4 Takeaways from the 2011 Shop.org Annual Summit

Janrain Shop.org AttendeesLast week, a team of six Janrainers descended upon Boston for the Shop.org Annual Summit. The event brought together over 3,000 online retailers and solutions providers for three days of learning, networking and of course, awesome free stuff from technology vendors.

The sessions were rich with insight, and several common themes emerged during our discussions with retailers at the event.

Social Commerce is Taking Place On-Site

Social commerce initiatives today are mostly experimental. That said, companies like Sears, Levi’s and Ticketmaster are integrating the best parts of the in-store shopping experience into their sites by leveraging social media for product discovery.

While commerce on Facebook (F-Commerce) is interesting, some perceive its role to be no more than a complementary sales channel. The lack of search engine discoverability, robust merchandising capabilities and deep customer intelligence are causing retailers to explore ways to integrate social media into existing assets. Social commerce discussions at the event primarily focused on how to integrate APIs and social widgets from Facebook and other networks into the on-site shopping experience.

Contextual Social Sharing Drives Results

Retailers that are successfully driving word of mouth, qualified referrals and new business from social sharing understand that simply placing a “share this” button on a product page does not always yield optimal results. Context is key, and people are more likely to share if the option is presented in relevant ways during the shopping experience.

Handbags.com is leading the charge, with contextual messages that allow shoppers to recommend products to specific friends. These implementations deliver a more germane value proposition of sharing to the shopper, which drives increased utilization.

Handbags.com Contextual Social Sharing

Handbags.com also provides incentives for shoppers to share product content via a coupon-based rewards program:

Handbags.com Refer a Friend Program

The evidence points to contextual social sharing as an effective way to lower cost of acquisition. Handbags.com and Rue La La offer customers $10-$25 for each friend they refer via their social networks, and Ticketmaster estimates that each share to a social network is worth $5 in ticket sales.

Effective Merchandising Strategies are a Differentiator

Products are commodities for many retailers. If you are an avid reader, a book is the same regardless of whether you purchase it from Barnes & Noble or Amazon.com. This causes many retailers to differentiate based on price, an ultimately unsustainable strategy that diminishes margins.

However, the summit reinforced that an online bookseller’s merchandising strategy is its primary differentiator. In other words, the way in which shoppers discover, research and purchase products on an eCommerce site often determines whether they purchase from you or a competitor. This paradigm is causing online retailers to begin to behave like software companies, and Rick Watson from Barnes & Noble estimates that the formula for online merchandising today is 80% technology and 20% curation of products and user-generated content.

Multi-Channel Merchandising is a Tough Nut to Crack

Plenty of discussions centered on optimizing merchandising, customer intelligence and operational efficiency across multiple channels and customer touchpoints. If a customer purchases an iPhone 4G in your store, do you really want to recommend the same product to her online or via an email offer?

Retailers can gain a 360° view of a customer across channels by tying online or mobile purchases to a user registration, and pairing those with email addresses collected at in-store checkout. Customer information then must be stored in a central repository that can selectively share data with third-party systems such as email marketing, commerce platforms, web analytics and POS systems to optimize marketing and merchandising initiatives.

On the operations side, many retail organizations are structured based on channels – the eCommerce team operates autonomously from the mobile and brick and mortar teams. This often causes disparate supply chains and inefficient inventory management. With the intersection of digital (online, mobile) and physical (brick and mortar), retailers are beginning to rethink their operational structure.

One thing that was clear from the event is that social commerce is still an emerging area of focus. As a result, tactics and not an overarching strategy often guide those investing today in social commerce. As adoption of social tools continues to grow, these takeaways from the conference should present a clearer path to ROI from social media.Janrain bottle opener USB Flash Drive

Oh, and speaking of that cool swag from the conference, if you happen to crack open a bottle of your favorite brew or backup that important document on a portable hard drive anytime soon, I hope that Janrain was able to help.