Relatability: Consumers influencing purchasing decisions

Reality shows acknowledged that time had come for having real people as media figures. And maybe even celebrities’ time has gone… a New York Times article described the phenomenon of reality TV shows, “the complete tabloidization of celebrity culture has lead to the death of mystery—famous people, living under a microscope are becoming reality stars of sorts. The definition of celebrity is changing. Relatability will be the next wave of pop culture.” And who better to relate than a spokesperson of one’s own community, as they have the most credibility.

As consumers become the marketers, expect to see more people like you and me: friends, fans and followers greatly influencing purchasing decisions. Consumers are increasingly tapping into their networks of friends, fans, and followers to discover, discuss and purchase goods and services.

No surprise that consumers are embracing communities, tools and apps that allow them to discover selections from friends, fans, followers and so on. Just a few examples: Kaboodle, Svpply, Fancy and Nuji all help users to discover new products from apparel to art that have been selected by fellow consumers. In November 2010, Gifts.com and Hunch have joined forces to create GiftFinder app, which links to Facebook and suggests suitable gifts for friends based on their profile information. The company said the conversion rate was up to 60% higher than when users were shown recommendations. Soon to go live, Motilo.com, will use a videoconferencing feature to allow users to shop with friends and create complete outfits, even from different online stores.

Other indicators of this rising trend:

• Juicy Couture found that their product purchase conversion rate increased by 160% after installing social sharing features (Source: CreateTheGroup, February 2011)
• Incipio Technologies, a gadget accessory retailer, found that referrals from Facebook had a conversion rate double the average (Source: Business Insider, March 2011)
• But it’s not just about Facebook. Take for example the explosive rise of the daily deal site Groupon, which used referrals from friends and colleagues to drive sales of over 40 million deals in the two and a half years since it launched in November 2008, via email)