Social Media sees the development of digital consumer-to-consumer trade
Social Media is already challenging the hegemony of commercial media, but has it already begun to incubate a challenge (or an opportunity) for commercial trade?
This holiday season saw the age old phenomenon of Social Trade being energized and re-shaped by Social Media has been spotted in the game console market. The lively consumer-to-consumer trading of Nintendo Wii consoles was a vivid example for how Social Networks develop as an alternative (or a parallel) to online commercial trade channels.
The Nintendo Wii case suggests the (re)-emergence of Social-Trade-over-Social-Media as a market force to be reckoned with and managed.
Wii redefines consumer “must have” behavior
Nintendo Wii has already been widely celebrated as one of the mega-hits of the 2007 holiday season.
Fueled by media publications about supply shortage, thousands of desperate consumers reportedly skimmed store shelves and turned to online commercial outlets like Amazon and eBay, willing to pay even a premium price of $600 per Wii console.
No wonder that below market surface determined consumers turned to Social Media networks not only to find the prized console but also to buy and sell one.
1st2c tracking system picked up a significant increase in volume of posts in social networks during the holiday season, offering Nintendo Wii for sale.
Table 1: Volume trend of posts referring to Wii for sale
Overall number of posts on Wii (21,140) is impressive in itself. Additional terminologies used for with the same intention increase the post count even further.
The surge in offers for selling Nintendo Wii consoles started mid-November and stayed at above normal levels throughout the holiday season, with fluctuations triggered occasionally by both online and offline media publications.
The vast majority of the posts seem authentic, though it is not unreasonable to assume that some were placed by traders masquerading as consumers.
Regardless of who placed the offerings, the most important insight is about the emerging use of social networks as social trading platforms.
Nintendo Wii is just one example for the developing phenomena of Social Media platforms becoming Social Trading platforms.
Social Media also active as secondary market
The case on Nintendo Wii refers to new products traded via social platforms, but what about used (second hand) products?
Recent projects we have done in the mobile communication market identified a very active scene in Social Trading of used handsets.
Typically, first and second tier mobile users are offering their old handset for sale on commercial online trading platforms like Ebay. But the Social Networking platforms are already featuring the same function driven by consumers themselves.
What Social Media offers to these grass-roots traders is a highly segmented shared-interest audience and a highly trusted environment.
On the macro level, Social Media offers a very efficient market driver:
For some types of consumers it lowers the barriers of migration to next generation handsets by offsetting the costs against the resale value of their old handsets.
For other consumers it allows entry to mobile communication.
The threat and opportunity in Social Commerce
Social Commerce grows and is likely to continue to develop.
For many marketers, Social Commerce poses a threat since it bypasses commercial trading platforms with established trading and promotion infrastructure.
The more consumers shift to social commerce the less control marketers have on what is being offered, how it is being offered and the entire marketer-consumer relationship that follows.
On the other hand, Social Networks can potentially act as market catalysts. They may eliminate availability barriers (a consumer in Timbuktu can make a product available to a consumer in New York). They may accelerate purchase cycles – especially with more costly products (now it’s easier for early adopters to migrate to next generation products but selling the older product they have). They may provide more people more access to a broad variety of products. They facilitate the power of buzz.
Can and should marketers try to manage Social Commerce?
They may have to.
As Social Networks acquire an increasingly critical role in the driving market behavior it becomes a question not of If but of HOW.
Isn’t it another dimension to Social Marketing, guerilla micro-marketing online buzz agents?
The right models will need to account for the new rules of engagement in the networked market (see our pervious case studies).
Interestingly (and perhaps expectedly) we have found Social Trading to sprouting with premium positioned brands. Aspirational brands in diverse markets such as apparel, cars and consumer electronics are already developing Social Commerce.
From both marketing and reputation management considerations, marketers of such brands may benefit from tracking and perhaps also from creating a model for managing online Social Commerce.
1st2c in a nutshell
1st2c (www.1st2c.com) is the home of online Online Strategizing Research©. It is the most comprehensive data-to-strategy methodology in the networked market.
Online Strategizing Research© creates a vivid picture of live market mindsets and behaviors and identifies actionable insights and opportunities.
1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.
Chief Research & Client Officer, 1st2c