S1E12 – The Retail Avengers & The Future of Social Commerce

Welcome to Season 1, Episode 12 of The Retail Razor Show!

Social Commerce is one of the hottest (and noisiest!) topics in retail today! What exactly is it? How does livestreaming fit in? And what should retailers do to take advantage of this trend? As a retailer, how will you find the right platform to work with, and convert sales transactions? So many questions!

The Retail Avengers team is back with two special guests to cut through the clutter in social commerce: First, Mohamed Amer, a member of multiple retail tech advisory boards, a RetailWire BrainTrust member, and former global head of strategic communications for consumer industries at SAP. Second, a friend of the Retail Avengers on Clubhouse, Darius Vasefi, co-founder and CEO of Visional Commerce, host of the Retail Tech podcast, and frequent contract chief product officer. From our Retail Avengers team, Brandon Rael, Shish Shridhar and Jeff Roster join. Plus, for the recap returning guest, Alicia Esposito, VP of Content for Retail Touchpoints and a fellow RETHINK Retail top retail influencer, joins us to spice things up with some not-to-miss items you will not see coming!

Have you heard the news! We’re up to #20 on the Feedspot Top 60 Retail podcasts list, so please keep those 5-star reviews in Apple Podcasts coming! With your loyal help, we’ll be moving our way up the Top 20 in no time! https://blog.feedspot.com/retail_podcasts/

Meet your hosts, helping you cut through the clutter in retail & retail tech:

I’m Ricardo Belmar, a RETHINK Retail Top Retail Influencer for 2022 & 2021, RIS News Top Movers and Shakers in Retail for 2021, a Top 12 ecommerce influencer, advisory council member at George Mason University’s Center for Retail Transformation, and lead partner marketing advisor for retail & consumer goods at Microsoft.

And I’m Casey Golden, CEO of Luxlock. Obsessed with the customer relationship between the brand and the consumer. I've spent my career on the fashion and supply chain technology side of the business. Now I slay franken-stacks!

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Host → Ricardo Belmar,

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TRANSCRIPT

S1E12 The Retail Avengers & The Future of Social Commerce

[00:00:20] Introduction

[00:00:20] Ricardo Belmar: Hello. Good morning. Good afternoon. And good evening, whatever time of day you're listening. Welcome. Welcome to season one episode 12 of the retail razor show. I'm your host, Ricardo Belmar, a RETHINK retail top retail influencer, and lead partner marketing advisor for retail and consumer goods at Microsoft.

[00:00:36] Casey Golden: And I'm your co-host Casey golden CEO of Lux lock. I'm obsessed between the relationship of brands and consumers. The experience is everything. I spent my career on the fashion side and supply chain technology of the business. Now I'm slaying Franken stacks to power the future of commerce. 

[00:00:53] Ricardo Belmar: Well, Casey, this episode, we've got another amazing clubhouse discussion to share, and the topic is social commerce. Definitely one of the buzziest trends going on in retail right now. And of course, one of our 2022 predictions.

[00:01:06] Casey Golden: not surprised that our predictions keep working out this year.

[00:01:11] Ricardo Belmar: no kidding.

[00:01:11] Casey Golden: really hit a groove and dug into fundamental challenges to find these opportunities. I hate that I missed this clubhouse session. It's just a real treat for our listeners.

[00:01:21] Ricardo Belmar: Yes, indeed. It is. And keeping with last episodes example, we had two guests join the retail Avengers team this time in clubhouse. First, we had Mohamed Amer. Member of multiple retail tech advisory boards, a retail wire brain trust member, and former global head of strategic communications for consumer industries at SAP and second, a frequent friend of the retail Avengers on clubhouse, Darius Vasefi, a co-founder and CEO of visional commerce, host of the retail tech podcast and frequent contract chief product officer plus from our regular retail Avengers team, we had Brandon Rael, Shish Shridhar and Jeff Roster joining.

[00:01:57] Casey Golden: You guys took a deep dive on the value of current social commerce platforms and really identifying what works, what doesn't, and how live streaming is a centerpiece to this equation. I can't wait to listen and come back here and chat some more about it. Plus, we've got a repeat visitor to the show.

[00:02:15] Alicia Esposito from retail touchpoints, joining us for the recap.

[00:02:18] Ricardo Belmar: And spoiler alert. Our recap will have a few surprise discussion points that listeners will not see coming. So stick around.

[00:02:26] Casey Golden: I thought I was the one that takes us off script.

[00:02:28] Ricardo Belmar: No, I can do it too. You know, we have there's equal hosting privileges and everything.

[00:02:32] Casey Golden: In that case, let's go straight to the clubhouse session. Let's listen in to the Retail Avengers and the Future of Social Commerce. 

[00:02:44] Clubhouse Session

[00:02:44] Ricardo Belmar: Welcome everyone to the Retail Razor club. Our session today is the Retail Avengers and the Future of Social Commerce. So let me move into doing some introductions here with the folks we have up on stage. I'm Ricardo Belmar. I founded the retail razor club here on clubhouse, and I've been in the retail tech side of the industry for a better part of the last two decades working for different technology providers and managed service providers.

[00:03:08] Most recently joined Microsoft as a senior partner marketing advisor for retail and consumer goods. So I'm gonna move across the stage here. Darius, why don't you introduce yourself? 

[00:03:17] Darius Vasefi: Hey Ricardo. And everybody else good friends and the audience thanks for having me.

[00:03:22] My name is Darius Vasefi. I am the co-founder CEO of a company called Visional Commerce. As well as a startup studio called Infini Ventures. My passion is e-commerce and retail, especially retail tech, the picks and shovels of what makes retail and e-commerce move forward. So look forward to our interesting conversation today.

[00:03:42] Ricardo Belmar: All right, thanks. Darius, and we have another guest speaker today, Mohamed 

[00:03:45] Mohammed Amer: thank you very much, Ricardo. Mohamed Amer in Southern California Ventura area. And I've been in retail, retail technology for the past about two decades similar to you. And most of that time in the large enterprise space with with SAP. 

[00:04:02] Ricardo Belmar: Great. Thank you. Jeff. 

[00:04:03] Jeff Roster: Jeff Roster, former retail sector analyst for Gartner and IHL.

[00:04:07] Now a cohost on This Week In Innovation and serving on several advisory boards in retail. 

[00:04:12] Ricardo Belmar: Right. Thanks Jeff. Shish. 

[00:04:14] Shish Shridhar: Good afternoon. Shish. I've been in retail for about 20 years working with retailers specifically around AI, IOT analytics. I'm currently the retail lead for Microsoft for Startups and I'm building out a portfolio of innovative, disruptive startups.

[00:04:30] Thank you. 

[00:04:30] Ricardo Belmar: Thanks, Shish. And Brandon. 

[00:04:31] Brandon Rael: Well, everyone happy Friday. Brendan Rael, I'm up in the the Tristate New York area been in and around the retail consumer industry, my whole career, then made the shift over to the digital transformation work on the strategy side to help enable and empower retailers and consumer companies to accelerate growth and pivot to the new digital world we live in today.

[00:04:48] Ricardo Belmar: All right. Great. Thanks Brandon. So what do we mean when we say social commerce? When you hear those words start thinking immediately about all of the big social media platforms, places like Facebook, Instagram, TikTok, Pinterest, even Twitter is now getting into the idea of social commerce. You're probably familiar with Facebook shops and Instagram as those have launched over recent years. And we also hear more about social commerce because of activities coming out of China.

[00:05:15] And as it moves into Western countries, we hear about live streaming and other specialized platforms that maybe focus around particular retail segments, like apparel and all of these things play together to enable an ability to have commerce, just like you want on your e-commerce site, but natively within some kind of social networking platform.

[00:05:34] So I wanted to share some stats just to put some of this into context, and then maybe we can go around and see what to everyone's reactions are to that. A number of these stats come from eMarketer. So for example, china's estimated social commerce sales are gonna be somewhere on the order of 315 billion, and social commerce will represent about 13% of all e-commerce sales in China. If we look at what's been happening in the us, e-marketer had an interesting forecast that this year we should see social commerce sales rise up to about 36 billion dollars, which is an increase of about 35% and will represent about 4.3% of all retail e-commerce sales.

[00:06:10] let go around the stage here and just get everyone's reaction. Darius, wanna start with you. What, what do you think about those stats? 

[00:06:15] Darius Vasefi: So I think definitely the difference between China and the us, I is something that I've also heard.

[00:06:21] Now one thing that I don't know as much about the details of what e-marketer means by social commerce is I guess one, one question that I would just like put out there, but I think if we make an assumption that they are talking about transactions made on some form of social media channel and then the definition of what do they think, what these social media channels is?

[00:06:46] Another thing we can probably talk about later, but I think the numbers sound good. And actually, I mean, the us definitely makes sense. 4.3%. The sounds about right, because it's just getting started here. 

[00:06:59] Ricardo Belmar: And my understanding reading through the e-marketer report, they are considering these to be any transactions originating from social media platforms, which they view right now the leaders in that being Facebook, Instagram but also up and coming from Pinterest, Twitter and Snapchat. 

[00:07:13] Jeff Roster: What do we do with live streaming though? Is that, I mean, I know that is social commerce, but that really isn't the social platform. It's a digital media platform, but 

[00:07:21] Ricardo Belmar: yeah, I view live streaming, like you said, Jeff, as a hundred percent part of social commerce. Now some of that live streaming might originate from those social platforms that I could do a live stream through Instagram or Facebook.

[00:07:33] Social Commerce or Social Network?

[00:07:33] Ricardo Belmar: But also there are lots of options that have nothing to do with those networks that are native platforms that retailers can use for live streaming. I'm not clear myself how e-marketer is tracking those. But I thought, it was interesting to take a look at these stats and for us to consider do we think that's is that a reasonable number?

[00:07:48] Do we think that it might grow faster than that? Do we think that's too aggressive? And you're right. It does depend on what we're including in that count.

[00:07:55] Darius Vasefi: Yeah. The term social and the fact that it only has to take place on a social network is probably incomplete. And even looking towards 20, 25. 

[00:08:05] Shish Shridhar: I tend to agree with that. go on 

[00:08:08] Darius Vasefi: so yeah, that, that's basically what I wanted to throw in there is that if, that's the only channels that we're looking at for the definition of social commerce, I think it's not enough and it's gonna change and we'll probably come back and revisit it.

[00:08:22] Brandon Rael: I, yeah. And Darius, and Shish, I completely agree. I think the culture and where China and, most of the Asian countries are with, with WeChat is everything is integrated with the one major platform, all social, all commerce, all interactions, all financial and transactions take place in one app centralized and seamless and real time and, and accelerated lightening speed.

[00:08:42] Whereas we're just, we're finally embracing that paradigm shift and, you know, seeing the emergence of Instagram shop now capabilities and Facebook and TikTok shop now capabilities and live streaming. And it's starting to gain momentum, but China certainly has such a far advantage way ahead of the rest of the world, including the us.

[00:08:57] Shish Shridhar: I tend to agree that, you know, the the social network platforms, the social media platforms is one aspect of it. But really the social aspect of shopping and all of the capabilities and technologies available today that enable social within, within shopping, I think is another element. And what I mean by that is one of the very early startups that I worked with, this was a few years ago. They built a platform where when you're researching a product in a store and you look at product feedback, you're not sure whether the feedback is, is fraud or not. 

[00:09:31] Rather you want to have feedback from your network. What does your network think about it? What do your friends think about it? And what they really built was this QR codes where when you scan it, it will filter out your network and their opinion about a product. And that was a social element to it as well.

[00:09:50] Where there was that social trust element that was brought in that enabled you to make decisions on what product is good. And look at a trusted network to tell you this is good, or it's not, and, and give you some feedback. And that was the, the early one I saw a few years ago. And also a few years ago when smart mirrors were popular there were startups that were building network interfaces into the smart mirrors. So when you're trying out outfits virtually you could pretty much ping your network for opinions on it and, and ratings and rankings. And there was that social element to the shopping which was, which was sort of a physical and digital combination. The other thing that I also worked with this was a startup called spot.

[00:10:37] They were looking at shopable media. So really looking at. You know, influencers and, and Instagram Pinterest feeds, and then using vision AI to detect products within either images of video. And when you're, when you're watching the video or looking at these streams from your network, you could actually find products and shop the products directly from the media.

[00:11:03] So that is, again, something that's prevalent. And that is again, a capability that the social networks are adopting, but it doesn't have to be social networks. It could be on any media. And of course, the other element that I see as well as the, the chat bots chat bots are increasingly becoming a way in which, and as they're getting better, it is becoming a way in which shoppers can interface with a chat bot and find what they want, get recommendations and interact and engage through a chat Bott as well.

[00:11:33] And I think all of these capabilities are not necessarily connected with a social media network, but do have a social aspect to it. And I kind of believe the same with live streaming as well. 

[00:11:46] Jeff Roster: Yeah. So really interesting shish, do you see then chat bots in that social commerce component.

[00:11:52] And then what about call centers? 

[00:11:53] Shish Shridhar: Well, so call centers one of the developments that we've been seeing is that combination of chat bot and human elements in call centers. But at the same time, there is a chat bot that is listening and transcribing looking for questions, looking for the intent of the questions from customers, finding recommendations and providing it to the human who's at the call center to be able to provide recommendations and things like that.

[00:12:21] So that's, again, one element that is seeing for call centers. 

[00:12:25] Mohammed Amer: So Ricardo, I kind of take a, a different avenue or out of when we're talking about social commerce, at least the way the numbers have been set up and looking at statistics. I believe also the, these are really social platforms, the way that we know most of us know social platforms, the Instagrams, the Facebooks and, and so.

[00:12:47] And Twitter trying to get into that with their new shopping module. And, that's the same number that e-marketer was talking about that 36 billion this year with, which had surged 39% during the, the lockdown. So clearly they're looking at where people are spending their time.

[00:13:07] And they're combining where you're spending your time, where you're getting, where you're comfortable and trust the platform. When we're online, there's kind of a risk element. When we're making a purchase, you're wondering, are you really getting what you want or not, but when you back that up by a platform or a social platform that you already trust, you've been using it, you're familiar with it.

[00:13:30] It has a reputation then all of a sudden it takes some of that risk away. And it allows you to go on the early steps of you know, the metaverse where now you're, you're doing things that you would do in the real world, but now you're doing it in the, in a social platform. And shopping is a social activity.

[00:13:49] It's as well as a functional thing that we all need to do. 

[00:13:53] Ricardo Belmar: I agree with you on that. What is social commerce trying to mimic for us? And in some ways I look at it as it's trying to take what was a, a straight e-commerce experience, which I think I would describe as somewhat a detached shopping experience because shopping is a social activity and it normally involves some human interaction, at least in the way that we're all used to.

[00:14:14] Although you could make an argument about different age demographics and how they view what a social human shopping experience may be. But I see social commerce as trying to in effect, bridge a gap between taking what would've otherwise been e-commerce and making it a more as the words implies social, but therefore more, more human interaction in commerce.

[00:14:32] So doing things like what we we've mentioned making media shoppable. There's some startups doing some dedicated I'll call them social networks. But I think maybe they're a little bit different. Me spoke is one that, that I see often where it's designed to allow you to shop any of the things you see in images or videos posted in the app.

[00:14:51] And they actually link back to brands. So they have a connection that goes to a brand to help you shop directly from them. Because you see that item on someone you say, I want this and that's how you would be able to, to shop for it. So another way of looking at it, which I think is also interesting is that this is another mechanism to search for items. So if we think about search, and I think we've all heard stats anywhere from, you know, 65, 70, 80% of product searches people just naturally go to Amazon to search before they even go to Google in the search. But if you think about how often do you search for products on social media?

[00:15:23] And I've seen some surveys that actually show that us as much as 70% of consumers will say they search for products. They wanna buy on Instagram and Facebook which tells me that that's almost as much as people use Amazon as their go to for product search. So if you're starting your search on social where do you go from there?

[00:15:40] Do, do you want to, as a consumer immediately be able to buy when you find it there? Or do you wanna click through to an eCommerce site and have a more traditional, transactional interaction at that? What I think is interesting is these same surveys. It'll tell you, 70% of consumers start their search for products on Instagram or Facebook, and the same surveys ask, well, would you buy directly a product from within a platform like Facebook, Instagram, or Twitter, Pinterest, and so forth.

[00:16:06] And the numbers drop. Then you see numbers like 30% say that of people will actively buy. But if you break it into demographics, then you say, well, what about millennials? Millennials will say more than 50% of them are willing to buy that way.

[00:16:17] So I'll ask everyone what your impression of that is. 

[00:16:19] Defining social commerce vs e-commerce

[00:16:19] Darius Vasefi: Okay. Sorry. Here, here's a question from what you actually mentioned, if I go to a website and I purchase an item based from a video that's on the website even if I can click on it and it can actually drill down, for example, a wardrobe in two different parts of it.

[00:16:37] Are we considering that a social commerce? 

[00:16:41] Jeff Roster: I would not. I would say that's part of the website. That's that's classic to me as a classic 

[00:16:46] e-commerce 

[00:16:47] Ricardo Belmar: if it takes you to the website first. Yeah. From 

[00:16:49] Darius Vasefi: just because it's a video, just because it's a clickable video on a website. 

[00:16:54] Jeff Roster: Oh, wait a minute. What, whose website?

[00:16:56] Yeah. What kind? 

[00:16:57] Darius Vasefi: That person's website. That brand's own web 

[00:17:00] web website.

[00:17:00] Jeff Roster: That's e-commerce 

[00:17:01] Ricardo Belmar: yeah. I, I would, I agree. 

[00:17:02] Jeff Roster: It's their website's e-commerce 

[00:17:04] Darius Vasefi: okay. 

[00:17:04] Ricardo Belmar: Yeah. I, I think in this case, if you saw that video on Instagram and while you were watching it on Instagram, you click and buy it without having to click through to the brand's e-commerce site, then I'd consider that transaction as social commerce.

[00:17:15] Jeff Roster: Exactly. I agree. 

[00:17:17] Darius Vasefi: Okay, but, so, so again, we're talking a little bit more definitions here. If you, if you see something on Instagram and it takes you to that brand's website and they make a purchase off Instagram, that's you don't, that's not considered social commerce.

[00:17:35] Ricardo Belmar: If you have to click through to the brands e-commerce site, their, their existing e-commerce site, I, I would consider that a standard e-commerce.

[00:17:42] That was just a click through the social post, 

[00:17:45] Darius Vasefi: even though it was 

[00:17:45] okay. 

[00:17:46] So it's a transaction since seems like it's the where the transaction actually happens is how we're 

[00:17:53] Jeff Roster: it's location. It's located on the eCommerce 

[00:17:55] website. Then it's eCommerce. If it's off the eCommerce website, then it's social. I would say even even the same video, I would think.

[00:18:03] Ricardo Belmar: Yeah, I think in, in one instance, we're talking about a referral process, right? Where my click through from say a Facebook post referred me to the brand's website and that's where I completed the transaction. So in that scenario, I call that an e-commerce transaction, not a social, but if I was in a Facebook shop and I never have to leave that Facebook interface to complete the transaction that I would consider as social commerce 

[00:18:26] Jeff Roster: a hundred percent.

[00:18:28] Ricardo Belmar: I'll give you some other interesting stats since we're on this point, and I'm glad you brought this up, Darius. If you think about a way to measure how valuable could this be? Right. How much could it grow ? There's one argument to be made that I'm, I'm reducing some friction in the process

[00:18:40] if I can just complete that transaction natively in the social platform, I don't have to click through to an e-commerce site. I don't have to do any of the things I do on a normal e-commerce site to put payment information in or any of those things. So in a way, I've reduced the friction in completing that purchase.

[00:18:54] I did find the following numbers kind of interesting. So if you were to track now this would be based on referrals, click throughs through social. So from Facebook or Twitter clicking through and if you were to measure what's the average transaction value of transactions came through those clickthroughs for the different social platforms. I think it's interesting to see which ones generate more valuable transactions. So I'll give you a few examples. From Facebook customers referred through Facebook, see an average order of $55. If you go to Twitter, the average value is $46 29 cents.

[00:19:26] And it's worth noting that that Twitter click through rate for this type of commerce is about somewhere between one and 3%. If you are on Instagram and, and wanna know what's the, what's the average value of click through from Instagram, it's $65. So it's even higher than Facebook. And if you see a click through from a YouTube video, that's only about $37.

[00:19:43] So there are differences today in the types of things people will click through within these different platforms.

[00:19:47] Darius Vasefi: Yeah. That's a very interesting dis this, I guess differentiation. Definitely the product category and the pricing makes a difference. Especially like what I've seen personally on a lot of what is being sold in China. And on a lot of social live streaming, I guess I'm talking more about live streaming.

[00:20:06] It's a lot of lower priced items. I have not seen any high priced considered purchases being sold yet on that, especially like the, the one too many, the public type of live streaming. And I don't know if that translates across all social or not 

[00:20:24] Jeff Roster: Darius in China, you're talking about or in here in the us, 

[00:20:27] Darius Vasefi: both, both.

[00:20:29] I mean, if you, if you go to Amazon live right now, you go to Facebook, live shop, you'll see the kind of products that are being sold over there. 

[00:20:36] Jeff Roster: Now, I don't know enough about the China market to comment on that, that bit of nuance, but here in the us, I think we're still so, so early in this whole evolution of social commerce that I would expect the items that are really gonna push on social are gonna be fairly low priced, immediate kind of purchase engagements.

[00:20:52] I think that we, as we evolve in that, I think that's gonna change pretty dramatically, but I just can't imagine a complex purchase being done through social. It can start the process and then lead to the website where there's more engagement 

[00:21:05] yet to be determined though.

[00:21:06] What are consumers buying via social commerce?

[00:21:06] Ricardo Belmar: Yeah. I think there is something to the category. I'll give you another a data point there. And I think this is us in 2020 apparel made up just under 22% of the total social commerce revenue. So a little over a fifth. Just thinking in terms of what items are people more inclined to buy in social commerce?

[00:21:22] I view it as it needs to be more of an impulse buy? Something has to entice me either in the visual that I'm seeing, whether it's a photo or a video clip, or if it's a live stream, something about the way that product is shown or described has to make me wanna buy it right now in a slightly more enticing way than just looking at a product page on eCommerce and without having a desire to go physically see it and touch it in a store.

[00:21:45] So I, I think it's an interesting thing to consider luxury items. How would luxury items do in this scenario? Do we think that there's a future for true luxury apparel, for example, or some of the more aspirational luxury brands selling significant numbers this way, or is it more, you know, maybe Darius to your point of what you see in China that it's more lower cost items?

[00:22:07] Shish Shridhar: I would imagine that's, lower cost and also the target demographic I think is primarily gen Z. And from that perspective my opinion is lower cost and apparel seems like the most likely I see a point about, there's certain things you wanna try out and not necessarily the kind of thing you wanna buy on a social platform without touching it, seeing it, trying it out.

[00:22:31] But I believe for low cost, fast fashion, that's probably a good fit. 

[00:22:37] Jeff Roster: But if you add in live streaming I think that changes, cuz I dang near bought a thousand dollars lens from BNH photo a hundred percent because of live streaming. Now I would've, you know, I have bought $2,000 lenses through chat and just the website because without trying 'em out.

[00:22:52] But that live streaming is so sticky in that kind of a, that kind of an app. So you're basically just talking about a, digital sales engagement and that I absolutely can see becoming very high end.

[00:23:03] Darius Vasefi: So from my, from my point of view that it depends on the format. There is two key formats for live streaming. One is the one to many, like which is the QVC style. You have one person setting up this show, highly curated and many people watching. Then there is the private live streaming, and I think that they're completely different and they're also different in the product category.

[00:23:28] So that's what we do at visional is private live streaming. And we only focus on the top end or the considered purchases, things that are not just impulse purchases and were the advice of somebody, a human being on the other side makes the shopper not only buy something better, actually buy more buy a whole wardrobe instead of just buying a shirt when they thought they just wanted a shirt.

[00:23:54] So I think it depends on, on the format, but there is definite potential for everything. 

[00:24:00] Ricardo Belmar: Yeah, that's a good point. I think I just saw a, a retail dive article that stitch fix is planning to beef up their one to one. Live video sessions as a way of increasing their sales. 

[00:24:09] Darius Vasefi: Yeah. But they're still working on.

[00:24:11] So the, the challenge with stitch fix is that it's still an eCommerce company, so they are, I don't know how they're gonna handle, and I've, I've tried this actually with lulule lemon, which is another 4runner in trying live to bring live into the commerce. And basically what you're connecting with is somebody in their home, again, running through a catalog with you, they don't have products to show you.

[00:24:34] Now, maybe stitch fix is gonna improve on that and actually have some products that people can look at. But if they're doing it from their home, there is no way they can have access to the inventory and the experience of the store. So that's something that I'm interested to learn how they do it.

[00:24:52] Brandon Rael: I think there's a certain delicate balance between the highly pro high production value live streaming, but also remaining authentic with the micro influencer, real, real, real shoppers. So how do you balance those two together so that it's more authentic and it's really lifestyle driven approach versus, and has some level of production value?

[00:25:10] I mean, TikTok it's is a fascinating platform, not so necessarily for live streaming, but just the amount of creativity and innovation that's coming out of there. The videos and just resonate the current generation of shoppers it's emerging. So yeah, I, I agree with Darius. I mean, the ones I've done at your home access to the physical store or least merging those two experiences together, it's a, it it's a delicate balance.

[00:25:34] Mohammed Amer: And like in the example, I'm sorry, Darius. So just in example, that Jeff was mentioning the $1,000 lens from BNH you start out with, there is a, a comfort level of trust factor that he has with that company must have made some purchases before or their reputation or online reviews.

[00:25:53] And you're more comfortable about making that high ticket purchase item, given that you can see the details about the product. You can ask questions performance, specs feedback and, and that's something, again that can be, can come to life very well in a video commerce setting 

[00:26:15] Jeff Roster: and Mohammed you're a hundred percent right

[00:26:16] the best camera shop in America, in my opinion Excellent return policy, beautiful website super knowledgeable people, a hundred percent. You're a hundred percent, right. That's why that, that video streaming is so, so such a slam dunk for that organization. And by the way, the actual live streaming was, was pretty poor quality.

[00:26:34] I, I think they literally probably just set it, set up a camera and out they were going nothing like what Darius is working with and, and developing, but just the concept alone was enough for me to say, wow, 

[00:26:45] Ricardo Belmar: I can really see how this is gonna work well. And a related point to that, that's making me think about Jeff, so this was already a trusted retail brand for you.

[00:26:54] If I separate the live streaming from this, but if I just thinking of social commerce and its ability to add more merchants to it, right. What, what do we think is happening as far as returns, for example we, we know, you know, e-commerce has an issue with return rates and various product categories.

[00:27:10] Don't you think that in social commerce, this could actually get worse in terms of how you're gonna handle returns?

[00:27:15] Jeff Roster: I would think it might be maybe a little bit better other than other than apparel I, I just, I think the more, the more knowledge you get about a part or a lens or, or anything along those lines, hopefully the less returns you're gonna have other again than apparel, where it's about size and fit and look and all that sort of stuff.

[00:27:32] I don't think it's a driver though. Ricardo. Yeah. I don't think, I don't think social commerce is a driver. 

[00:27:36] Ricardo Belmar: that's probably true. I guess what I'm thinking of is if you're searching for products in social commerce, well, I'll put it this way. It's not all that different from a problem you might have with Amazon marketplace sellers, where you do a search and you get a hundred different results.

[00:27:50] Right. And they're from 99 different sellers you've never heard of, but how do you choose? Which one do you want? Same thing on, on any social commerce platform. If I'm searching by product and I see a big number of merchants come back. I don't know who any of them are. How am I gonna choose? And am I taking my chances when I pick one, if I say, decide to pick it on price, just like I would with a marketplace.

[00:28:11] Am I gonna have an issue? If I have a problem with later, do I know that it's an authentic product? Am I gonna have an issue with, fake products in this space. Where is the quality control there? I'm curious what everybody thinks about these issues. 

[00:28:22] Darius Vasefi: So if we are talking specifically about returns I think definitely the more snap judgment is involved in the making of transaction the more the returns are gonna be probably. So if you are Again, I don't have exact data from any, places, but what I do know is that like, for us, when we've done sales, when you build a relationship with a person on the other end, actually the number of returns actually become less than really like the 50% that you're seeing in apparel on eCommerce.

[00:28:53] So I dunno if that answers your question, Ricardo, or did I miss a part of it? 

[00:28:57] Live streaming makes it more social

[00:28:57] Ricardo Belmar: No, I think you're. Getting it exactly at it. So for example, if I bring the live streaming component back into this, that having the ability to build the relationship first, which is how I'm viewing the live streaming component to this, that's gonna help, I believe in, in building that trust factor, building some, authenticity with the customer versus just scrolling through a series of product posts on a social platform, which is in, in some ways, almost the same thing that you'd be doing on just a standard e-commerce marketplace. You're just scrolling through a lot of products in a social platform. So there isn't anything additive. I would argue there that helps enhance trust or authenticity.

[00:29:33] I'll throw another variable into this that we haven't talked about yet, because I think another thing that we see come up quite often in any discussion on social commerce is influencers, especially around live streaming. I'm sure everybody's seen that the crazy photos from China, where there are influencers standing in front of 500 different phones and ring lights of all these influencer videos being done to promote different products. So influencers have a role to play, I think, in this social commerce space where do you see that? You know, is this, I'll ask this, the question here. Is it more less, does it affect how retailers and brands should be viewing social commerce?

[00:30:08] Mohammed Amer: So I I'm gonna bring in China in the, to address that question you know, in China's a outfit called little red book, how appropriate, huh. And they are doing a lot of you know, facilitating social commerce. And they're basically aimed at gen Z and millennials and they, they have even been able to live stream with Louiston.

[00:30:32] So even, a luxury retailer is getting on board in that. And where I was getting to is their influencers are called key opinion leaders, KOLs, and they pair that with blog posts. So they, they, bring the personality, the influencer, the expertise, the live streaming, the product, and they they're creating an experience around, around all that in a social commerce factor.

[00:31:00] Brandon Rael: Yeah, I think we are, again the, the outstanding point, there are light years ahead of the of the west, especially our country. We, we are just scratching the surface of social commerce and live streaming. This has been part of their culture and their, and their commerce operating models for, for almost a decade now.

[00:31:16] And they had the technology, the infrastructure, the. I think the centralization of, of commerce via Wechat and, and Tencent and Alibaba really enables that to be possible. And there is really no disparate apps you need to go to, or different retail that, you know, go across. And that influencer model, it works so, so effectively in, in their culture.

[00:31:36] And I think we'll, we'll get there eventually, but again, there's some, there's some regulatory factors to consider it as well. If you have a monopoly such as WeChat controlling everything.

[00:31:44] The TikTok Effect

[00:31:44] Ricardo Belmar: So what about platforms like TikTok, which I know Brandon, this is always a, a hot topic for you, what influence is TikTok having on this whole social commerce space? 

[00:31:53] Brandon Rael: Oh, you called me out. I see am I 

[00:31:55] Ricardo Belmar: know this is one of your favorites. Yeah. One of your favorite topics. 

[00:31:57] Brandon Rael: It is. I, I think there's just a fatigue overall with Facebook for many reasons and a fatigue almost with Instagram, cuz the lack of storytelling, everyone's showing the perfect state of the world and Instagram and I think TikTok is the algorithms built to, to match the trends and the, the news and and all the creator, the creators that come outta that, the innovations come outta that the retailers and brands have started to pay close attention to this and find ways to monetize and commercialize off of just the, the rapid expansion of TikTok as, as a presence in our culture. And it's not just gen Z and the millennials it's ing all the generations. And there has to be a way for retailers like Louiston and others to capitalize and jump on the bandwagon because it's here, it's here and it's serious day.

[00:32:38] And I think we'll have a lot more momentum on, on side versus Facebook shopping or Instagram shop now capabilities. I think that those days are numbered. It's just the, the live streaming slash TikTok creative engines are, are often running. So I think they'll have, it'll have a significant presence and a significant factor and customers decision making, whether it's on the app or outside the app, or it's gonna be part of that customer journey for sure.

[00:33:02] I think go across platforms. 

[00:33:03] Ricardo Belmar: Yeah. And we've seen Walmart do, was it two events now that they've done on TikTok? 

[00:33:07] Brandon Rael: Exactly. And they were probably the last retailer I thought would be on there, but we see we've underestimated Walmart for a decade now, but they like jet.com and the revenue Ascension eCommerce and their BOPIS and their digital first acceleration they could do.

[00:33:21] And they have the power and they, and their capital do anything. And they proved it. 

[00:33:24] Shish Shridhar: Well, there was a attempt by Walmart and Microsoft to acquire TikTok. And I think there's a huge, influence there. I mean, the whole thing about short form video, I think that is driving a lot of engagement and it is becoming a big content platform, even though today I think it's still Instagram and Facebook, that's driving most of the sales but TikTok is from what I can tell is growing very fast. 

[00:33:50] Brandon Rael: Very true. 

[00:33:51] Ricardo Belmar: Yeah, I agree. And if you think of influencers on the platform and tie that back into the use of influencers for live streaming in this, in support of social commerce, I think that a TikTok of any of the platforms probably has the, the greatest growth potential.

[00:34:05] Brandon Rael: Brands and retailers have to go where the, where the consumers are and where the consumer behaviors are. And the consumer, the consumers are engaging with content on TikTok or Instagram. That's where you need to be. And then you're, you know, obviously I think we haven't done our due diligence, so it has been studies on what the revenue potential is or opportunities are for the retailers.

[00:34:22] But there is certainly a lot you can learn from this model and how you can leverage TikTok's growth and, just acceleration to grow your own revenues accelerations as well is go where go where the customers are. And they're not necessarily in a physical store or not necessarily in the mall any more they're engaging content on tikTok and Instagram.

[00:34:38] Ricardo Belmar: Well, and, and to that point, if the retailer or a brand is gonna treat social commerce as if it were another channel, and I know there's probably a lot of people shaking their head and down the audience saying, oh, no, we're gonna talk about channels again. But at the end of the day even though consumers don't, think about channels.

[00:34:52] I think it it's just a fact that retailers, brands, they, think in terms of channels because they have to know where to put their advertising money and where to put their marketing money, how they're gonna generate a campaign to target customers. And they need some kind of a framework to be able to, to characterize this.

[00:35:07] Measuring success with social commerce

[00:35:07] Ricardo Belmar: So I'm just gonna go with that for the moment and let's treat social commerce as a channel. And the reason I say that is, every brand and retailer wants to measure their activities in that channel. So if I look at social commerce and live streaming, other of course, than, understanding, what are the different analytics I'm looking for to help me understand whether I'm successful or not in social commerce and more importantly, whether my customers are there.

[00:35:28] Darius Vasefi: So, I mean, as far as like live streaming for us, what we are looking at in, in our format is the number of appointments. What appointment actually translates into a purchase, the amount of the purchase, the repeat visit from that same customer, even to the same agent to the same store and the conversion the order, average order value.

[00:35:50] And, you know, maybe the the maximum order value is really interesting. Also the type of products. So, I mean, all of these metrics are things that we have to be, measuring and monitoring. And then, of course customer acquisition costs is, when it gets to the marketing and what channels we go to .

[00:36:06] Brandon Rael: I think that's the scalability is the factor here. I think the cost of acquiring new customers is significant Darius, but can that be mitigated somewhat with the the expansion and the growth of a TikTok or Instagram, where there is lower carrying costs of acquiring new customers, , the challenge is, how would you make the content authentic and, and satisfying enough to drive that conversion, to drive that engagement, to lead it into the actual, the shopping journey?

[00:36:29] I think that traditional customer journey has been, was so fragmenting. And then now it's, now it's originally social commerce across many different paths and it's not too linear anymore. It may start in social commerce may end up in the store. It may start in the store and they can actually be engaging on the app or TikTok within the store itself.

[00:36:44] And then they can final a decision. So all those customer journey touchpoint across, across the channels, digital and physical matter, like you said, it's about the editorial value. The conversion rates, the turns, everything we, everything you would consider from a eCommerce perspective, that would really change what we used to talk about from a retail perspective, inventory terms, gross margin percentage EBIDA, which all are very relevant by that customer journey.

[00:37:08] It it's so, so significant different than it used to be. 

[00:37:11] Mohammed Amer: Yeah, it's a fractured buying journey and the attribution problem continues with now the multiple paths that are available and they can start anywhere. They can end anywhere, but social commerce, the way we defined it is it ends for sure within, that social platform. I think going where your targeted customer base that you're going after for that specific product where they spend their time, that's the biggest nut that you need to, to crack. And whether that ends up being TikTok, Instagram, Facebook, something else. And then, then you get to the content, creating the kind of content that, that attracts them that gives them the right information they need. And how do you convert that into an actual transaction and then the follow on after the sale to ensure that they're happy and talk well about it, .

[00:38:03] Shish Shridhar: So one of the areas that I'm seeing a lot of spike in, in the startup world is the emergence of social commerce platforms. These have plugins to all the popular social media networks, so TikTok and Instagram and Facebook all of these, and as ones emerge, they will have connectors to it.

[00:38:24] What really enables the brands to do is. Hook in their inventories and their product catalogs to it and enable creating embedable links to, to social media. So if I'm an influencer on Instagram or TikTok, I can, I can, I can embed products through the social commerce platform. It is akin to the Amazon associate tags where the attribution goes to the Amazon associate and they're paid a percentage.

[00:38:56] So that same model has been applied to, to social commerce as well. And being able to find and engage with influencers through that social commerce platform. And, and that's something I'm seeing and emergence, and also the, the, not necessarily reliance on a single network, but really looking at whatever network that the influencer is on the brand is able to create that connector.

[00:39:20] Alternate models

[00:39:20] Ricardo Belmar: Yeah, that's, that's an interesting point there Shish. So we've been talking about, I would say a pretty foundational aspect around social commerce and where it's headed from brands and retailers perspective. I'm curious what everyone thinks is gonna happen in the startup community, or I think everybody up here on stage has some experience in some form or another talking to different retail tech startups.

[00:39:40] Is social commerce and, and you just mentioned a number of examples, Shish, are there other areas besides those who think that social commerce is gonna see a lot of investment in, in retail tech? We we've had this conversation before about oftentimes seeing a lack of investment in retail tech, but is social commerce. One of those areas that may see a bigger share of that investment.

[00:39:58] Jeff Roster: Well, bigger shares. It's a loaded, a loaded word. 

[00:40:00] That's I mean, it depends you can't the nanosecond, you start talking about artificial intelligence. You can't talk about bigger share, but that's because that share is so gigantic, is it right , for significant growths, Shish is gonna love to hear this, absolutely 100% and there's, there's very solid evidence then in, in the investment community.

[00:40:18] But it's, it's gonna be nowhere near artificial intelligence. 

[00:40:22] Darius Vasefi: So on the startup side Ricardo, I, personally think that we're gonna see a major investment shift into the companies that enable the next I guess, generation of what we call or what we don't wanna call omnichannel retailing is where the direct and deep integration within the social channels and the brand's own experiences are gonna enable.

[00:40:47] I think about as like the picks and shovels of making social commerce work and in, in general retail work, I mean, if you look, let's say at 20, 25, right, we're looking at 20, 25, do you think that there's gonna be any major retailer in 2025 that doesn't have some form of integration to at least a major social channels directly going into their inventory system.

[00:41:12] And like the tracking and everything analytics,

[00:41:15] Jeff Roster: I would say the answer to that is if, if you're saying, well, the all be the a hundred percent, they will all not be. I can think of TJ max. I doubt that ever happens. Probably two or three others, even in the tier ones, but the majority, as long as you say, the majority, 

[00:41:29] I'll I'll agree with you on that.

[00:41:31] Darius Vasefi: I'll change majority. 

[00:41:32] Ricardo Belmar: If you think, for example, the existing integrations that Shopify has on their platform. To TikTok and other social platforms, you can tie, if you're Shopify merchant, you can tie all your product listings right off the bat in, into TikTok, Facebook, Instagram you know, if Twitter shops takes off, I'm sure they'll add that one later, but so yeah, I would have to say majority.

[00:41:50] Yes, I would. I would agree with that. And actually, Jeff, you brought up like, like a TJ X, TJ max. So obviously those brands like them, they're not fans of e-commerce, but I, I wonder would they have a different mindset around social commerce only because, and I, and I'm thinking particularly of a brand like home goods, because home goods, in addition to living off of the treasure hunts, they already generate significant social traffic from people just posting about their finds and what they found at a given store. So do you think they would view social commerce differently than they view e-commerce? 

[00:42:24] Jeff Roster: No. And because it's the same issue, how do you, how do you have social commerce if you don't have a sustainable or a, a, a long term plan on inventory?

[00:42:34] So posting about your finds. I mean, that's that's history. Hey, I, you know, look at this, look at this piece of data, you know, I found it's not, Hey, you can find, this could be a hundred percent wrong in that, but it's. 

[00:42:45] It's just such a, a far. 

[00:42:47] Ricardo Belmar: Yeah. What if you consider livestreaming ?

[00:42:48] Mohammed Amer: The current 

[00:42:49] model?

[00:42:50] Yeah. The current model that I agree with you, Jeff, the current model that TJM max Ross stores, those, kinds have, does not fit the models that we've been discussing and they don't have the infrastructure nor do they have the, the, the will to, to spend that kind of money and investment, because that will just upset the model that they currently have.

[00:43:10] So I, I just don't think that that will work for them. 

[00:43:13] Brandon Rael: It won't work cuz they're the building, the treasure hunt and opportunistic merchandise and buys it's in the marketplace. They can't necessarily predict what's gonna be available in the next six months or, or anticipate demands on the, on the top trending items on, on, across the social channels. Where it could work is, is complicated to have the agility and flexibility to pivot their designs and, and meet the, the surging consumer demands a lot faster than a necessarily a discount or off price retailer could.

[00:43:39] Maximum stores. 

[00:43:40] Jeff Roster: So I agree. So what would be interesting to see if somebody like a Costco pivots to a social commerce model, even though they are also sort of a treasure hunt, but I mean, I, I can think of about a couple thousand dollars worth of stuff I've bought over the years with no desire. My, my high end blender being, being the number one thing, just walking through, seeing the demonstration, boom, off we go.

[00:44:00] Maybe that's a different type of retail that might really embrace social that you wouldn't necessarily think of. I could, I could, 

[00:44:05] Ricardo Belmar: yeah. You could especially see that in livestream scenario, right? Yeah. And the same way that you exist. Yeah, definitely. I think, I think the way I look at a TJX, you know, so, so they they introduced, I guess, was it right before the pandemic started on Marshall's e-commerce site where they positioned it as it was going to be special merchandise that was still gonna try to promote the flavor of the treasure hunt and that it wasn't gonna be the same thing, always available day in, day out on that site. And it, it speaks to me in terms of what, what if they look at limited drops and turned into events, where again, the live streaming model maybe helps in a one to many scenario there and, and they treat it that way. Which I, I agree, it's not the existing business model, right. It's a little bit of a pivot for them to do that, but still, maybe on brand. And that that's the way I'm thinking about it.

[00:44:48] Darius Vasefi: So I, I think that this is a really interesting conversation, especially when you bring in TJ, max and home goods. We, we personally actually have done some experiments and those models actually work perfectly for what we do because the, the inventory is changing so fast. They can never keep up with it.

[00:45:07] and the treasure hunt can really be enhanced with another human being, like doing it, helping you in the store. So it's a very interesting concept. And same thing applies to like flea markets, resale, used clothing, like stores, which is like really getting big. I think that's a, that's another very interesting side of the market for me, especially because that's like, you know, we could definitely make a difference in that.

[00:45:31] Ricardo Belmar: It's very much like a newer version of a flash sale.

[00:45:34] Mohammed Amer: Yeah. And, and your model Darius with the one on one is ideally suited for that, that type of an environment. It, it works as well in other environments, but where other models would not work, whether TJ Max or Ross Stores yours definitely would because you were bringing their shopper via video to that store to do, to go and do their treasure hunt.

[00:45:58] And and that, that will make it happen. And, you know, you don't versus what we're discussing before about social commerce and the kind of investment and the visibility into inventory and the systems and so on.

[00:46:09] Darius Vasefi: Yeah. I mean, outlets is another interesting concept, probably somewhat to that, or maybe not, but I know like, like Simon is really investing a lot into their outlets and how to bring eCommerce into their outlet malls and it's good to see that. So, and, and it goes to like what Jeff was saying is like that direct integration to the inventory and supply chain is is a lot harder to do when you get into these like highly unique and fast moving inventory type situations, 

[00:46:38] Brandon Rael: so how do you tangibly analyze the impact of this? Because that, that path of purchase is so dynamic right now, and it's so far from what the linear understanding we had of it five years ago, 10 years ago, even last year, it's, it's pivoting so quickly. 

[00:46:53] Ultimately it's about brand engagement and building trust and, and the relationships with, with products and, and also influencers. It may actually lead to a immediate conversion that lead to the customer, going to a store or, or shopping via eCommerce. It may lead to an engagement that leads to buying something months from now because of that, that experience they had via via social commerce and live streaming or TikTok videos.

[00:47:15] Mohammed Amer: And that's why I wanna talk to retailers and they they're talking about, well, you know, e-commerce is giving us this or the website I'm gonna, you, you don't know, you don't really know you want, we need, we have this need to, to be certain about things, to have a number, to have be precise, we'll go 27.7%.

[00:47:33] I mean, it, it's still a guessing game because you don't understand how to really attribute that you, you can get a direction, get an idea, but you, you never really are going to be a hundred percent confident of that, of the numbers that you think you're dealing with regarding the attribution.

[00:47:50] And that exactly Brandon brings it to, you know, every, every moment that you're interacting the brand and the, and the shopper consumer, the potential shopper, it, it has to be done the way that you would like it. But again, it's not a one way communication mechanism anymore. It's interactive. There are influencers or opinion leaders that are now inserted in this and just have to have a, a broad brand message value proposition that you can then operationalize across those different points. 

[00:48:24] Ricardo Belmar: Yeah. I think those are excellent, excellent points. So we've had a really great discussion here on social commerce. We're gonna go ahead and close out the room and I'm gonna thank everybody up here on, on stage today. This has been a really great dive into the nuances of social commerce. We do expect the majority of retailers to be very much involved in some form of social commerce whether it's on one of the big social network platforms or whether it's engaging in live streaming because it's where the customers are. And you have to go where your customers are if you want to grow. 

[00:48:55] So with that again, thanks to all my speakers, thanks to the audience for joining us. 

[00:48:59] Deep Dive with Alicia Esposito

[00:48:59] Ricardo Belmar: Welcome back retail, razor show listeners. We hope you enjoy that great clubhouse discussion on social commerce.

[00:49:10] Casey Golden: Great discussion and incredibly disappointed I missed out on this one

[00:49:14] Ricardo Belmar: Yeah, we definitely missed you on that one, Casey. But fortunately you get to be here for the special discussion with our special guest on this very special topic. That's a lot of specials I worked in there. Isn't it?

[00:49:24] Casey Golden: we noticed, but with the voice made for radio, no one's complaining.

[00:49:27] Ricardo Belmar: Oh, well, thank you. It was really special.

[00:49:29] Casey Golden: voice made for radio, no, one's complaining . And on that note, let's introduce our extra special guest today. We have Alicia Esposito, VP of content at retail touchpoints. She's here with us. Let's talk some shop

[00:49:42] Alicia Esposito: Hello everyone thanks for having me. 

[00:49:44] Ricardo Belmar: So, this is a fun one for us this week and a little bit out of our normal routine. We usually invite someone who was in the clubhouse discussion we just heard to come join us on the show, but this time Alicia, we thought this was a really good time to bring you back to the show. And I say back cuz you were on in our episode last time when we talked about Loyalty in the last clubhouse episode.

[00:50:03] And plus I guess it was what, last month when I was on your show, retail remix, and we talked about social commerce, right. So this kind of feels a little bit like a part two to that discussion.

[00:50:13] Alicia Esposito: exactly. Because there's so much to unpack and like, anytime you get me started on this topic, I can just go on and 

[00:50:18] Ricardo Belmar: Yeah. Yeah. We can go for hours, right?

[00:50:21] Casey Golden: this is why we've never been on a call together.

[00:50:27] Ricardo Belmar: Right. It it'll never 

[00:50:28] Casey Golden: eight 

[00:50:29] Ricardo Belmar: Yeah. We, we would never end. Yeah. Yeah. And, and like we've said before, I think the one comment we never get from listeners in our show is that, you know, if only you could make the episodes longer

[00:50:39] Casey Golden: hours.

[00:50:40] Alicia Esposito: I just need

[00:50:42] Ricardo Belmar: Yeah, more content, more content. So obviously there's a lot to talk about. Cause social commerce is just so big. You know, where, how retailers and brands are gonna invest in it. I think it on, on your show Alicia I think we talked a little bit about live streaming too. Right. And how that relates into, social commerce and that's a worthy investment.

[00:50:59] We see lots of folks making you know, I think we, we didn't quite touch on if there's an angle for retail media in, in social commerce, how do they all intersect? And when we were talking ahead of time, before , we were recording here, you brought up something super interesting, I think and maybe that's where we should start this conversation and that's, what are all the platforms that matter here.

[00:51:18] In the clubhouse session, we talked about, what, I'll call it the big three. It's Facebook, Instagram, and TikTok, but they're not the only platforms. . And Alicia, you, you mentioned at least one that I had honestly kind of almost forgotten about. But, but we shouldn't right.

[00:51:31] Alicia Esposito: Right. Poor Pinterest. Everybody forgets about them. and I think it's largely because there there's, this really close association with things like recipes with even home renovations and home decorating. But there is a really clear opportunity for commerce. I think it's just. They, they haven't, it feels like they haven't really gone all in, but what I find really interesting right now is recently they acquired the yes.

[00:51:58] Which, you know, they're kind of seeing as the vehicle or the driver for. What they want their AI powered, highly curated shopping experience to look like they actually indicated, you know, this is a fashion app fashion platform, but we want to explore what this will look like in other categories. So I thought that was my first little hint of like, oh, they, it seems like they're gonna try and double down on this or, or really in invest in it.

[00:52:26] And we also recently covered that they have a new CEO, which is huge. And as we dug deeper into Bill Ready's credentials, most recently, president of commerce payments and next billion users for Google, like huge

[00:52:41] direct connection right there. Prior to that EVP and COO of PayPal. And also held roles at Braintree and Venmo and what I find interesting there very payment centric.

[00:52:52] And as I think about the challenges around social commerce, I mean, we, we kind of chatted about this a little bit before we started recording, is that payment component, that payment experience is still very much disconnected and flawed. And that, you know, we talk about social commerce being a commerce moment inside of the platform.

[00:53:13] And that's still very much not happening. A lot of it is redirects and clickthroughs, it's still very much not to the level where, people say oh, this is where it needs to be.

[00:53:23] Ricardo Belmar: Yeah, that was one of the things we kept talking about in the clubhouse session too, is it's it's not like a, a thin veiled layer on top of eCommerce. It needs to be it's own commerce platform. So just to click through is not the same.

[00:53:35] Casey Golden: payment makes it commerce.

[00:53:37] Ricardo Belmar: Yeah.

[00:53:38] Alicia Esposito: Right. Exactly. you need to pay, you

[00:53:41] need to be able to pay for 

[00:53:42] Casey Golden: That is the commerce piece. Otherwise is it really commerce?

[00:53:45] Alicia Esposito: Discovery, inspiration. Sure. I mean, Pinterest is great because it is a content driven platform and we're seeing this really powerful. Intersection of content and commerce. The ones that invest in content are creating those moments that people feel inspired to act, but they may be inspired, but if you're not giving them that next

[00:54:05] Ricardo Belmar: Yeah, but without the

[00:54:06] Alicia Esposito: and easily, it's like, all right, well now

[00:54:08] Ricardo Belmar: yeah, you can't convert to a sale. If there's no payment processing,

[00:54:11] Casey Golden: Yeah. I think it's really interesting. Pinterest has always done a really great job of pulling back the right content when you're looking for like Google images. So, by them bringing somebody over with so deep over on the Google side I think it could be completely detrimental to Google shopping

[00:54:29] Ricardo Belmar: yeah.

[00:54:30] Casey Golden: was able to take over Google shopping because Google shopping is not a great discovery or search experience.

[00:54:37] And Pinterest has always been really great at a search experience and discovery. So.

[00:54:41] Ricardo Belmar: Yeah.

[00:54:42] Alicia Esposito: is funny. You say that because I know they've been doing a lot of announcements. They being Google around how they're improving their visual search capabilities and how they're trying to make that more curated. AR and digital Tryon capabilities. So it seems like they're almost working in parallel of each other.

[00:55:00] Right now. I'm trying to kind of find that right. Mix of commerce capabilities for their businesses. So it'll, it'll be interesting to see how it all plays

[00:55:08] Ricardo Belmar: Everybody wants to converge, I think on the right formula and flavor for social commerce. And, you know, it's interesting, you bring, you bring up Google, right. But I think Google has another one of these platforms that are big, but seems to get left out of the social commerce and live streaming conversation.

[00:55:23] And that's YouTube. YouTube is at the end of the day, the king of, of video platforms. But I don't think we usually think of YouTube when we start having live streaming conversations, focused on commerce, because again, and Casey you're gonna say the same thing, it's where's the payments.

[00:55:38] where's the payment part of the commerce equation. . And 

[00:55:40] Casey Golden: Where's inventory. Where's the

[00:55:42] Ricardo Belmar: Yeah. And

[00:55:43] Casey Golden: payment. Like I see a lot of it as ad.

[00:55:45] Ricardo Belmar: yeah. Yeah. It's still designed and originally geared towards driving a click through to complete a transaction on an e-commerce property rather than being the commerce transaction. We throw around terms like shoppable video. And shoppable images, meaning, or by definition, it's not a click through, .

[00:56:03] If I see the item I wanna buy, if I'm clicking it, I expect to be taken to a payment mode and immediately complete a transaction. I always like to look at those and say, well, let's assume that the interface is there for that. And they've integrated the payment processing. What's the rest of the purchase experience look like for the customer. How does the customer know exactly who they're buying it from?

[00:56:22] In that scenario and what's the post purchase experience like? So let's say I, I order it that way. How am I finding out how long it's gonna take to ship to me? And when I do get it, if it's not right, how do I handle a return? Who am I returning it to? How do I connect with that business to, process that return.

[00:56:38] Alicia Esposito: Like, if it happens through Instagram, would it be like an Instagram DM, like, or, or do they create that direct link to the branded e-com site? Which personally I would recommend, because then you're kind of in this little box of Instagram, which we all know how that, that has turned out for some folks in the past.

[00:56:55] It's it requires a lot of orchestration. And I think to your point, Ricardo, around what does that final selection and payment process look like? I mean, I can't tell you how many times I'm still clicking on Instagram ads. I feel like I'm picking on Instagram. I'm sorry. On social 

[00:57:11] Casey Golden: apologize. 

[00:57:14] Alicia Esposito: It's a beautiful item.

[00:57:16] I get, so I'm like, oh, I gotta check this out, click it outta stock, cross the board. It's not even like, oh, it's not my size. It's just completely outta

[00:57:23] Ricardo Belmar: Yeah. Yeah. There's no inventory connect.

[00:57:25] Alicia Esposito: how, how is this still happening? And I know. You have to manage all the content with like the buys. And I know it's complicated, but , how are we expecting these brands to really master that commerce experience?

[00:57:36] If they can't get the core of what makes commerce seamless and good that's not even nailed yet,

[00:57:43] Casey Golden: Instagram doesn't make money off of the conversion. They make money off of the traffic and, and when you don't have accountability for like the actual end result. because they can't control it and they didn't build it. And that's not how they monetize. They're not making a percentage of net sales.

[00:58:01] They're making money off of impressions and clickthroughs whether or not somebody buys it or not. I mean, I see a lot, I feel like the last 10 years, like literally it's a million versions of P.

[00:58:14] Alicia Esposito: Oh, my gosh, you're bringing me back.

[00:58:19] Ricardo Belmar: Wow.

[00:58:19] Alicia Esposito: that one.

[00:58:20] Casey Golden: It's a million versions of and we haven't moved on to the next stage of integration with inventory, universal carts, the commerce piece.

[00:58:30] Ricardo Belmar: Yeah. Yeah. and then just to throw another factor , out there, how about making it more personalized? Shouldn't this somehow facilitate making it a more personalized shopping experience?

[00:58:39] Casey Golden: There's enough data to know the difference between me, Alicia and you. It just doesn't

[00:58:44] Ricardo Belmar: right,

[00:58:47] Casey Golden: seem to get put together in a way that can distinguish one product from the next. One preference from the next, it'll be interesting because the yeses was built for, to focus on building AI for fashion to make it personalized using AI, coming from stitch fix, which boast the best, a fashion AI in the world. So it'll be interesting to.

[00:59:12] Alicia Esposito: I guess my follow up question, there would be like, is this going to be data that these platforms hold onto and kind of keep hostage from bran and retailers? Or is this gonna be something that they open up? Because I know there have been qualms about and issues around the depth of data that these platforms provide and how sometimes that prohibits brands from creating that seamless.

[00:59:36] That we're talking about. I don't know the answer. I'm not as

[00:59:38] like deep dive 

[00:59:39] Ricardo Belmar: it's a who owns the customer in that transaction. Right? Who is it? Are, are you a Instagram? Or Pinterest customer, or are you the retailer's customer at that point? Who, you know, who are you completing the transaction with and to the shopper. Who does it look like you're doing the transaction with, you know, forget who it is on the back end, but what does it look like to that customer who's benefiting, which brand is benefiting from that customer's experience?

[01:00:01] For better or worse, if it goes well, or if it doesn't go well, who's the customer either praising or blaming for how well that transaction goes and who gets control over that. .

[01:00:08] Casey Golden: Blaming is a really good there because a lot of e-commerce stores have close to, 30% returns. So whether or not you're, they're making these social commerce experiences and platforms, their business model, isn't based off of the net result because it's really high return rates

[01:00:28] Ricardo Belmar: Yeah. 

[01:00:29] Casey Golden: and they don't wanna deal with customer service.

[01:00:31] They don't wanna deal with returns. They don't wanna make have to go into their pockets if the customer decided not to keep. I think that there's gonna have to be a, a lot more, the brands are adopting technology at a rate right now that I feel a lot of these social commerce platforms are going to have to step up to provide better integrations and better performance because the brands are getting savvy and they're getting better digital tech stacks.

[01:00:59] And they're starting to have more of that direct to consumer. Experience. I think we have to remember a lot of retail has traditionally been not only physical. It's also been whole 

[01:01:10] Ricardo Belmar: That's true. I'll add another variable to that. So, I mean, all of the things that we're talking about here on, on the challenges side of the equation, part of me says, if you are a really large retailer, where, where normally we would say, oh, that gives them an advantage because they've got more resources to throw at it to solve this, this problem.

[01:01:28] Maybe that's not the case in this, maybe because of these challenges and because of all the, the size of these social platforms and the amount of data and, and the intricacies, like the returns piece of it, maybe if you're a smaller or midsize retailer, it might actually be easier for you to get in the middle of this social commerce and take advantage of it to gain customer mind share, 

[01:01:47] And to build on that customer relationship in a way that's, you can do faster and, and easier than some of the big guys. I often feel the same way with live streaming that in some ways it's easier for the smaller brands to take advantage of live streaming than it is for the larger ones.

[01:02:01] And maybe that helps them build on, you know, whether they're building on momentum of a, of a shop local move Or they're just building local community, cuz they're a small store. But they have interesting curated products. It might actually be easier. I don't know. What do you think?

[01:02:14] Casey Golden: I think that I'm gonna add onto that. So I can, we can go back to Alicia here for this because Pinterest has the SMB.

[01:02:20] They have the Etsy creators bus, the small to medium size businesses. Their CPM is not atrocious. I don't know anyone that will even work on a brand, a fashion brand's media spend. They're not spending at least $60,000 a month.

[01:02:40] I don't know anybody that will even work on the account. And that's like a bare minimum. These SMBs can't afford that, but Pinterest already has that customer base and they could really edge out an area for SMBs to actually be able to compete and ha and. because you can't really play on Instagram ads with, you know, a 10 to $20,000 budget.

[01:03:05] Like it's not moving your needle.

[01:03:06] Alicia Esposito: Right. Well, and I've also seen a lot of a lot of negative reactions to Instagram, really trying to be a video first platform now, like they are FA go figure go figure. They're like, but you're a photo platform and like their, their whole business, their bread and butter is creating content, right?

[01:03:28] Like I'm talking smaller brands or even influencers and content creators. So they're kind of throwing, throwing the whole toolkit that, these, these entities individuals or brands have spent years trying to build out and perfect. And they're basically like, all right, well just video now. Some people hate video.

[01:03:49] Sometimes I don't wanna, I don't wanna look at video. I think sometimes the best Instagram content is a very nicely curated photo opportunities. So I think that that point you made around Pinterest being able to own. that sweet spot own the SMB own. The, the scaling brands I think is a really interesting one.

[01:04:11] I'm curious if they're gonna lean into that or not.

[01:04:13] Casey Golden: I feel that there's a, a really good alignment between Pinterest and Etsy.

[01:04:17] Alicia Esposito: Mm-hmm

[01:04:18] Ricardo Belmar: that's a good point.

[01:04:19] Casey Golden: Still a little bit shocked on like why they're not the same company

[01:04:23] Alicia Esposito: I mean, maybe give it a few weeks. Who knows? but like, there are so many interesting acquisitions

[01:04:28] happening, right? 

[01:04:29] Ricardo Belmar: with some really cool combinations here.

[01:04:32] Alicia Esposito: right. Or even a strategic partnership. Right. Like and I'm also curious why, like, they're not trying to make more of a connection to the big commerces, the Shopify, because like, that's, that's their core as well.

[01:04:45] And I think it ties back to your point, Ricardo, that, you know, these smaller organizations, they really lean into content and creative as a way to reach their audience, connect with them. They, they know what their people like, you know what I mean? Like they have that, deep relationship, but they also have the They may not have the capacity to scale as quickly or, or funnel as much money into advertising, but they can test, they can stand up some pretty cool services and experiences relatively quickly.

[01:05:17] They can test something on Instagram and be like, you know what? Instagram's not right for us. Let's just focus on TikTok and Pinterest. Like they can make those moves in a way that I think the bigger brands can't, especially as we think about. Okay. We have the branded account and then we have the individual store levels and we have X number of stores and who's managing these accounts and oh, oh, these associates are doing live streams.

[01:05:40] They have access to all like it, it becomes like this, this big ball of complexity as you kind of get into the, how are we going to test these different, these different offerings?

[01:05:51] Casey Golden: So I think it, it's gonna be really interesting to see what Pinterest might be able to do while Instagram's figuring out that whole video, because the only videos I see on Instagram are.

[01:06:04] TikTok videos,

[01:06:05] Ricardo Belmar: Yeah, they're just repurposed. Yeah. They're

[01:06:07] Alicia Esposito: Oh, don't get me into the repurposing conversation.

[01:06:10] Ricardo Belmar: that second whole that's another episode. I think that's like the that's part three and four of the social commerce discussion.

[01:06:19] Casey Golden: huge opportunity there to, you know, move up a couple lanes, coming around the corner here.

[01:06:27] Ricardo Belmar: Yep. So I, I guess we're kind of concluding here that everybody should watch Pinterest as sort of the dark horse that might upend the whole social commerce field and retailers should pay attention. Not kind of forget about them. The way we, we almost did until at Alicia reminded us

[01:06:42] Alicia Esposito: Glad to be of

[01:06:44] Ricardo Belmar: Yeah. Particularly if you're in that SMB retail space. And I'm, still gonna throw out too, let's not forget about YouTube. They've gotta figure out how they're gonna convert that into more of a social commerce platform. It, it's almost there not quite, but it, it seems like the base is there and the, raw materials are there to, to make it work.

[01:07:00] So we'll see how that goes. Well, Alicia, this has been yet another fabulous discussion. I'm so glad you're able to join us today.

[01:07:07] Alicia Esposito: yeah, me too. Thanks for inviting me.

[01:07:09] Ricardo Belmar: Well, Casey, I think on that note it's probably time to call this one a wrap.

[01:07:13] Casey Golden: That it is more to come.

[01:07:15] Show Close

[01:07:15] Casey Golden: if you enjoy our show, please consider giving us that special five star rating and review on apple podcasts. Smash that subscribe button in your favorite podcast player so you don't miss a minute. Want to know more about what we talked about today? Take a look at the show notes for handy links and more deets.

[01:07:34] I'm your cohost Casey Golden.

[01:07:36] Ricardo Belmar: And if you'd like to learn more about us, follow us on Twitter at casey c golden and ricardo underscore belmar, or find us on LinkedIn. Be sure and follow the show on LinkedIn and on Twitter at retail razor, and on our YouTube channel for videos of each episode and some bonus content. I'm your host, Ricardo Belmar.

[01:07:51] Casey Golden: Thanks for joining us. 

[01:07:52] Ricardo Belmar: And remember there's never been a better time to be in retail. If you cut through the clutter.

[01:07:59] Until next time, this is the retail razor show.