for social media class

1. CH 8: SOCIAL COMMERCE
• By: Carla B., Lachelle G., Koran C.

2. THE ZONE OF SOCIAL COMMERCE
• What is social commerce?
• Social commerce uses social media apps to enable online shoppers to
interact and collaborate during the shopping experience
• Example: Google Social Commerce (00:40)
• http://www.youtube.com/watch?v=sr5YkzOPWBg

3. • When was the last time you went shopping?
• Did you go alone? With friends?
• Shopping is a social activity
• Our shopping companions are known to marketers as purchase pals
• Purchase pals- validate what choices we make
• When we don’t have purchase pals, we turn to sales associates.

4. E-COMMERCE
• Online sales continue to grow
• Offers many benefits
• Comparison shopping
• Convenience
• Enhanced selection
• Cost savings

5. SOCIAL SHOPPING
• Consists of:
• Bookmarking your favorite products
• Emailing product summaries
• Subscribing to RSS feeds of other users’ favorite product lists
• Consumers interact with others during a shopping event
• Allows us to share product information electronically

6. RATINGS & REVIEWS
• Ratings – scores that people, acting in the role of critics, assign something as
an indicator.
• Combined with reviews
• Reviews – assessments with detailed comments about the object in question
• They justify the critic’s assigned rating and provide added content to those
viewing the content
• User-generated content – publication of consumer opinions
• Keep in mind: Not all ratings and reviews are user-generated
• Some sites provide ratings and reviews from experts

7. THE VALUE OF RATINGS & REVIEWS
• Ratings & reviews are used as a form of validation prior to purchase
• Retailers are inviting customers to rate their experience & write a review after
products are delivered
• Customer reviews are more influential than any other source of information
on buying behavior
• According to the textbook, 64% of shoppers say they spend 10 minutes or
more reading reviews prior to making a purchase

8. BEST PRACTICES TO LEVERAGE
SOCIAL REVIEWS & RATINGS
• Authenticity
• Transparency
• Advocacy
• Participatory

9. PSYCHOLOGY OF SOCIAL SHOPPING
• Psychology of Influence – The factors that change our attitudes and
behavior on a persuasive message.
• Cognitive Biases – Tendency to acquire and process information by
filtering it through one's own likes, dislikes, and experiences.

10. • Information Overload – too much information.
• Bounded Rationality – In decision-making, rationality of individuals is
limited by the information they have, the cognitive limitations of their
minds, and the finite amount of time they have to make a decision.

11. SOURCES OF INFLUENCE
• Social Proof – making decisions based on the popularity that a brand
may or may not have.
• Herding Effect – when a large number of people follow the behavior
of others.
Some of us conform to the norms of society in many ways. For example
the are norms to follow when gift-giving.

12. SOURCES OF INFLUENCE
• Expertise – specialist knowledge/ personal experience with a product
or problem
• Authority – persuades with recommendation of an expert.
• Affinity – To emulate and follow those whom we find interesting.
• Scarcity – desiring something that we may not be able to have.

13. SOURCES OF INFLUENCE
• Reciprocity – The instinctive urge to repay debts and favors whether or
not whether or not we requested for help.
• Sampling – When marketers offer a free trial of a product. This creates
the perception of having received a gift in consumers minds.
Therefore sampled products sales boost up.
• Cognitive Dissonance – is a state of psychological discomfort due to
thoughts or actions that contradict one another. To avoid such
discomfort we strive for consistency.

14. HISTORY OF WALMART
• The first Walmart store opened in 1962 in Rogers, Arkansas.
• Sam Walton is the visionary leadership.
• The Walton family owned 24 stores, ringing up $12.7 million in sales (1967).
• Walmart goes national in the 1970s
• Walmart reached $1 billion in annual sales, faster than any other company
at that time

15. • By 1990, Walmart was the nation's number-one retailer. As the Walmart
Supercenter redefined convenience and one-stop shopping, Every Day Low
Prices went international.
• Walmart entered the new millennium dedicated to offering customers a
seamless shopping experience, whether they are online, in a store or on a
mobile device(2000).

16. • The company employs 2.2 million associates worldwide and serves more
than 200 million customers each week at more than 11,000 stores in 27
countries.
• David Glass CEO 1988-2000
• H. Lee Scott CEO 2000-2009
• Mike Duke CEO 2009-2014

17. SERVICES WALMART PROVIDES
• Retail goods
• Pharmacies
• Financial services
• Wireless services
• Photo lab services

18. KEY COMPETITORS
• Target
• Costco whole sale corporation
• Carrefour

19. CASE STUDY
• The Rise of Social Commerce

20. • Social Commerce has been about how fast a customer can get in and out
of a site to complete a purchase
• Sites like Pinterest, Wanelo, Open Sky & etc are more like digital catalogs or
virtual malls.

21. STRATEGIES
• Ads on social media sites reminds users of the product that they browsed
upon on the web
• Facebook is known to have ads on its site for people to look into.

22. CHALLENGES
• What will help social commerce grow?
• Connecting different mediums is key
• Due to its popularity, social media should play a major role in commerce
growth

23. OUTCOME
• Larger and small audiences of people, referral and conversion rates will
result in a good revenue streams
• More revenue = more business

24. CLASS ACTIVITY
• Take a few minutes … Discuss
• How have reviews and ratings influenced your decision to
purchase online?
• Have you participated in a rating or review when shopping online?
• If you haven't purchased online, what is/are the reason(s)?
• Do you think shopping online is convenient? Why? Why not?