Don't declare the death of F-Commerce just yet

News that several major retailers have recently shut down their Facebook stores has led to a lot of predictions about the death of f-Commerce (the term used for eCommerce on the World's biggest social networking platform and therefore the most visited website).

See this article on Bloomberg for a touch of hype generation (and link baiting... dammit):

http://www.bloomberg.com/news/2012-02-17/f-commerce-trips-as-gap-to-penney-shut-facebook-stores-retail.html 

One Forrester Researcher was also quoted as stating:

“There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop. But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

People please...... before we go around proclaiming the end of social commerce, can we please get a bit of perspective here?

Yes, it is true that some big US retailers such as Gap and Nordstrom have closed their Facebook retail channels. But it is still very early days for f-Commerce and a lot of companies are still finding their feet with this stuff. Its currently the same as web-based selling was back 10 or so years ago.

Back then customer confidence was low and the methods and tools & best-practice are still being learnt.

It is also true that users have a big security issue with using their credit cards via Social Networks:

http://mashable.com/2012/02/10/credit-card-information-social-network/ 

And even less trust Facebook stores to prevent fraud.

http://threatmetrix.com/study-reveals-only-a-quarter-of-consumers-trust-facebook-storefronts-to-prevent-fraud/

However the race hasn't been run yet. Given the speed of change in both the eCommerce and Social Networking space, I wouldn't declare the death of f-Commerce straight away. In fact Gap have stated: “We will continue to evaluate if this is something we want to bring back in the future”

My suggestion is therefore to ask yourself one simple question 

"does your Facebook store make a decent ROI without cannibalising other sales channels?". 

And if the answer is "Yes"...  then I suggest you keep it going.

Social Media - a platform for complaints

When everyone first got excited about the Social Media Goldrush back in 2008 - 2009 the same stories circled round and round. We all know them.... the Dell Hell blog, etc.
Things haven't got much better several years on. Recently, peeved about a new $5 monthly bank fee imposed by Bank of America, Molly Katchpole logged on to the Change.org website to start an online petition urging the bank to reconsider imposing monthly fees on debit card users. Quickly more than 300,000 people joined her  campaign demanding the bank drop what they saw as an monthly usage charge and the bank backed down. Many not credit Molly with eliminating debit card fees for the Bank of America and others.

Today's consumers are relentlessss with their expectations and complaints about brands - and with easy access to site like TripAdvisor (for travel users) and tools like Twitter, their words can go far. 

It seems that Social Media has now provided a platform for complains and potentially helps foster a Culture of Dissatisfaction online.

Aggregators - why they exist in specific markets

Meta search and aggregation (for the purpose of this article I'm saying these two are the same thing, although some may claim there are subtle differences) have grown over the last few years to be a dominant acquisiton force in a number of important online vertical markets.

Financial services, from credit cards through to insurance, are now subject to aggressive aggregation from a handful of major players such as: compare the market, go compare and moneysupermarket.

Utilities including: gas, electricity, mobile phone tariffs and broadband access are now compared online. In fact a lot of fuss and claims are made by the market leaders in this sector that they are championing your consumer cause (without obviously stating that your business with them helps their financial cause).

And travel has its obvious aggregation in the form of meta searches for: car hire, hotels, flights, etc.

Each aggregated vertical has its specific nuances and intricacies, plus each its own referral & commission structures, but in essence the the business model is the same:
a. Collate as many similar products or services as you can
b. Provide a single interface that qualifies the visitor's choice (usually by a series of form fields common to all parties)
c. Deliver the results in a consistent and comparable manner (usually cheapest first, but also allowing the user to filter some options)

Aggregators exist because two simple facts:
1. customers do not believe that they always get the cheapest rate for all products from one supplier
2. customers do not want to spend the time completing the same form on numerous sites

But why don't aggregators exist in other markets... such as fashion or FMCG products (e.g. washing powder and chocolate bars)?

Well, for fashion products, the usual reason is that products are exclusive to the manufacturer. Therefore because the channels to market are all protected (e.g. the manufacturer has some level of control over price and/or distribution) there is no real flexibility in the price. Then (assuming the brand site has eCommerce functionality), it is then typically just as cheap for users to shop from the brand site as it from a re-seller.

For FMCG the lack of aggregation is a different one, that of convenience. Most shoppers, when looking to source FMCG products go to a grocery store or supermarket. They also assume that the shop has done some sort of price comparison with the competition, so they don't have to (although prices may only be matched for the core 'basket' of goods and other less common items are still priced to maximize profits). Although sites such as http://www.mysupermarket.co.uk have sprung up to allow web users to compare grocery and health & beauty products from the leading retailers, people still either only visit one store or use one online supermarket at a time.

The question I have is... are there any remaining markets where aggregation is possible but has yet to take off?

The Physics of Social Media finances

Following my recent post on The Physics of Social Media, it has been pointed out to me that there's the distinct possibility that the finances of Social Media and social platforms are also subject to Newton's Third Law. This is the one that states "To every action there is always an equal and opposite reaction"

What does this mean?

Well, how many people these days use social networks and expect them to be free? Everyone, right?
But there's a problem with this.... The cost of developing, improving and running these sites isn't free. There's no such thing as a free lunch where website hosting is concerned. The cost of just hosting a social website like Facebook, with its approximate 700,000 - 800,000 users and billions of page views per day, is huge! (Annually estimated at $50 million in September 2010)
But someone has to pay for all this infrastructure.

Sites such as Facebook make a lot of their money by selling advertising space, in much the same way as Google or another search engine does. In the attention economy companies want to be where the eyeballs are and the more targetted they can make their advertising... the more they are prepared to pay.

So by giving more details about yourself, you are therefore allowing social networks to sell more specific advertising inventory to companies. They in-turn can pin=point your needs more.... or in other words, you're paying for their lunch (AKA the incredibly high valuations of these companies) by sharing your personal information with them. And somewhere within me that stirs a physical reaction.....

Social Business - the evolution of Social Media

Back in 2011, I did a presentation at the iShopKent 2011 event on the topic of Social Media. However rather than cover the usual stuff you see all the time (transparency, engagement, build a Facebook page, etc.) I triumphantly proclaimed the death of Social Media.Here's the presentation I gave that day and would welcome any feedback on the content (or your questions, if its not clear what I was talking about from the set of slides below)

View more PowerPoint from Hayden Sutherland

The cyclical nature of online marketing

One of my more typical observations is just how 'inter-connected' all
things digital have become. In other words.. when you affect one
thing, you stand a good chance of creating a knock-on effect with
something else.
Take this cyclical set as an example:
PR affects SEO
SEO affects Content
Content affects Pay-per-click (PPC)
Pay-per-click affects Conversion
Conversion affects Analytics
Analytics affects email
Email affects social media
Social Media affects PR
Have you seen any other similar cycles?

The future is responsive

PC's, tablets, mobiles and TV interfaces.... The list of devices used
to browse the Internet changes and increases all the time.

When designing and developing a new website, the common accepted
practice is that you start your user experience (UX) work first, based
upon how users with a PC and sometimes large tablets (e.g. the iPad),
might see things. Then depending upon the other popular devices used
to access your site, you then consider building an alternative
version.... say mobile.

But turn this concept on its head for a moment and consider the following:
1. Nobody fully knows what the future devices will be (up until 2
years ago the tablet market was virtually non-existent).
2. It is safe to predict that mobile devices will continue to grow in
use and that the available range will expand over time, as
manufacturers experiment and try to invent new form factors (in the
hope of finding a previously in-tapped customer need).
3. Bolting a mobile interface onto your existing site is hard work.
Some do fancy things with style sheets, while others just 'make the
buttons bigger' (yes this is a cheap and quick change, but not all
sites look good with chunky submit buttons, etc.).
4. Building a separate mobile-specific site is usually more work than
spending a little longer on your main one.
It is therefore unsurprising that I predict a future where a
significant number of company websites will no longer be developed
with a version for each specific device.... but a single one that
automatically adapts to the size and orientation of the devices used.
Note: I'm not talking about interfaces such as the Microsoft Metro
http://en.m.wikipedia.org/wiki/Metro_(design_language) design
language, which the software giant is successfully using across most
of its devices.

But this isn't a pipe dream for the far-off future, this is all
possible now using responsive site design & development techniques.
And soon it will be clients asking for this technology that will drive
its adoption, as they realise they don't need to spend a lot more
money building separate versions just for specific device profiles....
For examples, take a look at:
http://mediaqueri.es/
http://designmodo.com/responsive-design-examples/

RNIB serves bmibaby for inaccessible website

According to its website,the RNIB has served travel website bmibaby with legal proceedings. Apparently this is because it has a website that remains inaccessible to those using screen readers or those who can't use a mouse.
Yup, that's correct. After over a year of informing the company that has failed to make vital changes to its website to allow customers with sight loss to use their online services, the Royal National Institute of Blind People (RNIB) has decided to take the legal route.
It would seem from the online press release found on its own website that despite "receiving expert advice, recommendations and a full audit report from RNIB", bmibaby still hasn't made any real progress in this area. So RNIB has now served the company with legal proceedings.
The implications of this action are potentially huge. To date in the UK (that I'm aware of) there has been no public airing of the accessibility legislation all now wrapped up in the Equalities Act of 2010.
If this action does proceed, it could have far-reaching consequences for other high profile websites who continue to flout the legislation.
I think I can safely state that the eyes of the industry are now firmly focused on this case....
http://www.rnib.org.uk/aboutus/mediacentre/mediareleases/mediareleases2012/Pages/pressrelease27Jan2012.aspx