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Page 1: DecisionStep White Paper_Social Shopping

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Why Make Your Customers Shop Alone?The Case for Real-Time Social Shopping

By John JacksonPresident & CEODecisionStep, Inc.

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ecisionStep recently conducted a survey of online shoppers to shed light on thethird-party factors that influence a purchase decision, how they change withdifferent types of purchases, and the importance of real-time communication withtrusted advisors when making a purchase online.

Here is what we found:

• Consumers trust friends, family members and peers more thanadvertising, expert reviews and bloggers; 

• Consumers rely on advice from family and friends more as the price or importance of a purchase decision goes up; 

• Most online shoppers are interested in seeking real-time advice fromfriends, family, customer support and even other shoppers on a website. 

The Importance of Peer Feedback in the Purchase Process

Over the years, retailers have made shopping online more fun, easier and faster.However, in the current recession, consumers are more cautious with their money andmany are putting more consideration into what they buy. While many retailers haveincorporated online ratings and reviews from other consumers to help in the decision-making process, most still lack the technological capability to quickly connect customerswith their friends or other online shoppers directly. Getting that valuable advice from peersremains a time-consuming and inefficient task for most visitors to online retail stores. Ingeneral, shopping online remains a solitary experience, and consumers have been left todevise their own methods for soliciting a friend’s advice, including emailing links, blindlywalking friends through a site over the phone, or even printing out product information and

consulting face to face.

This is despite an overwhelming body of data indicating that peers are the most importantinfluencer when making a purchase decision. Last year, former Forrester analyst and pre-eminent thought leader in the social media space, Jeremiah Owyang (now with theAltimeter Group), cited three studies in his well-read blog1, all of which concluded that aperson’s peers were the most trusted source of information about goods and services. Thestudies were: “Groundswell: Living in a World Transformed by Social Technologies,” fromForrester Research, “The Trust Barometer,” from Edelman Public Relations and resultsfrom Canadian research firm Pollara. In September 2009, DecisionStep conducted a survey of Internet users

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to look moreclosely at consumer influencers as they relate to decision-making online. Our findingsconfirm the importance of peers as trusted advisors and provide additional insights in termsof how and when online consumers seek advice.

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hen asked who they trust when looking for advice on buying a product (either online or offline), nearly 94 percent responded by saying they trust friendsand family more than any other source, followed by experts and onlineconsumer reviews (72 and 69 percent, respectively). Those who said that

they look to companies or advertising were far behind with 15 percent.

Who do you trust when looking for advice in buying a new product(online or offline)? (mark all that apply)

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hen looking at particular categories of retail, the DecisionStep survey showsthat when shopping for apparel, nearly 30 percent of shoppers rely on theadvice of friends. This advice is as important in influencing fashion decisionsas advertising or placement in fashion magazines (each around 30 percent),

though marketing budgets are certainly not yet allocated in a similar vein.

When shopping for clothes, where do you get ideas for what to buy?(mark all that apply)

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he DecisionStep survey also shows that as the price or importance of items goesup, the reliance of shoppers on the advice of friends and family also increases.When asked who shoppers rely on when looking for advice on higher-ticket itemslike electronics, jewelry and furniture, nearly 64 percent look to friends or family

(more than double the number for fashion), followed by magazine and websites at 53percent (also nearly double).

When shopping for higher-ticket items like furniture, electronics, jewelry or autos, who do you consult when making a decision? (mark all that apply)

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imilarly, when shopping for financial products (mortgages, credit cards, etc.) themajority look to friends and family (nearly 67 percent), followed by advice from afinancial planner (28 percent).

When shopping for financial products (mortgage, credit card, etc.), whom doyou ask for advice? (mark all that apply)

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ooking specifically look at e-commerce, we asked respondents how they currentlyget advice or recommendations on what to buy when they are shopping online.The majority look at online customer reviews (73 percent), but a large majority arealso contacting friends and family offline after researching online (65 percent).

Only 11 percent of online shoppers don’t currently seek third-party advice or recommendations at all.

When shopping online, how do you get advice regarding a potentialpurchase? (mark all that apply)

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or those online shoppers who look to friends and family for advice regarding apotential purchase, nearly 60 percent use real-time forms of communication(phone and chat) and over 90 percent seek advice from specific individuals(phone, chat, email) as opposed to their entire social network. The relatively low

utilization of Instant Messaging (8.2 percent) for online shopping is particularly interesting,given the overwhelming number of consumers who use IM in general3. This validates moreinformal research conducted by DecisionStep showing that traditional  IM/Chat technologydoesn’t work well for collaborative shopping. Expect to see this number increase as chatfunctionality becomes better integrated with the overall ecommerce experience.

When shopping online, how do you get advice from friends and family

regarding a potential purchase?

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The Rise of Real Time

Real-time social shopping, also called collaborative shopping, refers to the ability of onlineconsumers to shop together simultaneously from different locations and to share products,

opinions and to generally influence each other’s buying decisions in real time. Just aspeople frequently spend time in stores together in the offline world, real-time socialshopping technology has enabled a parallel experience on the web.

Recently, a number of real-time and near real-time technologies and services have beendeveloped to improve the process of online communication and networking, and havehelped to lay the foundation for real-time social shopping. Social networking sites likeFacebook, MySpace and Twitter, which let consumers communicate in near real-time,have experienced huge adoption and growth rates. Facebook recently hit the 300 millionuser mark, Twitter has posted growth rates of 1,000 percent or more, and MySpace boastsnearly 125 million users.

There have also been a number of recent announcements signaling a more pervasive shiftto true real-time communication across the web. In April 2009, for example, Googleannounced YouTube RealTime, which lets YouTube members browse videos that their friends are watching and chat about them in real time. DecisionStep’s own recentannouncements that Mattel and Buy.com will be implementing our ShopTogether®technology adds to the increasing list of online retailers using real-time social shopping toengage their customers and drive additional sales.

The DecisionStep survey helps to highlight the untapped potential of real-time socialshopping for online retailers. When asked whether they would use real-time social

shopping technology to talk to friends and family when considering a purchase online, theoverwhelming majority, over 71 percent, said they would be either likely or extremely likelyto do so. When asked if they would use the technology to discuss a potential purchase witha customer service representative or sales clerk, 60 percent said they would be either likelyor extremely likely to do so. Finally, when asked if they would use real-time social shoppingtechnology to anonymously ask advice from other shoppers browsing a website at thesame time, 53 percent said they would be either likely or extremely likely to do so. Itappears that beyond connecting with the people they trust, it is also important to give your shoppers the ability to tap the “virtual” person next to them on the shoulder to see whatthey think in a way that provides more immediate engagement and interaction than ratingsand reviews.

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Real-Time Shopping w/ Friends & Family

If you could invite a friend or family member to shop and co-browse awebsite together with you in real-time, and get instant feedback on a potentialpurchase (without downloading any software, paying any fees or creating an

account on the site), how likely would you be to do it?

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Real-Time Shopping w/ Customer Service

If you could have a customer service representative or sales clerk shop andco-browse a website with you in real time, and give advice on a potential

purchase (without downloading any software, paying any fees or creating anaccount on the site), how likely would you be to do it?

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Real-Time Shopping w/ Other Shoppers

If you were able to anonymously ask other shoppers on a website (onlinewith you at the same time) about a particular product or category, e.g. a

television or digital camera (without downloading any software, paying anyfees or creating an account on the site), how likely would you be to do it?

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Making It Easy for Users

Another key finding from the DecisionStep survey points to the fact that although theoverwhelming majority of respondents would likely use real-time social shopping

technology, most would not do so if required to download software or create a newaccount. Approximately 65 percent of respondents said they would be unlikely to usesocial technology if it required such hassles. Retailers must make it easy and seamless for consumers to connect with others.

How likely would you be to use such a technology if you had to create a newaccount or download a browser plug-in or additional software?

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DecisionStep’s Solutions

The real-time perspective of friends, family and other consumers is clearly an importantcomponent of many purchase decisions and one that online shoppers seek and trust more

than advertising, PR or other efforts that retailers currently invest in to influence their customers.

ShopTogether®, the proprietary social-shopping application from DecisionStep, solves theproblem of connecting customers with the people who matter most in the decision-makingprocess by bringing the fun and interaction of the in-store experience online. TheShopTogether technology lets customers share real-time, synchronized shopping sessionswith friends, family, your site’s community or your call center—promoting engagement,enhancing customer satisfaction and increasing sales.

Interestingly, the majority of online communities and other social efforts attempted by

retailers to engage their customers are separate from their actual ecommerce site. In arecent presentation4 by Brian Kalma from Zappos, he mentioned their success withMyZappos, but qualified the success by adding that they need to move the interactionsback to the ecommerce site to truly make the community work as planned. DecisionStepfacilitates real-time interaction with peers or a personal shopper right on your e-commercesite itself. Our ShopTogether technology provide this important social capability withoutredirecting users to another location, keeping them close to the add-to-cart button.

Requiring only a few lines of code, ShopTogether’s family of easy-to-implementapplications integrate seamlessly into your website and enhance your existing navigationand user interface. ShopTogether also helps focus your social strategy by enabling your 

fans to advocate your brand through the major networks, growing your viral reachand driving traffic back to your site where deeper engagement and purchases can takeplace.

The ShopTogether family includes ShopTogether Friends, Concierge, Crowd andEnterprise. ShopTogether Friends lets consumers connect in a private shopping sessionto chat, view products, collect mutual favorites and share ideas that promote purchasedecisions. ShopTogether Concierge adds real-time, visual collaboration to connectshoppers with sales experts in your call center who can chat, share products andencourage purchases in a structured way designed to reproduce the in-store experience.ShopTogether Crowd lets customers track the shopping and buying behavior of everyone

on your site for a minute-by-minute, real-time look at what’s hot. DecisionStep alsoprovides a fully customizable Enterprise version of ShopTogether that lets you get creativewith custom integration for your website.

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With ShopTogether, consumers do not need to create a new account or have a pre-existing chat client. No downloads are required. Once a retailer has implementedShopTogether, shoppers can use the application immediately. And because the activity isall happening on your site, as opposed to one of the social networks or a separate

community site, you can better track the activity, control the customer experience – andkeep the conversation in the same place that people buy.

Conclusion

Just as personalized recommendations, consumer reviews and online video were once theexception rather than the rule, one should expect to see continued high-profile adoption of real-time technologies driven by a growing need by consumers to share ideas andcommunicate when they want with those they trust. Real-time social shopping gives your customers access to the people that matter most at the critical point in their decision-

making process. Beyond just differentiating your online brand, these technologies can leadto increased customer engagement, more time spent on site, higher order values,increased conversion rates and fewer returns.

For more information about ShopTogether by DecisionStep, please contact:

Email: [email protected] Phone: 301-586-9130 

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Notes

1. “Who Do People Trust?” Jeremiah Owyang, April 29, 2008 http://www.web-strategist.com/blog/2008/04/29/who-do-people-trust-it-aint-bloggers/

2. Survey of more than 170 Internet users.

3. Eulynn Shiu and Amanda Lenhart, How Americans Use Instant Messaging (Washington, D.C.:Pew Internet & American Life Project, 2004)

4. October 1, 2009 at WWD New Rules of Consumer Engagement Conference in NYC.