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Learning Objectives  What is the relationship between social commerce and e-commerce?  How do ratings and reviews provide value for consumers and e-retailers?  How do social shopping applications and tools affect consumers as they move through the consumer decision-making process?  What are the psychological factors that influence social shopping? © Tracy L. Tuten and Michael R. Solomon

Figure 8.1 Social Commerce © Tracy L. Tuten and Michael R. Solomon

Social Media Marketing, 2e© Social commerce is a subset of _____________ E-commerce

Social Media Marketing, 2e© Today over 82% of those who conduct research about purchase decisions online also ______ Shop online

Social Media Marketing, 2e© __________ refers to situations where consumers interact with others during a shopping event. Social shopping

Social Media Marketing, 2e© The process of shopping in terms of the stages of consumer decision making require what five steps? Problem recognition, Information Search, Alternative evaluation, purchase, post- purchase evaluation

Social Media Marketing, 2e© ZMOT stands for ________ Zero Moment of Truth

Social Media Marketing, 2e© The moment a consumer chooses a product from the store shelf is the ________ and the _______is the moment the consumer uses the product and feels satisfaction or dissatisfaction. First Moment of Truth, Second Moment of Truth

Social Media Marketing, 2e© ______ are assessments with detailed comments about the object in question; ____s are simply scores generated by users that reflect assessments of attributes like perceived quality, satisfaction, or popularity on a scale Reviews / ratings

Social Media Marketing, 2e© Ratings are a __________; a mental shortcut consumers use to help them with decision making. heuristic

Social Media Marketing, 2e© Increasingly, reviews are questioned. Why? Deception – estimates are 30% are fraudulent

Social Media Marketing, 2e© Among the social commerce sharing options, virtual galleries where users can share their creations, shopping lists are sometimes called _____________ User curated shopping

Social Media Marketing, 2e© Groups of people who meet online to communicate about products and help each other solve related problems. User forums

Social Media Marketing, 2e© Among the Best Practices to Leverage Social Reviews and Ratings, _____ is defined in Chapter 8 as acknowledging opinions that were invited, incentivized, or facilitated by the brand. Transparency

Social Media Marketing, 2e© Among the Best Practices to Leverage Social Reviews and Ratings, _____ is defined in Chapter 8 as the idea that online opinions are so influential because they live on in perpetuity. sustainability

Social Media Marketing, 2e© The most commonly cited reason given for not allowing online reviews on business’ sites is the fear that dissatisfied customers will use the review feature as a venue to _________ a brand. flame

Social Media Marketing, 2e© Of the sources of influence, when a lot of people select one option (e.g., a clothing style or a restaurant), we interpret this popularity as ________ Social proof

Social Media Marketing, 2e© The second source of influence is ________, that persuades with the opinion or recommendation of an expert in the field. authority

Social Media Marketing, 2e© ________ sometimes called “liking,” means that people tend to follow and emulate those people whom they find attractive or otherwise desirable. affinity

Social Shopping Social shopping refers to situations where consumers interact with others during a shopping event online. © T r a c y L. T u t e n a n d M ic h a el R. S o l o m o n Our shopping companions, known among marketers as purchase pals, help us to think through our alternatives and make a decision.

Figure 8.2 Social Shopping ‘the story of David’ –’drag to a mall’ 8-22

Why do we shop?  Get things we need  Get things we want  Shopping is an activity that we can perform for either utilitarian (functional or tangible) or hedonic (pleasurable or intangible) reasons  What motivates human behavior? Think back to some of the points from previous discussion: understanding why people do things 8-23

The Decision-Making Process Problem Recognition Information Search Alternative Evaluation Purchase Post- Purchase Evaluation 8-24

The Marketing Value of Social Commerce Ratings and Reviews Recommendations and Referrals 8-25

Benefits of review  Reviews result in better site stickiness— customers reading reviews will stay at a retail site longer than they would otherwise.  They can also enhance the effectiveness of offline promotional strategies: Rubbermaid added review comments from its website to the content included in its freestanding inserts.  When reviews were included, coupon utilization increased 10%. Social Media Marketing, 2e© 8-26

Benefits of review  Lastly, the reviews and opinion posts become a source of research data for the business, highlighting consumer opinions in a frank yet unobtrusive fashion.  Businesses can learn whether consumers like a competitor’s brand better and why, how consumers react to positive or negative press, what stories are being spread about the brand, and which customers are being evangelical and which ones are acting as “brand terrorists.” Social Media Marketing, 2e© 8-27

Who has a smart phone, etc.?  Let’s make some buying decisions…  Pick a restaurant in Mesquite Social Media Marketing, 2e© 8-28

Who has a smart phone, etc.?  Let’s make some buying decisions…  Book a flight to Las Vegas Social Media Marketing, 2e© 8-29

Who has a smart phone, etc.?  Let’s make some buying decisions…  Find a hotel room in Las Vegas Social Media Marketing, 2e© 8-30

Who has a smart phone, etc.?  Let’s make some buying decisions…  Find a show in Las Vegas Social Media Marketing, 2e© 8-31

Social Commerce Strategies  Share tools  Recommendation indicators  Reviews and ratings  Testimonials  User galleries  Pick lists  Popularity filters  User forums 8-32

Social Commerce Strategies  Share tools  social software plug-ins that enable easy sharing of products sold on a retailer’s website to social networks.  The most popular plug-in today for retailers is Pinterest. 8-33

Social Commerce Strategies  Recommendation indicators  simple buttons that provide an onsite endorsement of a product.  The most common options are Facebook’s “like” and Google’s +! buttons 8-34

Social Commerce Strategies  Testimonials  a form of recommendation that enables users to share a more personal story about their experience, possibly as a video endorsement.  Refer back to ‘traditional media’—spokesperson approach might be an endorsement or a testimonial 8-35

Social Commerce Strategies  User galleries  virtual galleries where users can share their creations, shopping lists, and wish lists.  This approach is sometimes called user-curated shopping  may occur onsite or offsite with a community like Wanelo. 8-36

Social Commerce Strategies  User forums  groups of people who meet online to communicate about products and help each other solve related problems. 8-37

Best Practices  Authenticity – accept organic WOM (including negative WOM)  Transparency – acknowledge opinions that were invited, incentivized, or facilitated  Advocacy – enable consumers to rate the value of opinions  Participatory – encourage consumers to contribute reviews and ratings  Reciprocity – acknowledge the value of consumer opinions  Infectiousness – make it easy to share  Sustainability – remember opinions online live on 8-38

WOMMA Guidelines for WOM Marketing  Educate people about products  Identify people most likely to share opinions  Provide tools to make it easier to share opinions  Study how, when, and where opinions are shared  Listen and respond to supporters, detractors, and neutrals 8-39

Refer back to to the idea of deception  Handout  CNN 8-40

Influence and Social Shopping  Why do we do what we do?  Social proof  Authority  Affinity  Scarcity  Reciprocity  Consistency 8-41

Influence and Social Shopping  Social proof  When a lot of people select one option (e.g., a clothing style or a restaurant), we interpret this popularity as social proof that the choice is the right one. 8-42

Influence and Social Shopping  Authority  Authority persuades with the opinion or recommendation of an expert in the field.  Whenever someone has expertise, whether that expertise comes from specialist knowledge and/or personal experience with the product or problem, we will tend to follow that person’s advice.  Diffusion of Innovations – Two-Step Flow 8-43

Influence and Social Shopping  Affinity  sometimes called “likin,”  means that people tend to follow and emulate those people whom they find attractive or otherwise desirable.  If we like someone, we are more likely to say yes to their requests or to internalize their beliefs and actions as our own. 8-44

Influence and Social Shopping  Scarcity  We tend to instinctively want things more if we think we can’t have them. 8-45

Influence and Social Shopping  Reciprocity  The rule of reciprocity basically says that we have an embedded urge to repay debts and favors, whether or not we requested the help.  Reciprocity is a common norm of behavior across cultures. 8-46

Influence and Social Shopping  Consistency  People strive to be consistent with their beliefs and attitudes and with past behaviors.  When we fail to behave in ways that are consistent with our attitudes and past behaviors, we feel cognitive dissonance, a state of psychological discomfort caused when things we know and do contradict one another. 8-47

Recap and Questions  What is the relationship between social commerce and ecommerce?  How do ratings and reviews provide value?  How do social shopping applications affect the decision-making process?  What psychological factors influence the social shopping process? 8-48