Google+ has come a long way since it’s launch in June.  Its estimated user-base of over 40m pales in comparison with a Facebook following of over 800m, but for the first time in a long time, the giant of the social media world will at least be glancing over its shoulder. And last week, Google+ announced the next stage of its development – the launch of brand pages.

In terms of how these operate, they’re very similar to those of its larger rival – the brand posts to its stream, and fans ‘+1′ (the Google equivalent of Facebook’s ‘Like’), share or comment.

Google+’s brand pages do have some disadvantages over that of its rival – only one page admin is allowed at present, there are no analytics as to how posts are performing and competitions and promotions are not allowed.  There is also no funtionality to replicate Facebook’s applications and tabs, limiting brand’s flexibility on the network.

But Google+ brand pages do have some significant advantages too.

Firstly, there’s the ease with which fans can connect to their chosen brand. Brand pages are fully inetgrated into search results and simply prefixing the brand name with a ‘+’ in a Google search (i.e. ‘+Burberry’) is enough to find the brand’s page and connect to it from within that results page - a process Google has dubbed ‘DirectConnect’.

Secondly, there’s the ‘hangout’ feature – a video-conferencing facility which gives brands the opportunity to interact with their fans live, rather than  just via posts and comments.

The 3rd benefit derives form the crucial difference between Google+ and it’s larger rival – circles.  Circles allow Google+ users to group their contacts, and keep their conversations with each circle discrete from other circles if they choose to do so. Brands can separate their customers into circles too, albeit it only into 3 groups at present – VIPs, customers and team members - but it does allow at least some differentiation between messaging rather which will be useful for luxury brands wanting to differentiate between customers and fans.

But the final benefit is the most important of all – and that’s the advantages that we expect Google+ brand pages to confer on that brand’s content in search results.

As each brand shares content with it’s community on Google+, that content will attract ‘+1s’ - Google’s equivalent of the ‘Like’.  When the friends of those ‘+1ers’ find that content in the process of searching whilst they’re logged into their Google account, they’ll see which of their contacts has recommended it. If, as expected, this makes it more likely that those contacts will click on those links, brand marketers will see improved click through rates from content shared on Google+. Hence, they’ll be encouraged to share even more content on the new social network and make it a more integral part of their social marketing going forward.

Are these compelling reasons to build a brand presence on yet another social platform?  Yes, probably.

In the premium world, Burberry has already taken the step. At the very least, its a chance to secure your brand presence on this new platform and prevent others from setting up fake pages. At best, the costs of managing yet another social profile could be offset in spades by the enhanced performance of search activity.

It’s early days for Google+ and many have reservations about it – by size it’s still a niche community, there’s no evidence as to whether its community is unique to Google+ or can still be reached on Facebook and it’s following is still predominantly male and technology-focused.

But its inextricable links with Google search – both in terms of the integration of Google+ brand pages into search results and in terms of content shared on Google+ enjoying advantages in search – make Google’s fast growing social network one to keep a very close eye on.

By: Graham Painter

Posted in Online, Social Shopping | No Comments »

One of the features of the recession has been the rapid growth of traffic to coupon and reward sites, as consumers look for discounts to justify their little indulgences amongst the economic gloom. According to Ofcom, in the 12 months to April ‘11 visitors to reward and coupon sites increased by 25%. 40% of al UK web users now visit such sites.

Much of this growth has been driven by the daily deals phenomena.  Users sign up to a daily deals service in their locality and then receive daily emails letting them know about offers from local businesses, usually at highly discounted rates. For some services, the deal is available to all irrespective of take up – for example, Kelkoo Select. But for others the deal only becomes triggered once a certain critical mass of users opt to take it up – hence the term social shopping, as it someone wants a deal, it’s in their interests to get their friends to take it up as well.

Groupon has grown to be the dominant social shopping service in the UK. It’s growth has been rapid since it’s UK launch in January 2010 and by April this year, it was reaching 16% of all internet users. It’s nearest direct rival, LivingSocial, was only 1/8 of the size in the same month, although a recent TV advertising campaign may have narrowed the gap.

So daily deals seem to be on an up in the UK but things aren’t so rosy in the US, and trends have a habit of migrating across The Pond.

Although Groupon in the US commands a healthy 115m subscribers, it appears that those subscribers are become increasingly fatigued with daily deals.  Figures from Experian Hitwise show that Groupon has lost 50% of it’s web traffic since it’s peak in June.  The holiday season may explain some of the fall, but LivingSocial has grown by 27% in the same period and is now almost half the size of it’s rival.  If this trend continues, Groupon will be in the number 2 position by the end of the year.

But a deeper malaise in the daily deals industry has been revealed by those that are getting out or scaling back.

After just 4 months, Facebook recently announced the end of their Deals experiment – although check-in deals will remain.  And Yelp in the US is seriously scaling back it’s daily deals service.

The problem with this market are 2 fold – the barriers to entry are too low and the sales and marketing costs are too high.  The market has been flooded with new daily deals services and consumers in the US have simply become sated with choice - in fact, 52% of US admitted being overwhelmed by the number of daily deals emails in their inboxes. In addition, the sales and marketing costs have proved to be so exhorbitant that not even the number 1 player, Groupon, is turning a profit.

For brands, the questions has always been whether offering product at such heavily reduced prices makes sense.  Clearly, if the product is ‘distressed’ or ‘end of line’ and the transaction makes sense at the discounted level, then promoting via dail deals services makes sense. Brands such Gap have also had success with discounted gift vouchers.  But the debate rages as to whether social shopping creates new customers, or just offers discounts to those who will never pay full price.

It’s a little early to tell exactly what’s going to happen to the daily deals market – a 2 month dip in the market leaders traffi, albeit serious, is not yet a trend. And whilst the cost of living continues to rise, it makes sense that services that allow consumers to enjoy indulgences at much reduced prices will continue to thrive.

But what we are probably seeing is the start of consolidation in this industry as those sevices with less resources get weeded out and those less committed deal hunters fall away. However, we believe the daily deals story still has some way to run.

By: Carla Burgess

Posted in Online, Social Shopping | No Comments »

Group buying, or social shopping, is certainly in the news.  Google’s unsuccessful attempt to buy the market leader, Groupon, a couple of months ago was followed by rumours that Groupon is planning an IPO valuing the company at up to $15bn.  For a company that launched just over 2 years ago, that’s a quite an achievement.

Hence, it’s hardly surprising that Google is reportedly launching its own service – Google Offers – after its advances were spurned.

But is group buying something that premium and luxury brands should be paying attention to? To answer this question, we need to look a little at the roots of social shopping and where it’s going.

Group buying was founded on 3 principles:

- Local offers from local businesses – hence, consumers sign up for the Groupon that relates to their locality, be it London, Brighton, Manchester or Nottingham etc

- Great Offers – retailers offer huge discounts. In some cases, up to 90% off. It may be on distressed stock, or it may be a sampling campaign with the aim of giving consumers a low cost trial in the hope they’ll come back and pay at full price at some point in the future. Or, more commonly now, it may be a discount on gift vouchers (£50 gift voucher for £25 etc).

- Social – the offers are only triggered when those interested reach a pre-determined level. Hence the retailer is guaranteed a minimum volume of business for their discount.

Premium and luxury brands are less likely to have a purely local focus and/or devalue their brands by discounting heavily, so surely group shopping is not for them? Not necessarily.

First of all, we need to consider the audience – younger, female, educated and relatively affluent.  The core market for many fashion, accessories and beauty businesses.

Secondly, because of its local focus, social shopping could be a relatively low cost way to create some tactical local noise and footfall for bricks & mortar retailers during key trading periods – for a new store opening or during quiet periods – by offering discounted gift vouchers for example.

And social shopping doesn’t necessarily need to be local.  Two of the most successful offers – Gap on Groupon and Amazon on LivingSocial – have been for nationwide offers for national brands.  Gap redeemed almost ½ million discount vouchers back in August 2010, driving footfall across their retail network of stores in the US. A retailer could use it for a national campaign.

But can the social shopping phenomena work for luxury brands that don’t have ‘distressed’ or ‘end of line’ stock and for whom discounting is an anathema?

Perhaps, via a new service launched by Kelkoo called Kelkoo Select. What’s different about this service?  Well, discounts aren’t essential, although exclusives are.  Hence, exclusive preview events and added value offers can be substituted for discounts. And the ‘group’ in ‘group buying’ isn’t compulsory – hence offers don’t need to reach a critical mass before they’re triggered unlike Kelkoo’s rivals.

This service has just been launched so it’s still early days as to whether it will be a success. Could exclusives and upgrade offers work when the ‘hook’ for social shopping experiences has been big discounts?  And online phenomena like Google and Facebook have demonstrated that niche players can find it hard to survive the onslaught of a dominant market player once they spot a profitable niche and decide to move into it.

We should, of course, sound a couple of notes of warning, before recommending that brands grasp the social shoping nettle.  The audience may be understood demographically, but it is still opaque from a brand’s perspective – hence a brand won’t know whether they’ll be speaking to a new audience or just offering discounts to an audience of existing loyal clients.

And there is disagreement as to whether these services can work as a sampling exercise, or whether they’re followed by ‘offer junkies’ who won’t respond to anything other than big discounts.

But social shopping is only going to get bigger. Luxury and premium marketers needn’t necessarily participate – it’s not for everyone – but they should at least appraise the opportunity thoroughly to see if it’s right for their brand.

By: Carla Burgess

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