Amidst the avalanche of articles and insights on social commerce, we bring you THE F-FACTOR, which is all about how friends, fans & followers greatly influence consumers’ purchasing decisions in ever-more sophisticated ways.
So much has been said about social media and the rise of social commerce as the new marketing frontier that we’re not going to (re)make the social case here. Instead, we’ll focus on how the influence of friends, fans, and followers on consumers’ purchasing decisions continues to become more sophisticated and thus more powerful. Let’s call it the F-FACTOR:
THE F-FACTOR | Consumers are increasingly tapping into their networks of friends, fans, and followers to discover, discuss and purchase goods and services, in ever-more sophisticated ways. As a result, it's never been more important for brands to make sure they too have the F-FACTOR.
Why is the F-FACTOR important to consumers? It offers the promise of a consumption arena* that is more efficient, more relevant, and more interesting than before, where consumers either had to spend endless time and effort on trying to discover the best of the best, or had to rely on sources that were distant, unknown or untrusted (read: brand-driven), and therefore potentially unreliable or irrelevant.
Of course, consumption has always been social: people have forever been influenced by what those around them think and buy. KellerFay, a US word of mouth marketing research consultancy, estimates that there are nearly one trillion conversations about brands every year in the US alone. But, just as with so many consumer trends, while the core consumer behavior isn’t new, technological developments are unlocking new manifestations of that behavior, which here amplify its importance and impact. Indeed, the F-FACTOR is being fueled by new tools and platforms available to both consumers and brands, and by the sheer numbers of people now using and contributing to these tools.
Note: This Trend Briefing focuses on the new ways consumers’ purchasing decisions are being influenced by their friends, followers and other people they “know”. For more on consumers who actually contribute, see our 11 Crucial Consumer Trends for 2011, where we looked briefly at the rise of SOCIAL-LITES, and the phenomenon of why consumers are increasingly becoming curators; actively broadcasting, remixing, compiling, commenting, sharing and recommending their purchases and experiences to both their friends and wider audiences. Hint: it’s it all to do with the changing STATUSPHERE, as always ;-)
Just a few recent stats demonstrating the reach and power of the F-FACTOR:
And a couple of brand-related, F-FACTOR stats:
- The F-FACTOR is currently dominated by Facebook, as over 500 million active users spend over 700 billion minutes a month on the site. (Source: Facebook, April 2011)
- And its impact isn’t just on Facebook itself. Every month, more than 250 million people engage with Facebook across more than 2.5 million external websites. (Source: Facebook, April 2011)
- The average user clicks the ‘Like’ button 9 times each month. (Facebook, 2010)
- Three quarters of Facebook users have 'Liked' a brand. (Source: AdAge/ Ipsos, February 2011)
- Juicy Couture found that their product purchase conversion rate increased by 160% after installing social sharing features (Source: CreateTheGroup, February 2011)
- Incipio Technologies, a gadget accessory retailer, found that referrals from Facebook had a conversion rate double the average (Source: Business Insider, March 2011)
- But it’s not just about Facebook. Take for example the explosive rise of the daily deal site Groupon, which used referrals from friends and colleagues to drive sales of over 40 million deals in the two and a half years since it launched in November 2008, via email ;-)
- F-DISCOVERY: How consumers discover new products and services by relying on their social networks.
- F-RATED: How consumers will increasingly (and automatically) receive targeted ratings, recommendations and reviews from their social networks.
- F-FEEDBACK: How consumers can ask their friends and followers to improve and validate their buying decisions.
- F-TOGETHER: How shopping is becoming increasingly social, even when consumers and their peers are not physically together.
- F-ME: How consumers’ social networks are literally turned into products and services.
One final caveat: there are a whole host of ways in which consumers are influenced by other consumers, from collaborative filtering and ‘social’ or collective intelligence models. But to try and save this from turning into a book, this briefing will focus on consumers’ existing or explicit social networks.
Consumers’ ongoing obsession with owning or experiencing the best of the best and their desire for serendipity, excitement, interaction and community, explains the pull of F-DISCOVERY. People are curious and interested in what their friends and contacts think, do, eat, read, listen to, drive in, travel to and buy, because often this will be similar to how they want to think, act and buy.
No surprise then that consumers are embracing communities, tools and apps that allow them to dive into and discover selections from friends, fans, followers and so on.
- Polyvore bills itself as ‘a community of tastemakers’, where users can clip products from around the web and compile them into virtual ‘looks’ or sets which can be shared across social networks. The site also features sets from brands and celebrities, with users able to follow, like and buy desired items.
- Boutiques.com is a personalized shopping site from Google where users can establish their own collection of favorite items from around the web.
- Users of Thefind, the shopping search engine, can ‘Shop Like Friends’, and view their Facebook friends’ tastes and preferences.
- A number of extensions make it increasingly easy for consumers to see exactly what their friends 'Like' around the web: check out Likebutton.com, which shows users what their friends have liked across a number of the most popular sites, or LikeJournal, which stores users' and their friends' likes.
- Belgian magazine Flair launched their fashiontag Facebook app in March 2011. The app enables users to tag photos of friends’ clothes and ask them where they had bought them. Within a week, the magazine’s number of fans increased by 35%, from 17,000 to 23,000. (via AdAge)
- Kaboodle, Svpply, Fancy and Nuji all help users to discover new products from apparel to art that have been selected by fellow consumers.
- Canadian shoppers can use ItSpot’s iPhone apps to discover what fellow shoppers nearby are buying. The apps cover a number of cities, and include details of local promotions as well as shopping tips from local Shoppingistas.
- In November 2010, Gifts.com and Hunch joined forces to create their GiftFinder app, which logs into Facebook and suggests suitable gifts for friends based on the information in their profile pages. The company said the conversion rate was up to 60% higher than when users were shown generic recommendations.
In April 2010, Levi's was the first big brand to integrate its online store with Facebook, allowing shoppers to view which products their friends had ‘liked’, interact with them and create a 'like minded shopping' experience.
Facebook’s Instant Personalization project moves this beyond Facebook itself, by enabling users to have content that their friends have liked or recommended highlighted on other websites. Partner sites include local review site Yelp, music site Pandora, Microsoft’s search engine Bing and travel site Trip Advisor. The Trip Advisor tie in, launched in December 2010, means that visitors to the travel site who are logged into Facebook see their friends’ reviews first, as well as being able to quickly view which of their friends have been to particular cites. Friends can also message each other quickly for additional travel tips.
- US based PostPost, launched in December 2010, is a free application that turns one's Facebook page into a digital newspaper. Users connect the application via the PostPost site, which enables it to link to Facebook and create a presentation of their news feed in the traditional format of a newspaper
- Twournal enables users of Twitter to transform their tweets and pictures into a real-life published journal. In addition to creating their own 'books', users can also buy and sell publications from other users.
- US based CrowdedInk offers an app that allows users to generate mugs filled with pictures of their Facebook friends or Twitter followers. Users only need to enter their username and a preview of the mug is automatically generated in minutes.
- Social Print Studio can provide the analogue equivalent to the online album. The site creates posters generated from Facebook friends’ profile pictures, Facebook photo albums, Twitter followers, and even Tumblr accounts.
- Kunst Buzz, a Dutch art company has started producing Twitter art where users’ tweets make up their portrait.
The F-FACTOR is about being so exceptional that consumers will find and ultimately choose you, without you as a brand having to do anything extra. It’s not about bribing or even compelling people to “Like” your Facebook page. This is something of course, which brands that truly have the F-FACTOR don’t have to worry about.
So, for all ‘F-entrepreneurs', this space is still wide open: simply come up with new tools and platforms that help consumers help each other to discover, discuss and buy the best of the best. For B2C brands, it's time to deliver innovations, products, campaigns and experiences that truly have the F-FACTOR.
In the meantime we’re working hard on our June Trend Briefing, which will cover a dozen ‘mini-trends’ dying to be applied straight away. Do tell your friends and followers ;-)