Markets are conversations”. This is how began over twenty years ago The Cluetrain Manifesto, a document taken as an essential reference by those who wanted to orient themselves in the radical transformations caused by the advent of the web in commerce.
The speed of markets
The subtitle, then, seems tailor-made to stand any test of time and be placed at the centre of any reflection on the present: “the end of business as usual”. As a result of the internet, the key message is that the markets were evolving faster than the companies that used them. Since then, conversations have become one of the dominant traits of the online market.
The pandemic has wreaked havoc on markets; some trends dictated by the emergency will prove to be short-lived, whereas others can no longer be ignored. Jason Thomas, head of global research at The Carlyle Group, one of the global giants of asset management, last September wrote: “it is likely that the most salient disparities in two years’ time will be between companies within the same industry, as some management teams focus on reinventing their businesses while others endeavour to return to January 2020 levels with only minor adjustments”.
In our times, and even more so after the health emergency, social media have affected social relationship, allowing people to acquire information, share ideas, interact with other people, communities and markets. The average daily social media usage worldwide is moreover indicative of their inherent commercial potential. According to Global Web Index estimates, this varies from just under two hours in advanced Western countries to more than three hours in other geographic areas. The difference is in the results: if in Italy the average (111 minutes) is slightly lower than in China (121 minutes) and the United States (128 minutes), their commercial importance is significantly lower.
Given the social relevance of the phenomenon, it is unthinkable not to make it part of any brand’s marketing mix. The purposes are obvious: have a valuable tool to reduce the distance with the own target audience, identify behaviours and trace sales and after-sales paths. In fact, group or one-to-one conversations respond to the radical change of the commercial flow – once one-way – from the brand to the consumer.
The new centrality
The delay in understanding and accepting changes, however, is still consistent with the times and forms of digital innovation, and this should not come as a surprise. Emblematic is the case of Ocado, a leading online retailer and also a provider of top-notch technology for the sector: due the massive rise in the number of access requests during the first phase of the pandemic, the company had at first feared a cyberattack. Or, again, the fact that when talking about social media the thought immediately goes to Millennials and Generation Z, to then find that it is the boomers generation that, against all odds, show the highest propensity to buy online.
Meanwhile, e-commerce, often still considered an alternative to traditional commerce, is already evolving by assigning the potential centrality of the shopping experience to social media which, by their very nature, are linked to discovery, connection and enjoyment, all the more valuable in the absence of physical experiences.
The accelerated pace of change is a post-Covid constant. If e-commerce flanked and, in a period of lockdown, replaced the social interaction of in-store shopping, social commerce, albeit in a different way than in the past, is proposing it again. Information on a single product, the combination of several products or the success of a trend occurs through information obtainable from blogs, wiki systems and the sharing of individual contributions in the various communities. In short, conversations of various origins to which listening lends itself much better than trying to guide them.
The global social market will reach $604 billion by 2027 (ResearchAndMarkets.com). Estimated at $89.4 billion in 2020, this result would be possible at an annual growth rate of 31.4% over the period considered. Hootsuite recently conducted a survey of its customers to rank the importance of the goals pursued with social media. In first place, predictably, the acquisition of new customers (73%), then brand awareness (64%), followed by conversions (leads, purchases and product requests) with 45%.
But more than ‘translating’ into social language the established sales patterns (at serious risk of obsolescence what’s more), it is useful to look at the real novelties that come from China, where an advanced technological platform has defined the new way of being on the web to hundreds of millions of individuals. In 2019, Mark Zuckerberg stated that he regretted not paying more attention to those within Facebook who suggested he look at WeChat. If the worldwide e-commerce has discovered the value of conversations, we can in this case talk, in all respects, of a model.
Many brands often misunderstand the question: what kind of content is desired, what form should the relationship take? It is not an easy task as social media performance skills must be used to recreate the missing physical experiences and, hopefully in the near future, complement them. On WeChat, brands and distributors meet their customers not to propose a catalogue or a promotion but, in the first place, to establish a relationship, thanks to the value induced by the technology itself.
Overall, search engines and TV ads remain, for now, the most common means of brand discovery. The ads on the platforms follow closely, but in perspective they weigh more heavily due to the many possibilities of combination with other options specific to social media. Conversations are privileged means of branding and increasing offer awareness in community life.
Social commerce will be increasingly viewed as a mainstream sales channel on a par with e-commerce sites and offline stores. This is thanks to the tendency of social media to introduce simple and direct commercial functions such as shoppable posts, the growing popularity of live streaming, even excluding China, and the usage of gamification.
Sitting back and waiting for things to return to ‘normal’ instead of building the future, will be a sure way to not be a part of it.