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1st2c CGM case-study: Nintendo Wii and The Emergence of Social Commerce

Online commercial platforms such as ebay.com and amazon.com were popular commerce channels for holiday shoppers this Christmas. While the majority of consumers used these online commercial websites a new channel of online consumer commerce began to gain traction.

CGM and Consumer-to-Consumer Commerce

Online forums/message boards were used by consumers to buy and sale items during this Christmas holiday. This new form of commerce resembled in structure to peer-to-peer networks. Peer-to-peer networks in which have gained popularity for downloading music and movie files has influenced a new trend in consumer commerce.

Consumers from across the United States communicated via online forums/message boards in order to buy and sell goods and have created a new form of online consumer commerce, consumer-to-consumer networks. Similar to the p2p networks, each consumer either buying or selling represented a node in which together formed a social network of online consumer commerce.

The Wii Catalyst in Consumer-to-Consumer Commerce

The demand for the Nintendo Wii game console soared this holiday season. Retailers both online and off line were not able to match the consumer demand for this hot holiday item. We at 1st2c discovered that the consumer-to-consumer online network empowered consumers by offering them a additional platform to purchase the Wii gaming console. Via online forums/message boards people bought and sold Wii consoles without the assistance of traditional online commerce platforms such as ebay.com, walmart.com, and amazon.com.

In addition, consumer-to-consumer online commerce were in some instances the only channel for consumers to obtain a Wii console for this Christmas holiday due to the lack of availability of main stream online commerce platforms .

CGM Discussions of Wii Social Commerce Transactions

Using 1st2c‘s deep web monitoring technology we saw that consumer discussions of this secondary market was substantial and grew as the Christmas holiday approached.

wii-graph-2.png

Effects of Consumer-to-Consumer Commerce

This social commerce channel that developed increased the availability of the Wii to consumers during the holiday season. In addition, it increased the growth of secondary gaming console markets. Consumers that had the Wii game console previous to this holiday rush had the opportunity to sale via the consumer-to-consumer commerce channel and use the revenue to purchase another gaming console or software.

An example of this phenomena was observed by our research team in the consumer cell phone market. Consumers used the consumer-to-consumer channel through CGM platforms (ie forums/message boards) to sell their cell phone in order to purchase a new model via traditional retail channels. This form of commerce reduced the duration and financial barriers that consumers faced when deciding if to upgrade to a new cell phone.

The Future of Consume-to-Consumer Commerce
The emergence of consumer-to-consumer commerce via social channels (ie forums/message boards) poses some important questions regarding retail markets and marketing of consumer goods.

1. What can be learned from social commerce and adapted to retail commerce?

2. What consumer insights can be learned from social commerce?

3. How can marketing techniques adapt to the evolving social consumer generated media platforms such forums/message boards, blogs, videos and social networks?

We will continue to follow this CGM trend as it evolves in order to provide our clients with tools to maximize their marketing impact and ROI.

1st2c in a nutshell

1st2c (www.1st2c.com) is the home of online Online Strategizing Research© – the most comprehensive data-to-strategy methodology available for the networked market. Strategizing Research©’s insight and opportunity driven orientation creates a vivid picture of mindsets and behaviors of the networked marketplace and adds new dimensions to both online and offline strategies.

1st2c works with Fortune 500 companies on adding new dimensions to overall marketing strategy and on monitoring and engaging the networked market.

Ofer Friedman

Chief Research & Client Officer

1st2c

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1st2c CGM Report: Wii Triggers Social Commerce

 

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.

(http://techland.blogs.fortune.cnn.com/2007/11/30/even-at-600-the-wii-is-a-must-have-gift-this-season/)

 

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

wii-2-pic.jpg

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.

 

Ofer Friedman

Chief Research & Client Officer, 1st2c 

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