Are you losing out on a slice of £9bn?

A new social commerce report shows the potential

UK retailers that do not offer customers recommendations could be missing out on £9 billion in extra revenue according to a new report by nToklo. It seems that although 'social commerce' is an established concept, many retailers aren't fully tapping into it.

There's no question that social commerce from a 'vendor' perspective (or social shopping from the 'consumer' perspective) is a hot area since:

• So many people have an online profile in one or more social networks
• Social graph APIs and tools have become available and it's getting easier to use the data within those profiles and encourage sharing

According to the social commerce gurus at nToklo, the use of user generated content at multiple stages of the sales funnel could account for up to a 27 percent uptake in sales, and despite this only half of the UK’s top 100 retailers offer such features, you can see more from the report here which shows how you can make the business case for social commerce. Here are some quick take-aways:

• Although over 90 percent of brands surveyed have an active account on Facebook or Twitter (of course it does not mean they're doing much with it!), only 65 percent of retailer’s sites use the social integration technology such sites offer (i.e Facebook Connect)
• 73 percent of the sites don't enable consumers to discover or share recommendations through social platforms
• 76 percent of the retailers don't offer social community functions within their sites, despite the customer accounts and sign-ins being largely ubiquitous

Interactive Media in Retail Group (IMRG), the UK industry association for e-retail suggest the UK’s online retail spend for 2011 was over £68billion. IMRG expect this to grow by a further 13 percent in 2012 – a huge opportunity for online retailers in our current climate? That's what nToklo base their data on.

So how can retail brands get started with social commerce?

Of course nToklo are vendors who provide products to enable social commerce, and yet there's no question you can get started without such technology too. There are different dimensions to social commerce or social shopping which go beyond this post - I found this primer really succinct, where the author Elizabeth Yin suggest that there are 3 categories of social commerce:

• Group shopping sites
• Shopping communities
• Recommendation engines

For the sake of this post we're focussing on the perspective of an online retailer driving conversion to sale. Here the ultimate goal is to build a measurable social commerce strategy and focus on integrating all social marketing activities within your marketing planning (mobile, online, in-store, direct marketing for example). It's a re-orientation of online marketing and social media plans around sales - not necessarily online sales either, when you think about it.

Here are our three steps to get started (aside from the vendor software such as nToklo):

1. Leverage user-generated content around your product. By encouraging people to create and share content about your products and services, this content becomes a digital asset that can be used in multiple product marketing tactics. Online retailers have found that customer reviews are the most effective user-generated social tactic for driving sales because there is high demand for this content by shoppers. Gartner recently suggest more than 70 percent of online shoppers sought out reviews before purchasing using social media
2. Grow your customer-voice focus in outposts away from your website. Consider starting customer feedback initiatives simply via Facebook and Twitter. People should be able to talk about your brand wherever they are, driving traffic and so sales in all channels
3. Leverage customer feedback across marketing programmes and campaigns. Put simply - if someone says something positive about your brand, products, or services then use it. Integrate positive feedback into communications where you interact with your customers.

A likely huge player within social commerce going forwards is Facebook ("F-commerce") so it's going to be critical to keep an eye on them. The results of initial trials suggest that F-commerce likely isn't the greatest potential of social commerce that many thought it would be. Indeed some are suggesting that F-commerce stands for Fail-commerce with JC Penney, Gamestop, Nordstrom and GAP shutting the doors on their F-Stores.

Still, Facebook will keep innovating; there are rumours of Facebook heading imminently in to this space with "want" buttons and therefore idea Facebook may be able to start purchase journeys for brands - expect a tonne of API's to hook your online store in with Facebook - more on that here.

There's no question that the potential of social commerce is vast, and it doesn't have to become too complicated to get in on the ground floor - have you started making social commerce plans yet?