or recommendation—perhaps a tweet from a Dell outlet saying, “Hey, we have a special on this”—to something like Facebook Connect. Facebook Connect would allow you to go to a Website like Dell.com and authenticate yourself using your Facebook profile, allow your identity to be known and access your friends so you could spark up a chat. So I could say, “Hey, Jeff, I’m looking at this new fancy laptop or this netbook. I heard you bought something. Would you recommend this to me?” So you could almost take your friends shopping with you. That is the potential with this example.

Hey Paul, come look at the sites using TurnTo.  Your vision is alive today!

eMarketer: People trust friends more than they do bloggers

June 22, 2009 by George Eberstadt

Word-of-mouth has a radically greater impact on purchase behavior when it comes from friends than from strangers (like bloggers), according to a Mintel survey of buying behavior, just cited in eMarketer,

eMarketer says: “While bloggers may bring buzz to a product, converting the buzz to sales is another matter.”

“It’s interesting to find that as much time as we spend online, we still prefer a personal recommendation from someone we know and trust,” said Chris Haack of Mintel.

Here’s their data:

Person-to-person product recommendations: most influential on buyers, prefered by recommenders

December 12, 2008 by George Eberstadt

A couple recent studies by BIGresearch that look at purchase influence factors across all media – traditional and online – shed further light on the importance of the personal advice network.  As a pair, they paint an interesting picture: person-to-person product recommendations are the #1 influence factor on buyers (at least for a number of product categories), and they are the preferred way for recommenders to deliver their advice.

One study, conducted for the Retail Advertising and Marketing Association,  shows that word-of-mouth is the top influence channel for electronics (44.4%) and apparel purchases (34.3%).  In electronics, product reviews came in second (36.8%) and retail advertising inserts came in third (29.2%).  In apparel, retail advertising inserts came in second (33.3%) and in-store promotions came in third (30.4%).

The other, reprinted in eMarketer, shows that across all age groups, the primary means through which people communicate product recommendations are the traditional ones – face-to-face, email, and phone – with blogs and communities far behind.  What’s significant here is that the leaders are primarily point-to-point channels, not mass communications channels, highlighting that people with advice to offer prefer to deliver it directly to the person who needs it.  (OK, people could be email blasting their product recommendations to their friends, but I suspect the dominant mode here is more targeted.)