Optaros’ “Social Ecommerce Ebook” makes for great reading if you are trying to optimize the performance of your ecommerce site.  You can download it here.

They make the points that: 1. higher levels of shopper engagement on retail sites drive improved business performance, and 2. social commerce tools are a powerful way to drive engagement.

A couple highlights:  From the Harvard Business Review Article, “In Ecommerce, More is More“, they cite,

The majority of managers we spoke to in our global study told us they believe that a broad array of information diverts attention from the core offerings. But we found it helps customers search for solutions, invites them to think of all the ways the core products might add value to their lives, wins their loyalty, and entices them to buy. In fact, we found that exploiting consumers’ desire for engagement is the single dominant driver of superior shareholder value for e-commerce companies.

In the section titled “Making Shopping a Social Experience,” (p.44 on) they cite an article in the Wall Street Journal on the benefits of social shopping.  (The article features the positive results Teavana and Compsource are seeing from their TurnTo implementations!)  Their “Business Takeaway”:

People like to go shopping with others when shopping in person. With Facebook Connect and other social shopping applications, you can replicate this experience for your customers online.

The bottom line of their study (well, it’s actually more like the title): “Retailers Achieve Higher Conversion Rates Using Social Shopping.”

Data from comScore as reported in the Wall Street Journal shows holiday sales up 4% over last year.  Not bad considering the economy. But the growth appears to be driven largely by a huge increase in promotions:

“Data from Shoplocal.com show that online retailer promotion activity is continuing at a high rate with the number of offers in the last week up 21% versus a year ago,” said comScore Chairman Gian Fulgoni.

The strong sales numbers won’t mean much if the January headlines are all about the carnage from over-discounting.  (Remember the joke about making up for negative margin on volume?…)

I’d like to see an analysis that compares the cost of all that discounting to the cost of tools that could drive equal sales volume without compromising price.  For example, for a small percent of the cost of their holiday promotions, most retailers could dramatically expand initiatives like social shopping.  And in the end, their bottom lines might look a lot better.  Please comment if you know any work that looks at this.

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!

Here’s the full article: http://bit.ly/14Wl0n

And here’s what they have to say about us:

New York-based TurnTo Networks Inc., for example, which was launched in September, helps retailers link their customer accounts with social-networking accounts and email accounts using Facebook Connect and other tools. TurnTo charges retailers a percentage of the revenue from sales attributed to the system.

Tea retailer Teavana Corp. is a TurnTo client. Jay Allen, Teavana’s vice president of e-commerce, says the conversion rate—a measure of how many shoppers make purchases—for people who use the application is 20% higher than the rate for others, and their average orders are slightly more expensive.

TurnTo founder George Eberstadt says preliminary data for the company’s first 20 clients show that using TurnTo tends to increase conversion rates 20% to 50% and builds traffic to retailers’ sites. Some 700,000 new users, for instance, have come to computer retailer CompSource Inc.’s site through its TurnTo application since July. TurnTo is “a lot better than average” in terms of price per new customer compared with pay-per-click advertising, says Dean Bellone, CompSource’s president.

Peter Kim asked a handful of thought leaders in the social media space to give their predictions for the top trends of ‘09.  Here are a couple related to social commerce:

Charlene Li: Shopping Goes Social (also reprinted on her own blog)

After a devastating holiday season, retailers will eagerly seek a way to improve results other than driving demand with deeper discounts. One option they will investigate will be how to insert people and social connections into the buying process, illuminating and influencing for the first time the Black Hole Of Consideration. As they lick their wounds in the first half of 2009, retailers will watch from the sidelines as media companies implement open social technologies like Facebook Connect and the Open Social Platform. But as the holiday season launches early after Labor Day, shoppers will find options to see what friends are recommending, buying and rating integrated into the shopping experience.

Jeremiah Owyang: eCommerce Goes Social

The recession will force revenue results out of social technologies –marketing must prove its worth to actually changing the bottom line.  Although customer reviews are nothing new on popular eCommerce sites like eBay and Amazon, in most cases, consumers use the critiques from people they don’t know.  Now with connective technologies like Facebook Connect, Google FriendConnect, and OpenID, consumers will now be able to see reviews, experiences, and critiques from people they actually know and trust.  As a result, expect to see eCommerce widgets and applications appear in popular social networks, as well as when visiting existing eCommerce sites the ability to login with your Facebook or Google identity.  As an example, next time I’m shopping for a laptop, not only will I see reviews from editors and consumers, I will now know which one of my friends uses an Apple computer, and what they think of it.

The New York Times ran a piece today heralding the imminent arrival of Facebook Connect - significant as an indication of the huge expected impact of the feature.  My guess is that for brands and online merchants planning their social commerce strategy, the anticipation of Facebook Connect will be matched by an equal measure of head-scratching about how to make the best use of it.

Its predecessor, Beacon, had significant flaws.  But for merchants, it also had a particular beauty - clarity of purpose.  It did just one thing (sending “stories” to their customers’ Facebook pages so friends could see what those customers bought).  And it provided all the infrastructure needed to do that.  Just pop a bit of code here and there, and you were up and running.

Facebook Connect, on the other hand, is a tool kit which can be used in many possible ways.  In addition to posting stories back to Facebook, it offers the ability for shoppers to bring their Facebook friends with them to the merchant’s site.  Sounds exciting, but what does that really mean?  What features and applications should sites build around that capability?  And where does the technology to take advantage of this potential come from?

My belief is that the killer app for Facebook Connect for online commerce is going to be “trusted reference systems”.  If you sell online, and all-of-a-sudden you can know the friend-network of your shoppers, what is the most powerful use to which you can put that information on your site?  It is: to tell your shoppers what their friends have bought from you, while they are shopping.  Shoppers who see that friends buy from you are going to be more likely to do so, too.  They’ll get ideas from seeing what their friends have purchased, so they’ll buy more.  And they’ll be able to see who among their friends they can turn to for advice if they have questions, so their whole shopping experience will be improved.

We’re on the brink of a new phase in online commerce where brands and merchants of all sizes will be able to put applications driven by social graphs on their sites.  For those who take advantage of this opportunity, the potential to create value for their business is tremendous.  (Not to be coy, at TurnTo, we are excited to be the leading provider of turn-key trusted reference systems that make it a snap for sellers to add these social commerce features to their sites.  If you are wondering what Facebook Connect can mean to your business, we’d like to talk to you; please drop us a line.)