July 6, 2012

In-depth: Charles Eklund at LivingSocial

Charles Eklund, Head of Product and Business Operations, UK and Ireland at LivingSocial, is among the speakers at The Figaro Digital Marketing Conference in London on 12 July, where he’ll be discussing the rise of social shopping. Here he talks to us about the LivingSocial model and its impact on ecommerce

Social shopping, says LivingSocial’s Charles Eklund, is turning the marketing model upside down. From networks of like-minded users gathering together to share deals and information to new leads for businesses in search of the most relevant consumers, this personalised, localised approach to ecommerce is having a profound effect on the way business is done online. 

“Social shopping something we’ve done, I would argue, since the dawn of shopping itself,” he says. “In fact, forget about shopping – since we were all just bartering. If we’re friends and you buy something you like, chances are you’re going to tell me about it, and then I can go and get it myself. The social shopper is an individual who takes in information from outside sources as well as their own network, and that information then filters back into social media. We’re more connected and more communicative about everything we do now. Our buying habits are much more exposed. I might not talk to you for three months but I can still get an idea of what you’ve bought based on Facebook, Twitter and so on. That’s what I mean by the social shopper – someone who takes in different points of interest and shares those.”

So how is this turning the marketing model upside down? From a business-owner’s perspective, says Eklund, social shopping sites like LivingSocial enable local companies to sidestep expensive, traditional marketing channels like TV, billboards and radio – the precise impact of which can be tricky to calculate – and instead look at providing engaged, local consumers with a direct incentive to get involved. 

That model – familiar to nearly 60 million worldwide – works by offering members a daily discount voucher redeemable at a local business. Once members have bought a voucher, they’re encouraged to share that link across their social networks. If three friends buy the same deal, the original member gets that deal for free. Businesses themselves must offer their products or services at a discount of at least 50 per cent, and they have the benefit of a highly engaged, socially-active audience in whose own interest it is to spread the word.

“Let’s say I’m running Charles’ Italian Restaurant,” says Eklund. “I’m a small, local business. I don’t have a lot of disposable income for TV ads or national press. But what I do have is an excellent spaghetti Bolognese. Now, say I offer a discount voucher on that, which would mean taking some of the money I may have spent on other advertising avenues. When a customer buys that voucher for my spaghetti – that’s as close as you can get to a guarantee that someone is actually going to bring me their custom, and I’m only paying out on that discount when someone actually walks through my restaurant door. I only pay for the footfall I actually get.”

Contrast that, Eklund says, with a radio campaign which first needs to be heard by local lovers of spaghetti, remembered and then acted on. 

“This is what I mean by turning the marketing model upside down,” he says. “As a small business it enables me to be very smart about money and really use it to get people through the door. And if a particular voucher doesn’t work, it just means people haven’t bought it. I haven’t lost anything and there are things I can learn from that – maybe my offer just isn’t that great and I need to re-evaluate that.” 

So, users are incentivised to take on the role of ambassadors for local businesses – even if only for the duration of a single offer – and merchants get access to useful demographic data. “We’re not reinventing the wheel here,” acknowledges Eklund. “But we are bringing this directly to your inbox. That’s the benefit – it’s coming directly to you.” 

The shift towards mobile, of course, is a huge issue in this field and for Eklund it holds the key to the future. It’s not, however, without its challenges. 

“It’s a question of getting people more comfortable with mobile,” he says. “When LivingSocial started there was a very small percentage of people doing transactions on mobile devices. Now that’s up in the region of 20 per cent and it’s going to continue to rocket as mobile devices and tablets become more ubiquitous. Right now LivingSocial aims to be relevant on a daily basis. But you can imagine a future where social shopping will be relevant every moment of your life. I don’t necessarily see us doing this, but imagine people being exposed to relevant offers at breakfast, on the way to work – if the deals and experiences are appropriate, people could be exposed to them as they just go about their lives.”

If there’s one lesson marketers are learning from the evolution of social shopping, it’s that one size definitely doesn’t fit all. Consumers expect offers, deals and experiences tailored to the way they live. But, as the success of the major social shopping sites shows, recognising and rewarding users is a powerful motivating force.

Article by Jon Fortgang