Debate: Is social commerce a second chance to get ecommerce right?

Topic: As social commerce rises, is there a second chance for
Australian brands that lagged on ecommerce?




Jodie FoxJodie Fox
Director of fashion and founder
Shoes of Prey

Affirmative – There is an enormous opportunity for Australian brands that are only getting online now.

Brands don’t have to learn from scratch. Mature online markets like the US and UK provide those new to online with an enormous wealth of learnings to take advantage of that is published or easily observable. There is also a reasonable amount of generosity of time and knowledge between entrepreneurs offshore – all you need to do is ask.

There’s still a long way to go. I believe that there is an extraordinary amount of innovation to occur in the way brands engage online. The power shift from broadcast to dialogue is still very much in its infancy from both branding and resource points of view. Resource is a tricky one to crack – scalable, personal communications in every instance are not easy to manage as you grow.

There are new opportunities all the time. There is a constant stream of new online social touchpoints for brands to be present for their customers that can yield really exciting results – whether purely branding, community building or conversions. Take Pinterest, for example.

There’s something great to sell. Research shows that Australian consumers shop online to gain convenient access to goods/services – especially those that aren’t easy to obtain here. There are plenty of unique, exciting brands that are currently geographically confined, even domestically. There’s an amazing opportunity to access the greater domestic market, and then the world.

The real risks that exist with respect to Australian brands and ecommerce are, first, engaging in ecommerce without having considered why you would do it for your business and, second, running in the other direction and not engaging with it at all.


Karson StimsonKarson Stimson
Founder and director

Affirmative – Social commerce or no social commerce, Australian brands and retailers (whether already online or not) need to play to their advantage of being local. They need to start investing in digital services and talent, and start focusing on lifting the quality and depth of their offering.

There is no doubt that Australian brands are coming off the back foot when it comes to digital commerce. Currently 25% of Australian online retail is done offshore (38% in apparel). The Australian consumer has already become less loyal to Australian brands and is demanding premium service, quality, speed and a wider choice of range. Unless our retailers get this right, Australian customers will continue to take their dollars off shore.

Three key factors in this are:

Availability. Large format international retailers like Best Buy and Walmart are offering 10 to 25 times their product range online compared to what they have available in-store. In comparison, some of our largest retailers only put 10% of their product online.

Convenience: Those local retailers with bricks and mortar have a great advantage and need to leverage this in combating the international leakage by offering a compelling omni-channel experience where a customer can access products and service wherever and however they want. When internationals are able to land their goods here in 24 to 48 hours, and offer free returns, a much broader product mix and overall slicker experience, our local players need to lift their game.

Price: While the Aussie dollar is so strong it makes buying overseas very compelling. This requires a solid pricing strategy as shoppers are savvy and price conscious.

The real advantage of social commerce is in enhancing an existing commerce offering. It enables brands and retailers alike to leverage the power of community, word of mouth and advocacy. It needs to be done well, truly supported and embraced by the business (Best Buy, Sephora and Burberry are all great examples of this). But it is definitely not the silver bullet for the latecomers.

We would advise they focus on visibility, product availability, convenience, service and leveraging the advantage of being local.


Peter NoblePeter Noble

Affirmative – One of the most exciting things about being in the online retail space at the moment is the innovation taking place in the sector both here and overseas. At Citrus, we certainly don’t believe the ship has sailed for those ecommerce laggards in Australia yet. There’s still time to embrace the fundamental change in consumer shopping behaviour we are witnessing, and social commerce will certainly play a role in this in the years to come.

The advantage of being late to the party is the lessons that have been learned by the pioneers can now be applied to the newcomers’ ecommerce strategies. F-commerce was heralded as the next big thing in online retail, but this hasn’t come to pass, with a number of high profile retailers including Nordstrom and Gap shutting down their Facebook storefronts due to poor take-up.

However, opening a storefront within Facebook isn’t social in itself. What successful social commerce is really about is giving customers the tools they need to support the social interaction that surrounds the shopping experience.

We’ve seen great innovation in this space take place in Australia, with Sportsgirl’s ‘virtual mirror’ a good example of a retailer tapping into buying behaviour, by giving its customers the ability to garner opinion from their social networks on whether they should buy a garment direct from the changing room.

For those Australian brands that have lagged on ecommerce, social commerce does not offer the silver bullet. Australian retailers must first get the basics right: world-class ecommerce sites, mobile, the establishment of one-to-one relationships with consumers, fulfilling orders in a way that’s convenient and cost-effective, and the use of customer service as a key driver of loyalty.

It’s not too late for Australian retailers, but innovating and responding to the needs of the customer are key to making a success of online retail.


David OdgersDavid Odgers
Director, sales and marketing

Affirmative – The emergence of social commerce, coupled with the rise of mobile commerce and continued growth of online commerce, represents a significant opportunity for Australian brands to go to where their customers are and engage with them in relevant ways.

Australians are keen to share their brand experiences with online communities, as we’ve seen with the rise of Facebook, Twitter and Pinterest. Globally, eBay is experimenting with product innovations in this space. For example, in the US, a social commerce app has been developed for Facebook that shows eBay product recommendations based on the user’s social data. Social networking sites house a substantial amount of data that can be used to provide targeted brand experiences for every consumer. Before brands embrace the opportunities for engagement via social networking sites, however, businesses need to ensure they have explored ecommerce and mobile commerce to its full capability.

We know Australian ecommerce is continuing to experience exponential growth, with eBay’s top 2000 Australian sellers growing revenue by a phenomenal 45% in 2011. More interestingly, our 2012 Online Business Index revealed that seven out of 10 online businesses believe mobile commerce will play an important role in their business strategy this year.

Australia has the third highest smartphone penetration globally, and eBay Australia has the highest proportion of total sales coming from mobile devices among all eBay marketplaces globally. It’s estimated that in four years’ time, more people will use their mobile to access the internet than desktop computers. This means that there are potentially more hours in every day that people choose to shop.

Already, we’re seeing that four million Australian smartphone owners are using their phones to compare prices and research products before making a purchase, and over a million of those use their mobile phones to purchase an item. It is the mobile device that continues to blur the line between online and offline, as the focus centres on providing the best end-to-end experience for customers.

Social commerce will increasingly play a role in how brands reach new and existing customers, but businesses need to ensure that this is part of a complete digital strategy to enable commerce.