Social Selling Is The New Retail

Today’s show is the second in a mini-series on the changing face of business. On Friday’s show we talked about how Google is keeping search traffic on the Google platform and is not sending organic search results to the source pages in the way it used to. Traffic to businesses is dramatically reduced. This will cause many businesses who relied largely upon organic search to either adapt to whatever will replace organic search, or they will face bankruptcy. 

This is also going to affect every aspect of retail. So much has been written about the retail apocalypse. There is no question that the footprint of traditional retail is changing. 

There is much less diversity in shopping experience today than when I was a teenager. In the US we had numerous department store chains including Bloomingdales, Macy’s Sears, Kmart, Bergdorf Goodman, Filenes, Lord & Taylor, Neiman Marcus, JC Penny, Walmart Target Montgomery Ward, Ames, and countless others. Today, only a small fraction of those remain. 

We are all familiar with the e-commerce revolution and how Amazon and Walmart are increasingly dominating this space. Even major retailers including Home Depot and Best Buy have a larger online catalog with products that are only a couple of days away from your home. 

But the new revolution is in a form of shopping called social shopping. This has been in existence in China for more than 8 years and is still in experimental stages in the US on a limited basis with specific platforms. 

So what is social shopping?  It is a method of e-commerce that integrates the social aspects of human interaction into the online shopping experience. It leverages social media platforms and online communities to facilitate the discovery, research, sharing, and purchasing of products and services. Think influencers. Think buying events.

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Episode Transcript

(00:01):
Welcome to the Real Estate Espresso podcast.
Good morning Shot of what's new in the world of real estate
investing. I'm your host, Victor Minash.
Today's show is the second in a miniseries on the changing face
of business. On Friday's show, we talked
about how Google is keeping search traffic on the Google
platform and is not sending organic search results to the
source pages. The way it used to traffic to

(00:22):
businesses is dramatically reduced.
This will cause many businesses who relied on organic search to
either adapt whatever is going to replace organic search or
they'll face bankruptcy. This is also going to affect
every aspect of retail. So much has been written about
the retail apocalypse, and there's no question that the
footprint of traditional retail is changing.
There's much less diversity in the shopping experience today

(00:44):
than, for example, when I was a teenager in the US.
We had numerous department storechains like Bloomingdale's,
Macy's, Sears, Kmart, Bergdorf Goodman, Filene's, Lord and
Taylor, Neiman Marcus, JC Penney, Montgomery Ward, Ames,
and then of course, Walmart and Target and countless others.
Today, there's only a small fraction of those remaining.

(01:06):
We're all familiar with the e-commerce revolution and how
Amazon and Walmart are increasingly dominating that
space. Even major retailers like Home
Depot and Best Buy have a largeronline catalog, products that
are only a couple of days away from your home.
But the new revolution is a formof shopping called social
shopping. This has been in existence in
China for more than eight years,still in the experimental stages

(01:30):
in the US on a very limited basis with specific platforms.
So what is social shopping? It's a method of e-commerce that
integrates social aspects of human interaction into the
online shopping experience. And it leverages social media
platforms and online communitiesto facilitate the discovery, the
research, the sharing, and the purchasing of those products and

(01:50):
services. Think influencers.
Essentially, social shopping attempts to mimic and enhance
the social interactions found inphysical malls and stores.
It's a little bit like asking a friend for advice.
It starts with social interaction.
It encourages communication and recommendations among shoppers,
often leveraging user generated content like reviews, photos and

(02:11):
videos. It aims to reduce the friction
in the buying process by allowing users to discover and
purchase products directly within the social media app
without having to navigate to anexternal website.
Customers are more likely to trust recommendations from
people they know or authentic user reviews over traditional
advertising. Social shopping harnesses this

(02:31):
word of mouth power. Social platforms are powerful
tools for product discovery. They usually involve direct
shopping within the social mediaapplication.
Instagram is doing this now withsomething called Instagram
Shopping. Brands can set up shoppable
posts, stories and wheels with product tags that allow users to
tap and purchase directly withinthe app.

(02:52):
Sephora, the cosmetics company, is a great example using user
generated content and influencerpartnerships.
Facebook Shops has created customizable storefronts on
Facebook, allowing customers to browse and buy products without
leaving the platform. The clothing chain H&M is active
in this arena. There's the TikTok shop.
This started in fact in China, but it's integrating the shop

(03:14):
tab into profiles, allowing product tagging and videos, and
it supports live shopping campaigns.
Your man Pinterest is using Viable Pins, ideal for visually
driven products, allowing users to purchase directly from pins.
Companies like Wayfair are usingthis.
Now there are shopping communities.
These platforms bring together like minded people together to

(03:34):
discuss, share, and shop based on common interests.
Since people spent a large percentage of their time on
social media platforms, these platforms are looking for new
ways to monetize the experience.I can tell you that Facebook is
looking at the types of posts you make on social media.
If posts have a business angle to them, they determine that
you're actually a business user,and they'll unilaterally change

(03:55):
the nature of your Facebook account to a business account,
which means the reach of your post will be suppressed.
If you want greater exposure, you're going to have to pay for
it by purchasing advertising. I know this because it's
happened to me. Now think about the types of
events that might create artificial scarcity.
What if you built a bunch of hype around a particular
product? Imagine if you could get a

(04:16):
volume discount on, say, I don'tknow, a new smartwatch.
But you don't need 200 smartwatches, You only need one.
What if you all participated in a buying event hosted by social
media influencer where you all join the event at the same time
and participate in the live event and then all the
participants get the discount? This is somewhat reminiscent of
the blue light specials at Kmart.

(04:37):
Staff member would bring a cart with a flashing blue light next
to a discounted item. And then there'd be an
announcement on the PA system saying attention shoppers,
there's a blue light special in aisle 4 for the next 10 minutes.
And then there would be a wave of people running over to aisle
4 to see what was on sale and a frenzy of buying would take
place for the next few minutes. This is an area where the United

(04:58):
States is absolutely playing catch up.
Duyen, the Chinese version of TikTok has had this now for
about 8 years and it's emerged as a absolute powerhouse and
social commerce. It's transformed from a short
video app into a full-fledged shopping ecosystem.
It allows for live streaming commerce, real time questions
and answers, limited time offers.

(05:20):
All of this offers a seamless purchasing experience without
leaving the app. Then of course, there's WeChat.
This is that super app that incorporates all kinds of things
that are integral to daily life in China.
It includes A robust e-commerce feature within WeChat.
Brands can create many applications within WeChat, and
it makes it possible for customers to buy products
directly within the application.There's many, many examples.

(05:43):
So initially these social eventswill be led by influencers who
have a large following, but eventually AI influencers will
outnumber real human influencersin this brave new world.
All of this seems focused on thebusiness to consumer.
So far, I'm not seeing anything that's truly optimized for
business to business. For those of you in real estate,
we need to be thinking of what the new business models will be

(06:05):
as AI changes the way marketing is done and a social selling
changes the way people buy things online.
As you think about that, have anawesome rest of your day.
Go make some great things, Haen,and we'll talk to you again
tomorrow.