June 1, 2011, 10:15 AM

Sponsored Supplement - June 2011

Fastest-growing e-commerce technologies.

Retail's high-flying twins: mobile and social commerce
Two phenomena have disrupted online retailing in recent years: the explosion of smartphones following the introduction of Apple Inc.'s iPhone three years ago and the emergence of social networks as a central piece of the daily lives of millions of consumers. What's more, the two are increasingly intertwined as millions of consumers tweet their 140-character musings to Twitter and check their Facebook pages while commuting, standing in line at a store, walking the dog, and, yes, even while driving.

And they do much the same when out shopping. They can use their smartphones to check prices and consumer reviews while standing in a store, seek advice from friends, or locate other stores with the products that interest them.

Meanwhile, whether they're out or at home, they're sharing their opinions about products, brands and retailers with their social network friends. Those opinions travel fast around online social networks, and web retailers that aren't keeping up with the chatter can pay a price.

"For a retailer to not pay attention to social media and mobile commerce is foolhardy," says Diane Buzzeo, CEO and founder of Ability Commerce, provider of integrated e-commerce and personalization solutions whose services include building Facebook applications. "Mobile commerce spending totaled $1.2 billion in 2009, $3.4 billion in 2010 and is predicted to reach $119 billion globally in 2015. Facebook has 500 million active users; that's more than the population of the United States."

Social networks provide an opportunity for retailers to interact with consumers who are not in a bricks-and-mortar store at an e-commerce site. Retailers can use their Facebook fan pages, for example, to post news about the latest arrivals, sales and special offers, or helpful articles about ways to use the products they sell.

Get the scoop

"Consumers hang out on Facebook to get the latest news from a retailer they like, learn about daily deals or see what kind of products their friends like or what friends are saying about certain products and retailers," says Alex Schmelkin, president and co-founder of e-commerce design and engineering firm Alexander Interactive, or Ai. "A lot of consumers believe their presence on Facebook helps shape the decisions retailers make about their online business, so it is to the benefit of retailers to follow the chatter about their business in social networks and interact with consumers as necessary."

In addition to site design, Ai helps retailers create social networking strategies, provides rich media such as streaming video, and develops mobile commerce applications.

Opinions can travel fast across social networks, and alert retailers can use that real-time quality to create buzz. Placing a button on a product page that allows a consumer to post on the retailer's Facebook page that she "Likes" (in the increasingly ubiquitous Facebook sense of the term) the item is a way for retailers to highlight popular products.

"Making it possible to Like a product on Facebook is very similar to the customer writing a review, but a lot simpler and faster for the customer," says Michael Turcsanyi, president of e-commerce platform provider OrderDynamics.

Retailers can configure the Like It on Facebook option in several ways beyond placing a button on product pages. A web merchant can contact a customer after she has made a purchase and ask whether she wants to share information about it on Facebook, or make such a request after the customer has become a repeat buyer.

"Certain demographics are more prone to sharing items they like through social networks, so retailers need to dedicate the resources to managing the social channel to take advantage of how best to engage consumers through social networks," says Turcsanyi.

Helpful tweets

Because many consumers are commenting about retailers on social networks every day, tracking those comments can help retailers understand how shoppers perceive their brands and reach out to consumers making the comments.

For instance, if a consumer comments on Twitter that she's having trouble assembling a play set she just bought online, the retailer can respond by sending her a link to the assembly instructions.

"Social networks are a customer contact channel just like live chat, phone and e-mail, and retailers need to get their hands around how to use this technology as part of their contact center strategy," says Greg Fettes, CEO of contact center provider 24-7 Intouch.

At the same time, retailers, and their customer service representatives, need to keep in mind that, unlike a phone call with an agent, a social media interaction is one to many, not one to one. Even though the retailer may be addressing a single customer, everyone in her social network sees the exchange.

For example, a customer service agent must provide an accurate response to a consumer tweet that she is confused about the retailer's return policy. If the agent tweets back that the consumer can return the item within 30 days of purchase, no questions asked, when the policy is actually items can be brought back within 30 days only for a store credit, that misstatement can come back to haunt the retailer.

"When retailers make content about their return policies available through social networks, that information needs to be consistent with what's on their web site because a lot of people are going to see that information," says Fettes. "Inconsistent information posted on social networks can be used by the consumer to their advantage and even hurt the retailer's reputation."

Responding to requests for help or negative comments is an important part of using social media to create a dialog with consumers. "If a consumer says something positive about a consumer's brand, the retailer should respond that they appreciate the feedback," says Fettes. "Using the contact center to reach out to customers through social networks is a tremendous marketing opportunity for retailers to enhance the value of their brand."

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