Quick summary and thoughts on two articles just published on social commerce – one on Forbes entitled Social Commerce: Luring Customers To Your Facebook, and the other on the BBC News site - Let’s go social shopping.

In a nutshell, the Forbes article argues that although Facebook commerce is far from mature, it’s a space that brands absolutely need to inhabit – not selling on Facebook would be like not selling fan-gear at a ball game. However, John Terry, the article’s author from Channel Intelligence notes that the f-commerce imperative has yet to translate to reality for many brands: An April 2011 survey of 143 brands (unspecified) found that only 8% had e-commerce-enabled Facebook pages – and 15% had no Facebook page at all.  Channel Intelligence recommends that brands and retailers focus their f-commerce strategy on offering something on Facebook that people can’t get anywhere else.  We agree.  Whether you use Facebook for pop-up fan-stores to offer fan-first/fan-only exclusives, or ongoing fan-stores that sell exclusive branded fan merchandise or daily deals just for fans - the key is to sell on Facebook what you’re not selling elsewhere.

The BBC piece is a consumer introduction to social shopping – summarised as an umbrella term for shopping on social networks, social search in the context of shopping and group-buy. It includes comments from everyone’s favourite social commerce detractor, Forrester analyst Sucharita Mulpuru, suggesting that where social shopping has had success, it’s not by being social.  Group-buy platforms are not particularly social, and their success is down to big advertising and email marketing budgets.  Sucharita reiterates her belief that the value of social commerce lies not in being social per se, but by using social data – the social graph – to personalise the shopping experience. When you are up close and personal with social commerce, your realise its future is personal, not social.

The BBC article concludes that the latest frontier of social shopping is Assistive Consumer Technology in-store, such as ‘Tweet Mirrors‘ – in-store fitting-room mirrors connected to Twitter – allowing shoppers shoppers to try on an outfit and share the image in real time with friends and followers online (Mexx (Dusseldorf), Westfield Shopping Centre, Pilot (London) – commercialised by Dutch store experience specialists Nedap Retail).  See videos below. Like the DieselCam, Jeans West ButtCam, and Meta Technology‘s Magic Mirror (White Stuff), we like the idea of Tweet Mirrors – they’re fun and see a big future for fun in-store Assistive Consumer Technology, but until social mirrors can offer more utility, and are quicker and easier to use than simply snapping and sharing a pic of yourself in front of a traditional fitting room mirror with your smart phone, their primary purpose will be limited to PR.

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We’ve seen real life Facebook Likes (Coca-Cola, Diesel, Renault, Hyundai, Facebook) and Facebook-connected cameras in fitting rooms (Macy’s, Diesel), but now resorts and venues are rolling out Facebook connected cameras triggered by RFID sensors throughout their resorts. It’s a no-brainer for event marketing and conferences – and we think stores will be next.

In Ibiza, the Ushuaia Beach party hotel and club is equipping visitors with RFID bracelets and installing sensors throughout the venue (pool, bars, restaurants, etc) so that hedonistas can swipe their wristband to upload pictures, update status and check-in using Facebook Places.  In the US, the largest family water park chain in the US, Great Wolf resorts, is similarly deploying RFID bracelets, sensors and Facebook-connected cameras, so guests can post pictures to Facebook. Great Wolf resorts have been using RFID bracelets as door keys and payments since 2006, so connecting the bracelets up to Facebook-connected cameras with technology partner Fish Technologies is an iterative change.

For some, all this might seem a little Orwellian, but it’s just the beginning – once your mobile phone is chipped (NFC) and linked to your payment card – frictionless social commerce will become a reality, with consumers automatically social-casting their locations, transactions and interactions to whomever and whatever they choose (and some they don’t) – in return for utility and fun. Brave New World.

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The business rationale for opening fan-stores in social media is smart, simple and compelling.

Advocacy activation.

Fan advocacy boosts launch sales, but up to 50% of fans don’t actually advocate (they would recommend but they don’t  because they’re not prompted to do so).  As Emanuel Rosen, author the Anatomy of Buzz (still the best book on word of mouth to date), concluded, to activate fan advocacy you need to get your new product into fans’ hands first (get-it-first exclusivity activates advocacy).  Pop-up (temporary) fan-stores in social media are a quick and easy way to activate fan-advocacy and boost launch sales. Think of it as product placement in real life.  Or as Google put it think of it as creating ‘Zero moments of truth‘ – fan advocacy that drives purchase.

Getting new products into fans’ hands first is the speciality of Adidas, through its ‘pop-up retail’ strategy.  At the launch of new products, Adidas will open up temporary stores for anything from a few days up to a month – often at unpublicised locations, announcing whereabouts to fans and influencers via social networking sites.  For example, Adidas recently opened 6 pop-up fan-stores in secret locations in Germany, Austria and Switzerland to give get-it-first fan access to its ‘Ransom’ and ‘Blue’ collections. For the launch of skating gear, the pop-up retail solution from Adidas includes a converted bus, lorry and camper van that appears in fan-notified locations offering that get-it-first fan experience (see images below).  And for the launch of Stella McCartney designed Team GB 2012 Olympic gear, Adidas took over a store for 4 weeks in London’s Westfield mall.

In sum, Adidas are the pop-up meisters of fast retail, and we think social commerce has a much to learn from this bricks-and-mortar fan commerce. Why? Because, in the spirit of pop-up fast-retail, Adidas pop-up stores are quick and easy to set up – installed and stocked within a day – using shelves are made from light steel tubes, with shoes hanging out on display, and simple seating featuring the Adidas logo. Lighting and floor layout are predesigned for instant installation, allowing Adidas to immediately make sales without messing around with store-design divas. They’re temporary, and sell only a limited range of new gear – for fans.  In other words,  there are four features of the pop-up retail strategy that we think could usefully guide social commerce;

• For fans and influencers rather than mainstream customers
• Temporary stores to support a launch or event
• Sell a limited range of merchandise
• Quick, easy and inexpensive to set up, and then shut down

If this looks like a social commerce solution for you – Canadian retailer Roots does - then the new premium version of social media fan-store software from Payvment may be ideal for  quick and easy deployment of pop-up fan stores in social media, whilst enterprise social commerce solutions 8thBridge, Milyoni, Moontoast, ShopIgniter, Zibaba, DotBox and others all have teams at the ready to provide you with a turnkey pop-up social commerce solution.

So take a look at Adidas pop-up retail (images below) and ask yourself, if we did this in social media, what would it look like?

And if you want more, see the videos (below), check out these blogs (here, here, here, here and here), and this short article on how the pop-up trend is driving retail innovation.  If pop-up retail is good for Kanye and Jay-Z could it be good for you too?

Pop-up Retail + Social Commerce = Big Opportunity

Shopkick - the mobile commerce app for iPhone and Android that knows when users walk into a store and rewards them with points called “kicks” just for doing so – may be the traditional retailers newest best friend. At least brands like American Eagle, Crate&Barrel, Macy’s, Best Buy, Target, Procter & Gamble, Kraft Foods and most of the nation’s top 250 retailers think so, for each has incorporated use of the app in their respective stores. (Old Navy announced last Wednesday that it is joining Shopkick’s roster in all of its nearly 1,000 U.S. locations.)

Each time a Shopkick app user walks into a participating store they are rewarded with points. The more points that accumulate, the more rewards, discounts and special offers are made available. Think of kicks as a form of currency that can be used in any participating store.

For example, walk into any of the 1,300 Best Buy stores, open the Shopkick app in the entrance area, wait for a few seconds and Shopkick provides an instant reward. The more stores a user visits, the more points that stack up — points that can lead to exclusive deals, some of which are available to Shopkick users only. Also, users can accumulate additional kicks rewards by scanning barcodes of featured products.

Rewards come in many forms including: iTunes gift cards, restaurant vouchers, gift cards, Facebook Credits, movie tickets, or even a cruise around the world! Users can also donate kick to as many as 30 different non-profit causes.

Shopkick Versus Groupon and Foursquare

If Groupon and Foursquare had a child, it would be named Shopkick. However, Shopkick CEO Cyriac Roeding says that the app differentiates itself from either of the other two platforms in these respects:

• Groupon – Groupon’s major strength lies in its ability to bring in new customers. Shopkick places its emphasis on building customer loyalty through the accumulation of kicks. The more kicks, the more rewards, the more customers return to redeem them.
• Foursquare – Similar to Foursqure, Shopkick utilizes game mechanics – kicks rewards – as a way to incite shoppers to buy more. However, unlike Foursquare, which uses standard and often imprecise GPS technology to pinpoint a user’s location, according to Roeding, Shopkick has its own location-based technology that utilizes an in-store audio signal detectible by the mobile device to know when a user has crossed a store’s threshold. Only then does it go into action. To put it another way, Foursquare has “check-ins” while Shopkick has “walk-ins.”

When to Use Shopkick

From the consumer’s standpoint, there are primarily three ways to use the app:

1. While browsing: Shopkick aggregates deals and offers from retailers, so shoppers can browse and locate what they want at the right price, from their favorite stores and brands – it is like a mobile version of Sunday circular ads.
2. While shopping: the heart of Shopkick’s rise with retailers is its patent-pending presence detection technology. Using a smartphone’s microphone, Shopkick is able to connect shoppers with a retailer the moment they cross the threshold and enter a partner store – so shoppers know how and where to earn the best rewards, and retailers are able to offer kicks and deals to actual shoppers.
3. While checking out products: by using kicks to incent shoppers to scan barcodes, search for branded items in a store and otherwise interact with their products, brands are able to have an active dialogue with shoppers both inside and beyond the store.

What’s in it for Retailers

There are a number of benefits to retailer that choose to use the app:

1. The app helps drive foot traffic. Shoppers who have the app can see a list of participating nearby stores and how many “kicks” each offers. The Sports Authority said it has seen foot traffic produced by the app rise by 350 percent when comparing the initial benchmark data versus what it’s currently seeing.
2. Through the accumulation of points, loyalty is encouraged. Ed Kaczmarek, director of innovation and consumer experiences at Kraft Foods, said in an interview with Direct Marketing News that “the primary reason [Kraft partnered with Shopkick] is we want to get to mobile loyalty.”
3. Businesses are in a race to take advantage of all that mobile technology has to offer and Shopkick certainly puts mobile commerce on steroids.
4. It enables stores to find new, tech-savvy ways to communicate with customers while they are in the store and at the point when they are most likely to make a purchase.
5. By providing information about products instantly, it empowers consumers to make better, more informed purchase decisions on the spot.

All is not sunshine and roses, however, because it’s possible for a consumer to earn points without actually ever buying anything. In an effort to close the loop, brands like Target are tying loyalty programs to Shopkick or adding email opt-ins to the app.

There is also the question of incremental sales. Does traffic produced by Shopkick result in additional sales? Shopkick says so stating that, in the case of one retail partner, it has seen an increase of $50 million in incremental sales due to use of the app.

Cost to Retailers

Aside from the $100 required to purchase the in-store audio transmitter, there are no additional costs to the retailer. (You heard me correctly; no additional costs. No wonder big brands love the app.)

The way the financial model works is that every time a consumer walks into one its retail partner stores and earns kicks, Shopkick gets a share of the value. When customers make a purchase via the app, Shopkick get a share of their basket and the online world cost-per-action becomes the “cost-per-basket” at physical stores.

Sample Screenshots

ShopKick Factoids

• Shopkick boasts more than 2.5 million users who have browsed more than 350 million items, scanned 7 million products and have “favorited” more than 75,000 stores.
• There have been over 2 million physical walk-ins to stores (which are measured from the shopkick signal device installed at the store).
• 59 percent of Shopkick users are women, most between the ages of 20 and 60 years old.
• The average user opens the app 14 times a month and looks at products from 16 stores each time.
• Fast Company called Shopkick one of the 10 Most Innovative Companies in Retail.
• WSJ said it was on of the Top 10 Apps of 2010.

Company Information

Shopkick was founded in the summer of 2009 by Cyriac Roeding, Jeff Sellinger, Aaron Emigh, and is funded by Kleiner Perkins’ iFund, Greylock Partners and Reid Hoffman, founder of LinkedIn, and investor in Facebook and Zynga, and Ron Conway.