Social Selling Is The New Retail

The Real Estate Espresso Podcast

Social Selling Is The New Retail

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Social Selling Is The New Retail

Welcome to The Real Estate Espresso Podcast, your morning shot at what’s new in the world of real estate investing. I’m your host, Victor Menasce. Today’s show is the second in a mini-series on the changing face of business.

On Friday’s show, we talked about how Google is keeping search traffic on the Google platform and is not sending organic search results to the source pages the way it used to. Traffic to businesses is dramatically reduced. This will cause many businesses to either adapt to whatever is going to replace organic search or face bankruptcy. This is also going to affect every aspect of retail.

So much has been written about the retail apocalypse and there’s no question that the footprint of traditional retail is changing. There’s much less diversity in the shopping experience today than, for example, when I was a teenager. In the US, we had numerous department store chains like Bloomingdale’s, Macy’s, Sears, Kmart, Bergdorf Goodman, Phileins, Lord & Taylor, Neiman Marcus, JCPenney, Montgomery Ward, Ames, and then of course Walmart and Target, and countless others. Today, there’s only a small fraction of those remaining.

We’re all familiar with the e-commerce revolution and how Amazon and Walmart are increasingly dominating that space. Even major retailers like Home Depot and Best Buy have a larger online catalog of products that are only a couple of days away from your home. But the new revolution is a form of shopping called social shopping.

This has been in existence in China for more than eight years, still in the experimental stages in the US on a very limited basis with specific platforms. So what is social shopping? It’s a method of e-commerce that integrates social aspects of human interaction into the online shopping experience, and it leverages social media platforms and online communities to facilitate the discovery, research, sharing, and purchasing of those products and services.

Think influencers. Essentially, social shopping attempts to mimic and enhance the social interactions found in physical malls and stores. It’s a little bit like asking a friend for advice. It starts with social interaction, encourages communication and recommendations among shoppers, often leveraging user-generated content like reviews, photos, and videos. It aims to reduce the friction in the buying process by allowing users to discover and purchase products directly within the social media app without having to navigate to an external website.

Customers are more likely to trust recommendations from people they know or authentic user reviews over traditional advertising. Social shopping harnesses this word-of-mouth power. Social platforms are powerful tools for product discovery. They usually involve direct shopping within the social media application. Instagram is doing this now with something called Instagram shopping.

Brands can set up shoppable posts, stories and reels with product tags that allow users to tap and purchase directly within the app. Sephora, the cosmetics company, is a great example, using user-generated content and influencer partnerships.

Facebook Shops has created customizable storefronts on Facebook, allowing customers to browse and buy products without leaving the platform. The clothing chain H&M is in this arena as well. There’s also the TikTok shop, which started in China, but it’s integrating the shop tab into profiles, allowing product tagging in videos and it supports live shopping campaigns.

Even Pinterest is using buyable pins, ideal for visually driven products, allowing users to purchase directly from pins. Companies like Wayfair are using this now.

There are also shopping communities. These platforms bring together like-minded people to discuss and shop based on common interests. Since people spend a large percentage of their time on social media platforms, these platforms are looking for new ways to monetize the experience.

I can tell you that Facebook is looking at the types of posts you make on social media. They determine that if you’re actually a business user, they’ll unilaterally change the nature of your Facebook account to a business account. It means the reach of your posts will be suppressed. If you want greater exposure, you’re going to have to increase it by purchasing advertising. I know this because it’s happened to me.

Now think about the types of events that might create artificial scarcity. What if you built a bunch of hype around a particular product? Imagine if you could get a volume discount on a new smartwatch but you don’t need 200 smartwatches, you only need one. What if you all participated in a buying event hosted by a social media influencer where you all joined the event at the same time, participated in the live event and then all the participants get the discount.

This is somewhat reminiscent of the blue light specials at Kmart. A staff member would bring a cart with a flashing blue light next to a discounted item and then there’d be an announcement on the PA system saying “Attention shoppers, there’s a blue light special in aisle four for the next 10 minutes” and then there would be a wave of people running over to aisle 4 to see what was on sale and a frenzy of buying would take place for the next few minutes.

This is an area where the United States is absolutely playing catchup. The Chinese version of tik-tok has had this now for about eight years and it’s emerged as an absolute powerhouse in social commerce. It’s transformed from a short video app into a full-fledged shopping ecosystem. It allows for live-streaming commerce, real-time questions and answers, limited-time offers. All of this offers a seamless purchasing experience without leaving the app.

Then of course there’s WeChat. This is that super app that incorporates all kinds of things that are integral to daily life in China. It includes a robust e-commerce feature. Within WeChat, brands can create mini-applications and it makes it possible for customers to buy products directly within the application. There’s many, many examples.

So initially, these social events will be led by influencers who have a large following, but eventually, AI influencers will outnumber real human influencers in this brave new world.

All of this seems focused on business to consumer consumption. So far, I’m not seeing anything that’s truly optimized for business to business. For those of you in real estate, we need to be thinking of what the new business models will be as AI changes the way marketing is done and social selling changes the way people buy things online.

As you think about that, have an awesome rest of your day. Go make some great things happen and we’ll talk to you again tomorrow.

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