With average conversion improvements of 40%, Social Commerce is real and there are 2 key aspects; Recommendations and the power of groups.  Recommendations is something that’s 2/3 years old on the web – it’s basically where a product shows customer reviews from real people.  Our partners at Bazaarvoice are leaders in this respect and have some interesting statistics – 85% of people will trust a customer review over the site content and having reviews increases a conversion by up to 70% (on a reviewed site, 0 reviews leads to a –30% downturn, 1-5 reviews 20% increase – even if they’re negative, 5-15 reviews 40%…).

The power of groups is all about automatically twittering / facebook status updates during the path to purchase, with the real power being that a friends list contains groups of people who are demographically similar.   For example, a customer buy’s a Plasma TVs and his Twitter account is updated:  “Jim bought a new 46” flat screen”.  Human beings are status driven animals, and posts like this will compel friends think about buying buy a 50″ flat screen.  Our partners at ATG support this automatically with version 9.0, and Bazaarvoice support this with their SocialVoice product again with measurable impact on business.

SKU based retail (clothing, electronics etc.) is taking a lead in social commerce but other industries will catch-up and as always the first to implement will benefit from being the first to market.  For instance, recommendations are becoming common for direct to consumer financial services products such as credit cards, but is not common in insurance.  The first health, general and life insurance companies to implement recommendations should see a big increase in direct to consumer sales.  Again, social network updates will also impact this market, if a friend broadcasts that they received 12 months for the price of 10 on home insurance with Provider X, it’s likely to impact sales in a positive fashion.

The next step is to embed the path to purchase into the social network.  With the ease of use of the Facebook and OpenSocial APIs this is a fairly trivial task and one which could lead to a revolution in internet commerce.

• ATG’s ability to rapidly develop a new online store, and to maximise conversions with personalisation software is still market leading
• With the advent of Web 2.0, the personalization, user profiling, content management, data exposure and integration functionality made me realise that ATG has been a leader in this area, providing Web 2.0 functionality in the early days of the web

In the early naughties it was often difficult to explain the capabilities of ATG to users – with Web 2.0 ideas becoming prevalent it’s now much easier to explain them leading me to think that ATG was indeed ahead of it’s time.