Walter Haas has spent his entire career as a marketer, both for big retail companies and small startups. In each of his roles, he had a fascination with authentic product discovery, because as he puts it, “that’s the best channel in the world.”
Haas is the founder of GIST Technology, a social commerce app built around what users and their friends buy. Haas started GIST when he saw a coworker spend $5,000 on baby items after her friend sent her a Google Doc that listed out her recommendations on baby stuff.
Social commerce itself is a relatively new space, but one that aims to create an online version of how consumers discover products in real life, which is often through people they trust.
That’s a stark contrast to how most online commerce works, however. Searching for a screwdriver on Amazon, for example, may give you 1,000 results that you can then filter by price or shipping time.
“That’s a very rational, logical thing,” Haas said. “That is all in the name of efficiency, but it has nothing to do with how we’ve discovered products in real life for the last 2,000 years.”
In service of efficiency, those 1,000 options can actually be overwhelming, making it harder to decide what to buy.
“What social commerce does is bring back this emotional human layer to help you filter things and decide what to buy,” Haas said. When a friend recommends you buy something, you skip over some of the analysis you may otherwise do and you are more willing to just go through with the purchase.
“Social commerce is that shortcut to make quick and frankly emotional decisions,” he said.
In the case of Gist, the idea is to take the highly emotional modality of social media (sharing images, ideas and jokes) and merge that with commerce, Haas said. Although social media and social commerce may sound or look similar, their underlying business models are different, Haas said. At its core, social media’s product is media and the goal is to capture a user’s attention. Social commerce, rather, is about the transaction.
Haas believes social commerce could force companies and content creators to make more relevant products and content.
“Social commerce is the trojan horse for the new business model, which is ‘Does it sell? Yes or no?’” Haas said.
Gist is designed to help users sort through all their options and tap into the knowledge of their friends without having to text them at a random hour to ask them about their product recommendations. The app captures a user’s purchase history and makes it easy to share with other people so that user could see which screwdriver his buddy uses.
“That’s ultimately a signal of trust and trust is the highest converting thing in the universe,” Haas said. “That’s what Gist operationalizes at scale.”
The incentive for users is much the same as the incentive to post on social media, Haas said. The best social commerce apps tap into psychological motivations, Haas said. People want to share content, they want to help others and they want to get positive feedback from sharing their knowledge.
To get higher conversion rates on a piece of content, companies should think about how best to connect to the emotional triggers that get users to buy a product, said Haas. Adding that layer of trust and personality is often key.
A few apps are already doing this. The Shanghai-based app Xiaohongshu is aimed at Chinese-speaking expats and offers product and store reviews. The app has attracted influencers who use the app to share about what products they are buying.
Pinduoduo, also based in Shanghai, tries to replicate the experience of a physical Asian market with a layer of gamification for users.
“You’re going to look at it and say ‘This looks like social media,’” Haas said. “But ask yourself ‘What are they doing differently? Why is it that these user-generated content creators are more trusted and more focused on shopping than what you’d find on social media?’”
Ultimately, successful marketing comes back to trust. One tactic that always works is getting users to see a recommendation from someone they trust, and consumers are adept at sensing inauthenticity, Haas said. Still, the best practices around how to do that within the social commerce space are still being formulated.
“There’s not a lot of sophistication in this field,” Haas said. “We’re still in the early innings.”
The partner marketing ecosystem speaker series is brought to you by Impact. As part of the series, Martech Record also spoke with Erica Yang and Adrian Quihuis of Real Hype Creative. You can read about that conversation or stream it here.
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