Theme

4. Theme Social retail is creating new opportunities for selling . . . and shopping

5. Agenda • What is social computing? • The realities of social retail • Mapping the social retail trendsetters • Influencing the influencers: How to harness the value of social retail

6. Search engines C2C Commerce Social networks Blogs P2P file sharing User review portals Open Source S/W RSS Comparison shopping Wikis / collaboration Podcasting Tagging Social Computing

7. Technology is moving away from firms

8. Technology is moving away from firms

9. Publish a blog Publish your own Web pages Upload video you created Upload audio/music you created Write articles or stories and post them Post ratings/reviews of products or services Comment on someone else’s blog Contribute to online forums Contribute to/edit articles in a wiki Use RSS feeds Add “tags” to Web pages or photos “Vote” for Web sites online Maintain profile on a social networking site Visit social networking sites Read blogs Watch video from other users Listen to podcasts Read online forums Read customer ratings/reviews Not using any social technologies The ladder of participation Creators Critics Collectors Joiners Spectators Inactives

10. S R P V T L L U Online shopping has grown rapidly in the past few years, particularly in Sweden and the Netherlands “Have you bought any products or services online in the past three months?” Germany and the UK still account for 60% of Europe’s online shoppers 4.4m 23m 6.7m 31m 16m 7.2m 4.5m Base: At least 22,102 European net users (16+) Source: Forrester's Consumer Technology Adoption Study, 2004 to 2007

11. Shoppers use of social computing is on the rise Percentage of online consumers who use these technologies monthly or more often Base: EU-7 online shoppers Source: Forrester’s Consumer Techno graphics, 2005-2007

12. Agenda • What is social computing? • The realities of social retail • Mapping the social retail trendsetters • Influencing the influencers: How to harness the value of social retail

13. What is impact on eCommerce?Social networks drive more site traffic than search: Topshop.com Source: Spannerworks / Topshop. Data compiled from Hitwise site traffic.

14. Consumer reviews drive hard conversions Highly reviewed products receive more attention from both consumers and retailers, ultimately leading to higher sales Impact of review volume on conversion 1 to 9 10 to 24 25+ No reviews Source: Bazaarvoice. Data compiled from Bazaarvoice customers.

15. Reviews also achieve lower product returns Returns can reduce a manufacturer’s profitability by an average of 3.8% Impact of review volume on returns Source: Bazaarvoice. Data compiled from Bazaarvoice customers.

16. We call this social retailing • The use of social tools, platforms, and networks around products and services to create “virtual neighborhoods” of consumers that are better informed and better organized in terms of their buying behavior.

17. Many retailers haven’t got there yet “Do you use a recommendation engine?” Base: 22 European multichannel retailers

18. Most retailers lag way behind “In what ways do you currently or willing to use Social Computing technologies?” Base: 122 European luxury brand retailers

19. Many outright ignore this trend “In what ways do you currently use Social Computing Web 2.0 technologies?” Base: 122 European luxury brand retailers

20. Agenda • What is social computing? • The realities of social retail • Mapping the social retail trendsetters • Influencing the influencers: How to harness the value of social retail

21. How you should think about these social retail engagement tools High RIA Virtual worlds Recommendation engines Mobile Location Services Niche Communities – User Generated Content Podcasts Personal Assistants Technical Complexity Searchandising – Faceted Search Social networks Crowd Sourcing Customer ratings and reviews Wikis Low Blogs Direct to consumer sales Channel indirect sales

22. 1. Ratings and reviews: The top-rated shopping paths drive direct sales Bass Pro Shops customers that browse top- rated products have a 59% higher conversion rate and spend 16% more than the average shopper.

23. 2. Searchandising and Faceted Search Implemented July ’07 – 40% of searches result in correct product placed at top of site; overall hard conversions increased over 10%. Source: ComputerWorld UK report on Smart searching, Nov 19, 2007

24. Agenda • What is social computing? • The realities of social retail • Mapping the social retail trendsetters • Influencing the influencers: How to harness the value of social retail

25. Why? Data indicates you will increase conversions, plus . . . • Cross-sell and upsell • Basket size • Loyalty • Service levels • Satisfaction • Positive experience and word of mouth • Brand presence

26. What should you do about this? Define clear business goals There is little point marketing or merchandising with social technologies unless you know what you want to achieve Traffic to your Web site (What for?) Registrations (What will you do with them?) Advertising/eCommerce/subscription revenues (How much?) Customer relationship management (How will you manage the data?) Market and social retail mapping research (Where and who for?) Media publicity and PR (How will you measure?)

27. The right tactics increase your chances of success 1. Be a thought leader — provide valuable and interesting content and tools 2. Be authentic and transparent — otherwise members will reject you 3. Create lots of links — to “friends” and related content 4. Encourage people to contact you — and always follow up 5. Participate — lead and organise groups and discussions 6. Make it easy to find you — domain name, keywords, tagging, and bookmarks 7. Experiment — try things out

29. Thank you Victoria Bracewell Lewis +44 (0)20 7631 0202 vbracewelllewis@forrester.co.uk www.forrester.com