Jun 25, 2021
The rise over the last few years of Facebook and Instagram shops - Social Commerce - is proof that Social Media is not just a brand channel, it's an effective commercial channel. Host Will Francis chats with eCommerce expert Cathal Melinn about what's unique to this method of selling and marketing, how to integrate with your other channels, where influencers fit in, new directions like WeChat, and of course, how you can get started with Social Commerce.
Will: Welcome to "Ahead of the Game," a podcast brought to you by the Digital Marketing Institute. This episode is a big Q&A, where we explore an area of marketing through a leading industry expert. I'm your host, Will Francis and today, I'll be talking to Cathal Melinn, an analyst, expert, and educator who's been in digital for almost two decades, working with brands like Aer Lingus, Coca Cola, Bord Bia [The Irish Food Board], and many more. He's the DMI's go-to expert on all things e-commerce. And so, today, I'll be asking him all about the rise of social commerce and how we can get started with our businesses. Cathal, welcome to the podcast.
Cathal: How are you, Will? How's it going? I'm good. I'm good.
Will: So, yeah, social commerce, it does seem to be something that's been on the horizon or it's been present for a very long time. But I feel like people are taking it a lot more seriously now. Is that just because e-commerce has really exploded in the recent year or so because of the pandemic, do you think?
Cathal: It predated the pandemic a little bit, like, obviously, you know, within the pandemic, we have seen a massive acceleration of online sales activity, but it really kind of predated it to, like, even far back to 2017, '18, where we started to see, kind of, some interesting social commerce campaigns and strategies emerging, that really worked. And that was the key thing that made everyone notice is that it really, really worked. You know, and this is where, kind of, I got most interested into it because I come from search. I come from search, which is predominantly a transactional-based channel. You know, you're driving sales, you're driving revenue, all that stuff, and social media was this other animal. And it didn't seem to do that. So, 2017, '18, we started doing social, doing things that have been traditionally, you know, the realm of search in terms of significant sales. And that's kind of.... It's very short, but, you know, kind of, meteoric history is that we are seeing really something different happening now.
Will: And we are talking about basically being able to buy stuff, whilst you're in a social platform without leaving that platform, right? Just to kind of clarify what we mean.
Cathal: Yeah, so, just to, kind of, give the nuances of social commerce, it's not necessarily clicking a Facebook ad and then going off to a website and buying, it's all contained within one ecosystem. So, you click an ad on Facebook, and you go through a Facebook shop, and then you can pick that item, add it to your cart. And you can buy that item all within the Facebook interface. Also, like, there's other platforms that allow you to do this too. But that's basically... You don't have to go anywhere. And it's predominantly mobile because these apps have, you know, additional functionality that allow you to add and checkout and pay and everything's integrated. It's all like that Amazon one-click, where you don't need to do a bunch of stuff to actually buy it.
Will: That's a good point, actually, it is predominantly mobile, isn't it? And I suppose that could have only happened because people became, in general, more comfortable with buying on mobile, you know, in the last few years.
Cathal: Yeah. And again, without kind of harkening back to the pandemic too much either, like, in my classes that I teach, I ask my students, do you buy more on your phone this year than last year? And all of them say yes, in every single age group. So, we kind of... E-commerce came to our lives as part of the desktop computer. And we're used to doing that, taking out the credit card, popping it in, making sure everything's correct, and then going ahead and buying because we fear that we'll somehow make a mistake on our phone and be charged money. But, like, that's really unlikely because all that will happen is you will have entered an incorrect credit card number or something. So we trust mobile more now. The functionality of phones, technology of phones allows us to do a lot more within an app. They're pretty powerful devices. So, you will find that a lot of your standard social apps do have this layer of functionality that's invisible to the average user, that allows for things like e-commerce transactions to take place, so you don't have to go anywhere. You can just buy it there and then. Super easy. And that's the real draw of social commerce. There's fewer clicks and more sales.
Will: So that's great for e-commerce shops. It's handy for users. How does it benefit the platforms? Why are they driving this forward?
Cathal: They get ad revenue out of it. So there's a number of things. And they get ad revenue, first of all, because you'll be promoting your products on the different platforms. They haven't gone down the route of taking a cut of the transaction fees. But, you know, you could see that happening, that if people are transacting using different checkouts, that they take a cut and they'll kind of benefit from that. But really, it's obvious. It's advertising. Yeah, that's the thing. You can advertise here.
Will: Because it's free to have a shop, isn't it? It's free to have a shop and a catalog of products in these social platforms. But of course, once you've got it, you realize no one's looking. No one can see. And so, yeah, you're very much guided towards using that product catalog as a basis for ads. And yes, there's another way that the platforms can drive ad revenue, for sure. Okay, so social commerce, it's essentially a free tool to showcase your products on social platforms and then you can actually pay to advertise those products in a targeted way. So, we know what it is. So what type of products and brands do you think work best with social commerce?
Cathal: Yeah, it's evolving. So, at the moment, we do find that brands with low costs, you know, like a low purchase price will work better on social because we do find that if there's an impulse level, that you see something on Instagram and you're a little bit, you know, astounded by it, and you think it's really great and fascinated, and you might go ahead and purchase it. But if it's like $5,000, you might not, you know... But if it's like $250, you might, you know, so we do find that within the threshold of impulse purchases from a particular category, that works quite well. So you won't, as I say, buy a Landrover, but you might buy a $10 t-shirt.
Will: Yes. And I mean, personally, you know, I've employed social commerce tools for my own work, for my business selling training courses. The frustration is you can, in general, only use it for physical products. You know, you can't list services and sort of software. It has to be for something that is a physical product. That's certainly the case on Facebook and Instagram. And also, of course, banned, you know, sort of, like, prohibited products in any way, like firearms and stuff. So, that's worth mentioning, you know. That's another reason why I think it really tends towards fashion, particularly and, you know, then or the kind of gift type stuff like homewares, and toys, and things like that. What sort of products do particularly well? Are we talking...? Is it the sort of $5 and $10 products or are there any brands with several $100 or $1,000 products on there?
Cathal: Yeah, no, there definitely, definitely are under some really interesting brands that have done some interesting things using social commerce techniques. Like, now it's a little bit old. But back in 2018, when Nike launched their, like, Air Jordan range, it was all done on Snapchat. So it was basically an event where people went to this event, and at the event, you could scan marketing codes and QR codes and all that stuff, that would open a bit like a Snapchat window, where you're able to purchase a product within the Snapchat window itself. When you're at that event, when you were at that event or people who are at that event, got their product delivered to them by 10:30 that night, you know, it was a big event thing where it's like amazing delivery, you know, integrated with phones, integrated with augmented reality and all of this. So, there are some... Like, we do find a lot of brands do event-based off when it's higher AOV, when it's higher average order value, higher price, and they'll do an event around a thing. And that can encourage people to be a little bit more giddy, a little more excited about buying a product like so. And so, like, there's other brands. Like, there's that Bolle brand, a sunglasses brand that you get at an event. And they did... Like, you could scan a QR code and then it would open like a certain type of Pinterest integration that allowed you to take your photographs for Pinterest through the different lens that you will potentially see through these sunglasses. So, you know, when you want to go a little... And they're expensive products. That's what I mean. So when you want to go a little bit more expensive, we do find that a standard product feed integration, for example, or a standard Facebook Ad probably is not gonna cut it. You know, so you can sell big on social, but it generally has to be accompanied by some kind of creative campaign for it to be effective. Otherwise, people are just going, "That's too expensive. I'm not taking the risk here. You know, and they'll revert back to searching and this type of purchase happens.
Will: Well that's the thing, I mean, I'm just thinking of how this fits into, like, you know, the funnel and all the different digital channels all play a role in that. I mean, you know, the common thing that I find with clients and my own stuff really is social ads, and other types of advertising, do a lot of the warming up, a lot of moving people through the funnel. And it can sometimes look like search is driving all the purchases because when people actually go, "Do you know what? I keep seeing ads for that dress I really want. I'm just gonna go and get it." And that's when they search, they Google it, and they go and buy it. And so it looks in the reports as if search is driving all the purchases, right? But what's actually happening, it's like a relay race where search is just the last runner crossing the finish line with the baton. And, you know, you need to give all the other runners in the team credit, like social media and all the other places that they've been exposed to the idea of that product and moved down the funnel. So, I suppose that one of the good things about social commerce is that you can have, you know, lots of different types of messaging, advertising around the product that makes people aware of it, makes people consider it. But then you can also go for the jugular with those, "Now, it's time to buy it," type ad campaigns, right, and you can serve the whole funnel in one place.
Cathal: So, that's the thing. It's kind of depending on your KPIs and your objectives for social commerce, you can decide to have a predominant assisted strategy or a closing strategy. So before we tended to find that social media was a brand-building creative engagement channel that, you know, certainly did something but we didn't know what. What social commerce... And we didn't know what, and then obviously, search did, kind of, sweep up all the credit for that. So what social commerce is doing, it's allowing social media to assist sales but also allowing social media to prove itself as a closing channel too. So you're kind of getting the best of both worlds because when you think about search, if there's no one searching for your product, there is no one buying your product, so search needs something to fill that pipeline, whereas with social because it starts off as an outbound activity, you show an ad, you show a product to someone, it kind of captures people's imagination. And then yes, they might ruminate and go off and search or they might, you know, engage with the brand a little bit more and buy there and then within that ecosystem.
So, social commerce has the best of those inbound and outbound actions that it can drive awareness and it can drive sales. So it's interesting in that regard. But yeah, I do know what you mean with search, like, as someone who is a search manager, I certainly do love social media for making all my campaigns look amazing, you know, because yeah, you do a big campaign on social and then the search goes up, and you're like, "Oh, yeah, of course, my search stuff." But the reality is, you know, that was initiated by a social campaign. Now, that doesn't mean that social commerce is a pure closing channel. It is very much an assisting channel too. So we'll still see...
Will: What do you mean by an assisting channel?
Cathal: Okay. So what I mean by an assisting channel is we have channels that close the sale, we have channels that assist the sale. A channel that closes the sale will be something like searcher email, typically, the last channel that someone uses before they buy. An assisting channel is something that helped them become aware or get ready to, you know, kind of, consider a product.
Will: Moved them towards it.
Cathal: Moved them towards that conversion. So social media, like, or social commerce could be, you know, seen as both an assisting and a closing channel. You know, when you see a product in your newsfeed, yes, you can buy it, or you can choose not to buy it and buy it when you're ready via the channel that you prefer. You know, search can't generate any customer intent. It just doesn't really do that. It is the benefactor...
Will: Well, no, because you have to be searching.
Cathal: It is the benefactor of customer intent and what people are searching for, you know. So, search management is all about visibility and managing numbers to make sure your CPA is, kind of, on target in different things, whereas social commerce can start and finish its own journey, which is very interesting.
Will: Well, that's it. You mentioned cost per acquisition, CPA, I'll come back to that in a sec because I wanna ask you about how social commerce can affect that. I mean, I think that for me, one thing I really like about social commerce is, you know, I mean, I've been trying to tell people for years, I think by now that social media is two different things. It's organic, and it's paid, and they work very differently. And the beauty about paid is that it leaves the organic to do what organic does best. And that is just engage people, help deepen their passion, be there for them, be basically useful or entertaining, like drop valuable content into their feed and not try and sell to them, not promote at them, not ask for anything back, right? That's how organic should work. And then paid is where you can do all that hard sell because you can target people at very specific points in their lifecycle in the funnel. You can do remarketing, etc. I think social commerce just extends that and what I'm hoping is that as it, sort of, burgeons, that people will recognize that, marketers will recognize that and let, you know, social ads and social commerce do the selling and allow themselves to be more creative and engaging in organic and not try and just ram promotional messages down people's throats in those organic channels because by doing that, you just tell the algorithm to make you invisible. That's essentially what you do when you promote your organic content, right? So, I hope it brings a bit of a clarification to how to use social channels as a marketer.
Cathal: Yeah, definitely. I mean, like, there's a couple of challenges that we all face with social media. And one of them is your Google Analytics, for example. You look in Google Analytics and you go, "Social media is not doing any sales. Let's call it social." You know, the basic rule of advertising and any advertising that outbound where you're essentially interrupting someone's day, their social feed or whatever it is, you need to give them something in return for their attention. So it has to be, you'd say, something creative, something interesting, something valuable, something rewarding because you're interrupting whatever it is they're doing. So, in return for their attention, you have to give them something that's, you know, at least valuable to them. And whether it's a joke or something that's just interesting. And I think, you know, that's what organic does need to do. Social commerce adds this whole extra layer of technology to the social media world in terms of checkouts and shops and stores and product feeds and all that stuff. That doesn't really feature as heavily in the non-commercial world, in the organic brand-building world. So, you know, you do approach it totally different because one is, kind of, very tech and paid ads, and indeed conversion-focused. And the other one is, like, old school advertising, building a brand, engaging with your customers, showing them your values, that kind of thing, you know, and to approach them both the same would be a poor use of time, shall we say?
Will: You know, I think it's great. And I think there is more clarification for the user as well because, you know, you present your products in a very clearly shop-like way rather than trying to, kind of, you know, weave products into rewarding valuable content, sort of, frees you up to say, "Well, you know, we can just present products and the user is in no doubt, there's a price next to them. You know, it's our shop, this is the stuff we sell, we can be open and explicit about that. Again, freeing up organic to do what it does best. So, I think it's definitely a good thing that's come in. So I suppose, you know... And sorry, just to come back, you did mention CPA. I'm curious, do you have any data on that? Like, is it improving cost per acquisition?
Cathal: Yeah, so that's the thing, so CPAs when done in conjunction with social commerce activities do work quite well. Now, I just wanna qualify that their blended CPAs, they're CPAs that you, kind of, start doing things like looking at increases in brand search. And that will feature into a CPA around social media or something so it's not direct CPA. It's not that, you know, clear cut search CPA, the last, like, CPA. It's more of a blended approach.
Will: You mean where you're looking at more and more overall combined cost of your marketing versus your amount of conversions. Right. So overall, it seems to be an improvement, like a reduction in the cost per acquisition, the cost for driving a sale, for brands who employ social commerce is what you're saying.
Cathal: Definitely, because like think about, like we had sales channels sold searches your sales channel. Now, we have these other channels that are a little bit cheaper than search, like social, that are also doing some incremental sales along the lines, too. So, overall, you can grow your business and expand and scale into other channels that weren't typically selling before that are now able to sell. And overall, you know, kind of, your baseline CPA will go down, your sales will go up.
Will: Yeah, it sounds great. I love it. I love the sound of that. So, is it easy to get...? You know, for our listeners who will now be thinking, "This is fantastic. How do I get it started?"
Cathal: Yeah, well, the first three things you need is social media profile. So, choose your ideal social profile based on your personas. So whichever channels your customers use, you need an e-commerce site because we're selling socially. It's better to have an e-commerce site... You can have a pure online social media health store, but you're better off having, like, an e-com site, as well.
Will: So you do have to have a website? You can't do this without a website?
Cathal: You can, you can absolutely do this without website. It's just you're limiting yourself to an entire e-commerce strategy base through social commerce. Whereas, you know, like, as a digital marketer, I'd never recommend anyone just focus in on one channel. So, to do social, like, just for a business, like, you can do social commerce with nothing more than a Facebook profile, you know, but you're limiting yourself in terms of things like organic search and email and paid search and all those other channels that, kind of, come in so you know, there's a bit of risk associated with that, but you certainly can do it. I just think that you would probably be better to be kind of supported by a website.
Will: Yeah, if only a very basic one. Also, remarketing. I suppose there are remarketing opportunities and, like you say, cross-channel remarketing opportunities between search, social ,display, etc., right? Okay. So you need a social profile, you do ideally need a website, an e-commerce website, what else?
Cathal: And then a product feed.
Will: That's the technical bit. That sounds like the tricky bit.
Cathal: It does sound like a tricky bit, but they've got a Dumbo version, which is really great that allowed me to do it very easily. So, they've got this fairly straightforward version where in what's called something like Facebook Commerce Manager. So, Facebook Commerce Manager is your starting point. You have your profile, you go to Facebook Commerce Manager, and there you can upload products to what's called a product catalog. If you've got like three products or four products, say you're only like a small field retailer or something, you've only got a couple of products, you can literally just input them. You write their names; you write the price...
Will: You don't need any fancy sort of feeds sinking or anything like that?
Cathal: No feeds or anything like that. Now, if you're a larger website, if you're like a Littlewoods or an ASOS, or something that has like thousands and thousands of skews, you do want to have a bit more of an automated approach. That's where you use something like product feed or data feed, which sounds very, very techy, but it's just a spreadsheet. And I know we're in an audio medium right now, but I might as well explain how you do it if you will indulge me.
Will: Do it, please.
Cathal: And so fairly straightforward, you have your eCommerce store, you export your e-commerce store to a spreadsheet. Now, you've got, like, all of your products and your images and your links and your prices in a spreadsheet. All Facebook wants is the columns of those spreadsheets named in a certain way. So you just need to find out and you can just do a Google search for Facebook data feed column names and just rename your columns of your export and spreadsheet from your e-commerce store. Upload that...
Will: Yeah, and also it's worth mentioning that if you're on Shopify or if you're using WooCommerce... I know in WooCommerce, there is a plug-in, there's an extra, kind of extension to e-commerce you can get that syncs it. And that's quite useful because then, obviously, you can, you know, it automatically syncs new products, out-of-stock products, deleted products, and that kind of thing.
Cathal: Yeah, so the plugins are like the best best of all, you know, some websites on the plugins, that's why...because like as a kind of catchall, we definitely, kind of, mention the spreadsheet. But my preference is always plugins because essentially what happens is if a price changes on your website, it's updated automatically in the shop on Facebook and it's super, super easy. Like, there's zero maintenance on it. Once you set up that plugin, it's a direct communication between whatever you change in your website, updates in your Facebook store. So you've only one thing to manage and that's your site. And then everything else, whether it's Facebook shopping, Instagram shopping, Pinterest, any of the other ones will just update automatically. So, it does all the heavy lifting for you.
Will: Google, as well, Google Merchant Center.
Cathal: And Google too, yeah.
Will: Hello, a quick reminder from me that if you're enjoying our podcast series, why not become a member of the DMI so that you can enjoy loads more content from webinars and case studies to toolkits and more real-life insights from the world of digital marketing? Head to digitalmarketinginstitute.com/aheadofthegame. Sign up for free. Now back to the podcast. Right. So that's the basics of making sure your products are present in the social platform you wanna operate in. What are the key platforms? Instagram gets a lot of the limelight here. Where else can we showcase our products?
Cathal: So we can obviously integrate with Facebook as part of the Instagram, Facebook ecosystem, Pinterest, too. Snapchat does a little bit of stuff in certain markets. Predominantly, if you want scale, though, it is Instagram. Instagram is really where shopping makes a big difference because it's so visual. We do find a lot of the products that do fit into the kind of social commerce purchase world are fashion-based visual products, homewares, this kind of stuff. So within a visual medium and a purely visual social channel like Instagram, that's where it does happen. But you know other platforms to use are, obviously, as I said, Pinterest and Facebook. Over in the east, in places like China, we do have tools like WeChat, where we can do a lot of social selling and we can...
Will: So I get it, it's a simple system. People can buy your stuff in these places, but they're not really having much of a brand experience. You know, it's very transactional. They click on something, they buy it, and they just trust that it's in the post. So what about, kind of, customer service and reviews and that kind of extended, you know, part of the kind of customer experience? How does and can that play out with social commerce?
Cathal: It's considered as part of the wider strategy. So, while we really have been talking about the selling aspect, which is setting up your shop, doing your product feed, pushing out, you know, your product, either via paid ads, or hoping that they stumbled across your store organically. All of this stuff does need to be supported by trust signals, like customer reviews, like, you know, security checkouts, like all of the things that you would typically look for on an e-commerce site before you buy because we don't like buying off sites that ask for our credit card details on a non-HTTPS site or different things like that. So, we tend to find that customer reviews, about pages, organic posting, these are supporting efforts to, kind of, push people along the funnel within the social ecosystem. The social commerce aspect mean the hard, hard social commerce aspect is just like search in the end. It's just there to clean up. It's just there to capture that, kind of, initial intent and provide a simplified experience for the transaction to occur. So, testimonials are really important as a supporting interaction with the consumer. So as part of a wider social commerce strategy... And maybe I should have qualified this that it's not just set up your store and go. There's a number of moving parts that we do have to be mindful of, like, you know, organic posting for your brand, building your values, your trust, your community, all of that stuff, supporting trust signals, like customer reviews, security of checkouts, all of those different things make people, kind of, assured and reassured that they're making the right choice if they are ready to jump for an impulse buy. Testimonials would be important as part of that wider social commerce strategy, just not necessarily the store function.
Will: Yeah, I get it. And I think that's the point. That's a good point to make, that you don't just set up a product feed and start selling. You can do. I mean, there are definitely people who do this from home where if there's a very hot trend, like a trending product, like a very specific thing, you could, you know, drop-ship that product. So I just basically sell it direct from a warehouse in China to the consumer. There is a place for that. But, in general, you're not gonna build a million-dollar business off of a product feed. There needs to be that stuff around it. Like you said, it's social organic community for the channels of contact with people to make them feel safe, you know, and make them aware of you, make them like you, make them want to do business with you and know a bit about you. Yeah, I suppose after-sale stuff is the easy email address and the messaging strategy, isn't it? And that's where that, you know... Just because it's social commerce, doesn't mean to say you don't send them an email and have, you know, quite traditional, I would imagine, post-sale communications with customers, right? Because that's what works and that's how we make people feel confident and also how we, yeah, contact them in other places. So it doesn't just feel like it was just a throwaway one-off Instagram thing.
Cathal: Email's very reassuring, isn't it? Like, it's a real formal channel. It's like, we've got your order. It's no being looked after. So even though the transaction did occur on the social platform, an automated email, just kind of say, "Yeah, look, we have everything in hand. It seems like a, you know, worthwhile formal communication with the customer.
Will: You met in the nightclub. You had a great time. You still have to go to church to get married. Something like that. Is that the right analogy? I don't know. But do you know what I mean?
Cathal: Yeah, yeah, no, no, absolutely. It's just like, yeah, dude, like, e-commerce is hard. You don't just crack open a shop and start selling and then retire to the Bahamas. There's a lot going on, you know. So, you know, it is definitely a hard slog in every regard.
Will: It is, and there's no two ways about it. I mean, there's a bit of further watching, anybody interested in this should go on YouTube. And there's lots of people who've done sort of 48-hour experiments, like, "Can I set up a Shopify and you know, turn around 20 grand in a weekend?" kind of thing. Because I suppose it's become quite...it's entered popular culture, I think, this idea that you can just rock up on Shopify and with the right curated dropship products, create a boutique, and just start pumping out money at one side in the form of ad spend, and pumping out a bit more money on the other end in terms of product revenue and profit. So, I suppose that brings us on to, you know, promotion, like, is this essentially very heavily reliant on social ads in terms of promotional channel or are there other things we can do?
Cathal: I think it is. I mean, I think it's really heavily relied on social ads because the social ad integrations mean that everything is, kind of, being managed within this one ecosystem from your shop to your organic page to your paid advertising. The other thing is the dynamic remarketing, you know, where someone has, like, looked at a particular product either on your website or in your shop and then you keep seeing that product in ads, again, and again, and again, that's a very compelling type of ad proposition, you know, to businesses. They're like, I'll keep showing people the products that they look at and it's all integrated. And Facebook does it for me or Pinterest does it for me, you know. And the go-to place for a lot of organizations will be, let's just pay for a bunch of ads because it's probably gonna deliver a decent scale, good ROI, when done correctly, and it's easy to do. But as you say, there are other channels that can certainly support this, like, you know. And whether it's widgets on your own website, whether it's, you know, if you have an app. There's emails. There's loads of other channels that can support your social commerce activity. The starting point with everything is traffic. So where does the traffic come from? Ads are the easiest one. And then, you know, we'll need to, kind of, discover new avenues because otherwise we're just, you know, spending money on ads when we can certainly do a little bit of incremental with organic activity.
Will: And of course, a lot of this takes place on Instagram, so presumably, influencers play a role.
Cathal: One of my favorites... So influencers, you know, I...cynical when it, kind of, came out because of my advanced age. And I was quite cynical when influencers, kind of, started coming to the fore. It's, you know, all these, kind of, ridiculous things going on and on, and no one really knew what was happening. But with social commerce and with affiliate marketing, you can give your influencers affiliate links, which are trackable links that will show how much traffic they brought to your website and how much revenue is generated from that traffic. You can then have an arrangement obviously with that influencer to give them something like a commission for every sale that they make. You know, so rather than influencers just doing a bunch of wacky creative stuff, they are tied to a kind of, revenue-based payment structure that if they don't sell anything, they don't get their commissions, but the more they sell on our behalf or influence those sales on our behalf, the more commission we give them. So, it's where affiliate marketing which is people selling your products in their stores, in their websites, or whatever, and influencers coming together to make it something just a little bit more tangible and less, kind of, makey uppy. You know, so because we're trying to sell stuff here. So you don't want to just hand the 25 grand to an influencer, who will maybe put your product in a swimming pool and set it on fire. And then that's it. You know, you want to know that there's actual tangible returns from this. And that's what affiliates are, kind of, doing now.
Will: Yeah, yeah, I get that. We did an episode on influencer marketing, actually, a few months ago, went deep into that topic. It's also a topic that's close to my heart, something I've worked a lot in on both sides of the equation, I have to say. And I agree. I mean, I think that for the influencer marketing, there was a lot of hype around it, sort of, 12, 13 years ago, something like that. But then it, sort of, got a really bad name. And it was really trashed because of all the, kind of, you know, scandals with bad disclosure with celebrities accidentally pasting the whole email from their agent into the Instagram description and stuff like that, you know, like some real howlers. And just a general, I think jadedness on the part of consumers, but I think it's matured, and I think it's become useful and bit more respected again as a channel. And, you know, I think we've all realized it's not all about trying to get the Kardashians talking about your product. It's about getting the right people, even if it's someone with 3,000 followers. Hey, if they're the right 3,000 followers, I wanna work with you, you know. And so that we've seen the rise of micro even nano influencers.
Cathal: Nano influencers, yeah.
Will: And the blurred line between customer and influencer and all that. So, yeah, I mean, I can see how that plays into social commerce because essentially, you know, it's people showcasing our products, but with the rise of social commerce, that they are showcasing actual products that people can act on and buy, rather than just an image that, "Is that a product in it?" You know, and it's a bit more of a direct sales channel in that way, isn't it? Even on Instagram now, as well, when an influencer creates a post or anybody creates a post, they can market it as being a brand collaboration and they can tag that brand in a very specific way. So we're seeing the formalization of a few things there. And clearly, I think it's important to say that it's not just a fashion thing because influencer marketing is always thought of like as this real fashion thing. I think any brand, you know, if you're a science brand or an engineering brand, there are influencers in your space and you need to find out who they are and work with them, for sure.
Cathal: Yeah, no. So there's been a lot of technology that's allowed influencers to really flex their muscles in the sense that it's not just putting up a picture on Instagram and there's no link. And there's a couple of hashtags and hoping for the best. This is a totally different integrated system where, again, you can buy all within the app, you know. So, the accountability comes in. And that's really important because there's just influencers asking for exorbitant fees, without, you know, delivering in a way that can be measured and justified to your boss when you've asked for half a million euro or something, you know. So I think accountability with the technological advances in social commerce has, kind of, gone hand in hand with the resurgence of influencers, the credibility of influencers, and across all different industries. It just means we're not being messed around anymore.
Will: Yeah, you're right. There is that credibility and accountability. And again, it's another way that things have become clearer. And, you know, it's both to the user, the audience, and to brands, everything is just more out on the table, isn't it? Because products, I'll tag this product and influencers tag the brands they work within that way. And I think it all adds up to more authenticity, that thing that, you know, brands and influencers are driving towards is authenticity. And that's so important. Okay. So if you wouldn't mind just grabbing your crystal ball for a moment, what's in there? Where are we going with this? It feels to me, I've got to say, like, there's a long way to go. I mean, we're still largely just serving up mobile versions of web pages in a handy frame within social apps. And I know there's bit more integration being tested in direct payments and things like that. But where are we going? What's on the immediate horizon and where might this end up?
Cathal: So, my go-to point when it comes to any, kind of, future-gazing is to always look eastward and to see what's happening in places like China, and Singapore, and Taiwan, and these places that have a very mobile audience. So, the starting point is, it's going mobile. It's going big mobile. The reason is, first of all, again, back to the technology, computers don't have the same level of functionality as a phone in terms of, like, real-world, GPS, 24/7 cameras, all of these different things that phone devices actually have. So, what we see over in the kind of, Eastern markets is integrations of live feeds from influencers or key opinion leaders as they're known over in the Chinese markets and stuff. So, you know, we've got these direct sales things. There's all additional functionality to purchase. And payment happens within the app and there's apps within apps, which is something that fascinates me.
Will: The WeChat ecosystem and all that.
Cathal: The WeChat ecosystem, the mini-program system. So, WeChat is a vast one-to-one messaging app that's based in China that has much more functionality than a standard messaging app. So, you can host your own app within the WeChat ecosystem. So, if I have an app for a travel company, for example, I can have my app listed within the channels of WeChat. And I have all the functionality. I've got ways to engage with WeChat users. I can then text them things. I can send them live streams. I can send them content directly to their phone. They can pay via WeChat pay so the payment is integrated, and they can get discounts. Now this is something that hasn't been leveraged a lot in our markets and that's discounts and building up credit. It's like your Tesco Clubcard points. It's every time you go back to the mini-app, the mini-program for my travel company, you get a couple of points. And you can redeem those points on purchases and holidays and different things like that. If you play a game, I've got a little dice game or something like that in my mini program. And if you play a game, and you get a certain score, you get points to your club card points, essentially. And you can redeem those on additional... So if you book a flight or something, you can get upgraded to first-class and different things like that. So, I would put it down to we need to look towards what supermarkets are doing with their customer loyalty programs. And that's what's happening next with social commerce because it's a tried and tested methodology with shopping carts and collecting points and discounts. You know, it lends itself very easily to the social commerce ecosystems sphere. So, that's the world I think we're heading towards is a fully integrated multi-app, kind of, super location that offers other things like discounting and all of that. And it's going to be all in mobile phones.
Will: That's really interesting. So, yeah, loyalty and, sort of, cross-business loyalty. Is that what you're talking about? So you could accrue these kind of credits across different retailers?
Cathal: And they can all be redeemed, yeah. And the other thing is because it's phone, they can be redeemed in-store. They can be redeemed with QR codes. There's all these other things that you can't do carrying a laptop around the place. It's gonna be social commerce with this, I don't know, transferable tentacle that goes across all of these different other touchpoints.
Will: It's kind of like a loyalty layer or something like that, isn't it that you could see a bit like air miles.
Cathal: It's just touching everything, all parts of the brand offline, online, on your phone, that kind of thing, you know, and simplicity of just having it all there. You pay with Google Pay. You know, whatever it is.
Will: Yeah, that's another thing, how might social commerce integrate with offline? Because, of course, again, we see the integration of WeChat with, you know, QR codes printed out on coffee shop counters and all over the place. How do you think social commerce might integrate with offline here in the future?
Cathal: It could happen based on, say, what's happening with COVID, that a lot of high street stores become, like, where you go to try something, but may not necessarily buy it. They're almost like showrooms. So, with your social commerce stuff, it's the redemption of points and access that you can then buy that product at a lower rate online if you've scanned it in a shop or something. So, it's all about redemption and it's all about loyalty and repeat purchase. So the thing is, like, loyalty points cost nothing. Like, for a brand to do a loyalty point, you have to spend, you know, $200 to get 5 points. You know, five points is nothing to around, you know, but to a consumer, they start accruing over time and they really think they're getting something in return for it. So, it's a very good methodology to use those offline experiences, like, the showroom experiences to accrue points to purchase them online.
Will: That's really interesting. Anything else to look out for on the horizon do you think?
Cathal: Well, it's interlinked, actually. So, the other thing, you know, it's been around for a very long time, is user-generated content. So UGC, user-generated content is when your customers will do something on your behalf because they like you or you've given them something in return. So they've checked in, in your store, they've gotten some points from your social commerce program, and they write a nice review. They will demonstrate themselves wearing the product, you know, showcasing the product, demonstrating the product. so other people can see how it's used, other people can get that social proof, that social reinforcement. They're building your brand for you in return for, yeah, again, those loyalty points, those discounts, different things like that. And that'd be a really powerful lever because people like people. We've talked about testimonials already. It does lead to more sales. It's a good world for brands to go to, to have their customers sell on their behalf. So that would be another area I'd think of.
Will: You know, we did an episode a couple of months ago about conversational commerce. Do you think chatbots inevitably will also play a role?
Cathal: They do feature in it. And that's the thing. It's kind of... A lot of the questions that people ask brands on social media are, what's the size? What's the delivery time? All that stuff. People use social channels to communicate with brands because it's easy. Yes, they will have that postal address where you can send them a letter or a phone number and be on hold for two hours but it's much easier to tweet at someone or send a DM on Instagram or something. There's a lot of integrations, a lot of tools that will manage those conversations for you, either in a customer service way, leading to a better customer experience, and then hopefully better sales, but also to funnel people who ask, kind of, sales-based questions into, kind of, discovering the right product for them. So, they'll have automated responses, like, what size you're looking for? Is it a gift? What color? You know, what's your price range? And they will, the bot will then scan the inventory, and present the customer with a bunch of different options that they can go ahead and buy. And it's like talking to that sales assistant in a store, who will bring you over to the rack and show you, you know, the best Nespresso, kind of, flavors for you or whatever it is. You know, they will guide you. We typically know what people are looking for. And all we have to do is set the conditions in a chatbot to guide them through the purchase process. If it's not completed, how can we recover it? So, it does a lot of heavy lifting for you. It takes a lot of hours away from people having to actually manually deal with DMs. So chatbots are getting there. But I think people fear them at the moment because that looks hard. But to be honest, it might not be as hard as you think
Will: Well, that's great. So thanks so much for telling us all about that, Cathal. It's really interesting. I think what's so compelling about it is that, as with all social media tools, it's such a leveler, you know, huge brands like, you know, PepsiCo, and Levi Jeans, and Nike, they've got access to exactly the same tools, as we have, you know, and people running businesses from home selling handcrafted goods. And it's all there to be used to reach the exact people who want your products, regardless of where they are in the world. And I'm sure that that can only be a good thing, right?
Cathal: Definitely. I mean, the thing is, we just need a mindset shift that social media is not just this brand channel, it's an actual commercial channel and a very good commercial channel because it's just so easy. It's the one-click buy, and it really does work.
Will: Yeah, I think that's the thing. The reason it's so great and moving at such a pace is because it's all about the user. It's all about the audience. It's just making things easier for them. And anything that is, you know, truly user-centric is a good thing, I think. Well, thanks a lot, Cathal. That's great. Lots of insight there. Lots to think about. And yeah, thanks for your time. Appreciate it. One last question. Where can our listeners find you online?
Cathal: Oh, I'm all over the internet. You know, LinkedIn, that's where to find me. That's my social commerce social space that I'm very linked with.
Will: And Cathal Melinn... Cathal is an Irish name, isn't it? Remind us of the spelling so people can find you.
Cathal: Oh, yeah. So Cathal is C-A-T-H-A-L. It was the ninth most unpopular name for newborn babies in Ireland a few years back. So, certainly a name in decline and a certain tongue twister for a lot of non-Gaelic speakers. But yeah, that's where to find me.
Will: That's you.
Cathal: That's me.
Will: Cool. We will indeed. Thanks a lot. Appreciate it.
Cathal: Thanks, Will.
Will: If you enjoyed this episode, subscribe wherever you get your podcasts. And for more information about transforming your marketing career through certified online training, head to digitalmarketinginstitute.com Thanks for listening.