Web 2.0 Brings Shopping 3.0 and Just Forget Jupiter Research On This One

By Ross Hunter, Director of Operations, Hunter and Associates

How to make a buck on the Web

How are today’s Web shoppers buying? How should retailers try to sell to them? Recent reports on consumer trends offer contradictory indications. Fortunately I have the definitive answers for you anyway.

Sara Smith at ViaMetric alerted me to some of the state of play and it set me thinking. Let’s just quote her for an introduction:

“This ScanAlert report that everyone’s talking about shows that online customers are getting savvier, doing more comparison shopping and taking longer to make purchases. At the same time, a new study by JupiterResearch says merchants are learning that the wonders of social media don’t necessarily extend to directly increasing sales.” - Social Media Is Useless for Sales, Except When It Isn’t

Sara Smith goes on to cite the IT Social Media Index, a survey by the knowledgeable professionals at ITtoolbox, which shows that IT decision-makers are heavily influenced by social media, unlike the average consumer as portrayed by Jupiter.

The Jupiter report turned a few heads, and Christopher Kenton came right out and said it Looks Fishy. From the summaries published, the data seem capable of yielding conclusions that could go either way. As Sara Smith says, the data is pretty nuanced. But the headlines are stark.

Don’t play with those kids, they’re not your kind

Jupiter has chosen its interpretation as a warning to retailers: don’t spend money in social media sites such as MySpace and YouTube and expect this to result in directly attributable increased sales. That’s fair enough, but what about reputation management, what about share of mind, what about word of mouth?

Somewhat contradicting its main conclusion, Jupiter reports that social networking sites DO reaffirm purchasing decisions for many, with 29 per cent of respondents saying they make better decisions using them. Remember, this is the Web. Twenty-nine percent of anything today means a revolution tomorrow.

So should retailers even be in these community sites? Not if they’re looking for easy sales, no. But that advice applies to every locale on or off the Web. A long game of trustworthiness is being played in these places, and merchants will have to reinvent themselves a little to develop the instincts for this truest of all customer service, in my view.

Jupiter does well to advise merchants not to look for magic bullets in social media. But that doesn’t mean stay out. My advice would be, get in now, and learn how to use it. As I used to tell people back in the Nineties, you’re already late, but if you get on the Web now, a year from now you’ll already have been on it a year.

Meanwhile, back at the ecommerce site

There is typically a gap between a newcomer hitting your site and actually buying something from you. The ScanAlert data shows an increased lag between a consumer’s first visit to an ecommerce site and the eventual purchase. The gap has grown from 19 hours in 2005 to 34 hours today.

Marketing Sherpa, in first summarizing the report, said the shoppers seem to be going to comparison-shopping sites, and taking longer to research before choosing to buy. The warning here to merchants is obvious: don’t put too much faith in clickthroughs that bring traffic, spend a lot of effort on conversion hooks and landing page enhancement. Sherpa offers several tips on how to do this, check their story for lots of meat.

My question is where are these shoppers going - really - in their 34 hours of grace? Because if I were a merchant, I would definitely want to be there with them, in this initial period of trial separation.

They have more choices now of course, the Web has many more features. And people are very much busier than they were, with more fragmentation to their errands I suspect. But the shoppers are in charge of their shopping, this is the fundamental principle to grasp, always and forever.

Shoppers always window-shopped before they laid down their money. Our Hunter and Associates Market Snapshots from 2005 cited DoubleClick/ComScore describing shoppers searching in the engines first, and usually taking weeks before consummating the deal.

So should merchants schmooze with their customers outside the store?

I can see the Jupiter headline spreading across the Web saying that social media doesn’t help online sales, but even in the articles that propagate this meme there’s material that indicates the opposite. The E-Commerce Times article about this includes a case study of an online jeweler who’s experimenting on YouTube with very encouraging results.

And by the way ask Hugh McLeod how he rates his blog networking effort for driving up sales of his client’s wine.

The problem is that very few businesses of any size greater than corner-shop really know how to deliver customer service, or how to capture and retain customers. And every new mechanism unveiled on the Internet has demonstrated failing upon failing of business practice, failings previously obscured in the brick world, and now displayed in hard metrics on the Web.

Social media’s just the same, business is still learning how to do it right. It’s all about niche, as Jupiter says. This is what true customer service does of course, it creates a niche around you.

Bring on the future, give us Shopping 3.0

What we need to shake out of this gloom is a touch of the future, and Joe Chung in CRM Buyer gives it to us this week with a picture of the new shopping, Shopping 3.0, coming to our worlds, ah, right about now. Here’s the summary:

“Shopping in the 3.0 era will move from a solitary, utilitarian task built around convenience to a destination activity where consumers specifically seek out the sites that offer rich, entertaining and exciting experiences that they can share with their friends and families.” - Shopping 3.0: Embracing Change in the New E-Commerce Era

Now, doesn’t that sound more like it? Give the piece a read, and enjoy all the scenarios that Joe Chung outlines for us. He’s not afraid to call it like it’s actually being built right now:

“With the continuing breakup of mass media, the Internet is taking center stage as the dominant channel for brand awareness both through explicit advertising and marketing, and also through implicit word-of-mouth buzz driven by the Web’s flourishing social communication and networking facilities.”

That’s right. And even more than that, there’s danger in every shadow, and a serious merchant probably doesn’t have time to spend on reports - the serious people are already in there, with their sleeves rolled up, figuring how to work this thing:

“The Internet is very much a double-edged sword. On the one hand, it is an extraordinarily powerful mechanism for direct interaction and sales with consumers, but on the other, it enables new and old upstarts to insert themselves, as they wish, into a marketing and shopping life cycle that was once the retailer’s exclusive province. Because we no longer have control over how shoppers are being led to retail brands, there is significant danger that our brands will be devalued by others who grab the lion’s share of engagement before the shopper ever reaches our sites.”

Thank goodness for Joe Chung’s article. Because the real meaning behind all that ScanAlert and Jupiter alarmism is that something is happening here, and you don’t know what it is, do you Mister Jones?