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I gave this presentation at the MIT Enterprise Forum of NY a year and a half ago.  The NY Times Bits blog piece today on comments by Venrock’s Brian Ascher about the “Right Time Web” made me dust it off.  I tidied it up a bit (but not much).  My predictions about the imminent arrival of the “Trusted Reference” model in the e-commerce world were at least a year too soon - I left those unchanged.  (Brian’s colleague David Pakman also blogged about this in the spring.)

Amazon has just hooked up with Facebook to add social shopping features powered by the shopper’s Facebook friends list.  (NY Times article. WSJ article.)  My guess is that this will prove to be the watershed moment for social commerce.  Where Amazon leads, others follow.  Amazon pioneered customer ratings and reviews, which are now found on commerce sites across the web.  Amazon pioneered community cross-sell tools (”customers who looked at this also looked at that”, “customers who bought this also bought that”), which are now provided to online merchants by at least half a dozen vendors.  And while Amazon may not have pioneered the integration of 3rd-party social graphs into online stores (we’ve been at this for a few years), the ecommerce world is likely to take its cues from Amazon in this area, too.

Here’s what it looks like on my Amazon profile page:

And this is just their initial feature set; lots more must be just around the corner.  Merchants interested in the potential of “on-site social commerce” should check out what Amazon has done here and keep an eye on where they go next.

(For those interested in archeology: before Facebook built the one-social-graph-to-rule-them-all, Amazon had social-graph-building aspirations of their own.  They called it “Amazon Friends and Interesting People.”  Dig here to learn more.)

It’s a big day at TurnTo: we’re introducing our Social Commerce Suite.  (Yes, we know that it’s ambitious to call it a “Suite” with just 2 products – please humor us. Also, there’s more in the pipeline…) Official press release here.

So what’s new? 1. We’ve done a nearly complete overhaul of our current product, now branded “Social Merchandising” and 2. We’re introducing a new product called “Social Purchase Sharing”.

Social Merchandising. We’ve made improvements top to bottom.

• Shoppers who open the widget but don’t personalize it by checking for friends will now see a range of other customers and their purchases designed to give the site that buzzing busy-store feeling and to encourage consideration and purchase of more items. (The goal is to address one of the big limitations of the shopping online: lots of stuff in the stores, but no people.)  We’ve built a ranking engine that selects which customers and which items to show, ensuring the greatest relevance given limited data.
• We’ve made the value and process of personalizing the widget a lot more transparent to the user, so many more of those who open the widget will go the next step and personalize it to see their own friends in place of those the system picks. Underlying this is a simplification of the sharing rules to a vanilla Twitter-style “follow” model. (See our last post about the importance of simplicity when it comes to privacy and sharing.) We’ve also switched to delegated login for most of the friend list sources we support, including the newest Facebook protocols. (The short explanation: it’s better.)
• The widget now shows big, attractive product images throughout, so not only are shoppers seeing which of their friends also shop at that store, the purchases those friends made look particularly inviting.  Good for cross-sell and order size improvement.
• The comment mechanism has been redone to both capture more input from buyers and to show it more visibly to shoppers.
• We’ve made significant enhancements to the guts of the system to provide greater speed and reliability. These include use of a Content Delivery Network as well as a range of server-side caching and summarizing strategies. The design point was to be able to support the largest ecommerce sites out there.
• We’ve added new tools for optimizing the button that calls up the widget. It doesn’t do stores any good to have a fabulous social merchandising tool if only a few shoppers use it. We now provide a range of more interactive button designs as well as tools for doing rotation tests (randomized A/B/C tests) of alternatives. In its initial use, we’ve already seen large engagement rate improvements.

In a nutshell: you have to see it. So here’s the first screen shot we’ve released:

Social Purchase Sharing. Our partner merchants have been telling us how valuable it is when a customer posts to their social network (most often Facebook and Twitter) about their purchase. So we’ve added a simple tool to significantly increase the amount of purchase sharing online stores can generate. It’s an overlay that appears on the order confirmation page right after a purchase and makes a clear, persuasive appeal to share. The permission obtained from the buyer is also used to power the Social Merchandising widget, so the “sharing” appears both on the social networks and on the store site itself. Here’s an example of the overlay – just picture it on top of your order confirmation page. (See also our blog post on “Like” vs. “Bought”.

The TurnTo Social Commerce Suite will be generally available to online retailers at the beginning of Q3, 2010.

If you are in Chicago this week for the Internet Retailer show (IRCE), please come by booth #431 and we’ll give you a full demo.

If you’d like more information on the thinking that went into these products, please have a look at the white paper we just released: Onsite Social for Online Commerce.

After over a year in the market helping a few dozen innovative online retailers add social shopping features to their stores, we thought it was time to synthesize and share the big lessons we’ve learned.  So here [drumroll] is our new whitepaper: Onsite Social for Online Commerce.  In it, we get specific about things like:

• How to leverage social networks for Social Merchandising within your store
• How to most effectively encourage shoppers to share news of their purchases with their social network friends
• Why adding Social to ecommerce sites requires different strategies than for content sites
• What sort of results are realistic to expect

We’re just putting it out there - no registration required to get it.  If you find it thought-provoking, we hope you’ll get in touch with us and pass it on to others.  Enjoy!

Here is the conversion lift data for the larger sites using TurnTo for the last couple months.  We’re comparing the baseline conversion rate for the site to the conversion rate for shoppers who interacted with the TurnTo system at some point in their shopping path on the site.  The 2-7X lift factors we were seeing in the first couple months of the year are still evident.

First: we wholeheartedly agree with the ideas underlying Facebook’s big announcements today. People want to be able to interact with their friends on sites all across the web, not just within Facebook.  And sites don’t all want to have to become Facebook apps to support this.

TurnTo has been working to enable contextual delivery of social networks on ecommerce sites since our founding in 2007.  And we’ve proved that the benefits for both shoppers and merchants are significant.  So we applaud Facebook, appreciate the validation that their heading in this direction provides, and are already hard at work incorporating their new API.

We also think that to derive maximum advantage from an Onsite Social strategy, ecommerce sites should not rely exclusively on the new Like-based functions that Facebook is providing, but should - more importantly - leverage their purchase transaction data.  Here’s why:

It’s useful for your shoppers to see which of their friends know about your store and the products you sell.  Facebook’s API takes care of the problem of determining who you shoppers’ friends are.  But how do you determine what those friends know about?  Facebook’s new Like button lets shoppers register a connection to items on your store that they, well, like.  But Like does not equal know-about.  And many people who buy from you - and therefore REALLY know about you and your products, will never click Like.  In other words, there will be loads of false positives and false negatives.

If you were a content site, this might be the best you can do.  But as a commerce site, you have a unique asset: the purchase transaction.  You already have a massive set of people who really do know about you and your products, and the list grows every day.  They’re called: customers.

So go ahead and use the new Facebook plugins.  But also, and more importantly, leverage your transactional data to socialize the shopping experience on your site.  That’s where the big opportunity lies.

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.”

There’s a session at the next ANA Shopper Marketing Committee I’d really like to attend.  (But I’m not a member - sigh…  If you are a member, you can find it here.)  The point of the session is so important for multi-channel retailers, I’m copying the description here.  I’d put it this way: don’t just use your web presence to sell; use it to create a connection to your brand that will bridge from your site all the way to your store.  One of the most powerful ways you can do this is with social merchanising tools (like TurnTo) that show visitors that their friends are also customers.

11:30AM- How Shoppers Shop: The vast majority of shoppers conduct research before they go to store, with an increasing proportion of them spending time online, not only looking for deals, but also getting recommendations from friends, looking at product reviews, and comparing product information. Moreover, online research and recommendations are having a greater impact on what makes it onto shopping lists. With roughly half of women indicating that they have purchased products based on recommendations from friends, viral marketing represents an important opportunity to engage shoppers before they go to the store. While significant attention has been paid to the roughly two thirds of brand decisions that are made in the store, the growth in digital shopper marketing represents a major opportunity to increase preference and purchase intent earlier along the path to purchase.

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.

Most of the focus on social shopping has been on how stores can build a presence on Facebook and Twitter.  But new research from BIGResearch for Shop.Org suggests this is backwards.  Online stores will likely benefit far more from bringing the social networks of their shoppers into the buying experience within the store.  Here’s why:

[Social networks] are rarely the starting point for shopping per se. When we asked consumers, “Where do you typically start your online shopping? (Check all that apply)”, consumers told us that they are most likely to start their online shopping at merchant Web sites (almost three-quarters), search engines / directories (one third), and catalogs or offline stores (about a quarter) — with social media sites trailing far behind.

So if you want to truly tap into the power of your customer base and the social network of your shoppers to influence purchases, do it ON YOUR SITE.  That’s where real buyers come to do their research.  And that means leveraging tools like Facebook Connect to make all that social data available to shoppers when they’re really in-market.  (TurnTo can make this easy.)

Here’s data from the report, available here. (You must be a Shop.Org member for access.)