1. Social Commerce: Disruptive Potential of Social Media in Ecommerce and Classifieds Thad Eby, UK Director

2. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 2 Agenda  Framing the problem: why user-generated content  Social Commerce as part of an online strategy  A Capability Maturity Model for Social Commerce

3. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 3 What happens when Social Commerce is Applied Successfully? Web 2.0 Told Us Community was Important The Product Catalogue Becomes Richer From 5 to 58 Searchable Attributes Additional “Sort By” Capabilities 41% Higher Order Value Consumers Define “Top Products” 63% Higher Order Value Returns go Down 20.4% Higher Return Rate w/o Reviews Better eCommerce 49% Higher Conversion Rate 22% Increase in Average Order Size

4. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 4 Browsing Direct to site Organic search Online advertising Affiliates Email marketing View of the Online Buying Process Search Traffic Conversions Margins Guidance Traffic Paid search SEO Ranking Landing page relevance Relevant promotions Million results or none Dependence on relevance Unfamiliar taxonomy Limited refinement Relevance control Static merchandising “Which is the best product?” Static merchandising “Can’t find what I need” “Can’t find fit for my requirements today” Leave website Call customer service Sub-Optimal Purchase Purchase Fewer Items Lower Margin Purchase % Traffic increase % Conversion increase % Order size increase % Sales

5. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 5 Framing the Problem  Online sales and customer loyalty are driven by a better user experience –Dialogue –Advise  User experience is informed by a variety of factors –Design –Technology –Data  Customers are playing an increasingly pivotal role in the buying experience

6. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 6 Push & Pull: How to Get the Most from User-Generated Content  What do your customers want to do today?  Who are they buying for today? We can advise customers Customers can advise each other

7. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 7 Achieving Objectives by Doing More  More with data –leverage what you know –make better inferences  More with technology –easy-to-use tools –enhanced capabilities  More with user-experience –simplify the interaction –while making it more robust

8. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 8 A Comprehensive Recommendations strategy Static Placements Blanket placements based on high inventory levels or late lifecycle products Product Attribute-based Merchandising Merchandising based on Top Sellers, Price, Brand, Margin, Overstock/Availability, etc. Review Attribute-based Merchandising Spotlight products based on information discovered from Customer Reviews such as Top Review Rating or Rated Highly by Verified Purchaser Profile / Customer Attribute-based Merchandising Merchandise based on profile information such as Amateur / Professional, Geography / Location, Male / Female Order / View History-based Merchandising Highlight products based on past purchases or purchases by similar customers / profiles User Ratings Web Analytics Online & In-Store Inventory Financial Data Pre- Negotiated Pricing Docs (FAQs, Reviews, Articles, etc.) Customer Segment Data Drive Merchandising From Any Data

9. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 9 Your Merchandising Strategy Cross SellsUp SellsFeatured Products RecommendationsPersonalizationDown Sells Content Spotlighting Forced Placement Store within a StoreBrandingKeyword Redirects A complete Merchandising strategy consists of many different elements used in conjunction.

10. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 10 Contemporary Structured Approach Email Targeting Search Engine Brand Site Utility Ease of Exploration Relevant Guidance Product Selection Personalization Cross-selling Promotions Social Information Product Availability 1.Attract users 2.Provide optimal user experience 3.Boost conversion 4.Provide powerful business analytics Reporting, Analysis & KM Infrastructure Traffic Sources Page Views Conversions

11. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 11 What this all comes down to … know your customers better … advise your customers … let your customers advise each other … build lasting relationships

12. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 12 Speaking points for next slides - CMM  Purpose is to provide an overview of the importance of a comprehensive view of the online retail experience and maximizing results by making more effective use of existing (or new) assets, such as data, technology and human capital / experience  [Move quickly through these slides just to emphasize the build] show where user-generated content fits in the picture – it’s powerful asset for online experience but not the complete story! But the ultimate goal of this section is to tee up the CMM on social commerce which is the next section

13. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 13 Online Capability Maturity: Where does Social Commerce fit? Product Catalog Integrated Search and Navigation

14. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 14 Online Capability Maturity: Where does Social Commerce fit? Product Catalog Margins, Revenue, Pageviews, Conversions Dynamic Merchandising

15. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 15 Online Capability Maturity: Where does Social Commerce fit? Product Catalog Margins, Revenue, Pageviews, Conversions Product Info, Lifestyle guides, Other Content Content Sells Product

16. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 16 Online Capability Maturity: Where does Social Commerce fit? Product Catalog Margins, Revenue, Pageviews, Conversions Ratings, Reviews, Tags Product Info, Lifestyle guides, Other Content Social Commerce

17. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 17 Online Capability Maturity: Where does Social Commerce fit? Product Catalog Margins, Revenue, Pageviews, Conversions Ratings, Reviews, Tags Product Info, Lifestyle guides, Other Content Store Inventory Multi-Channel Navigation

18. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 18 Online Capability Maturity: Where does Social Commerce fit? Product Catalog Margins, Revenue, Pageviews, Conversions Ratings, Reviews, Tags Product Info, Lifestyle guides, Other Content Store Inventory User Profiles, Order Histories Personalization

19. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 19 Speaking points for next slides - CMM  There is a spectrum of capability relevant for social commerce  Can start at any point in the spectrum, depending on priorities, plans, resourcing, strategy  Important to think about today and tomorrow: build for future to stay ahead  Creativity in UX offered: to build community and drive sales  Must be intuitive, that is key – and it’s easy to over-”technology”, over-complex this stuff which will be counter productive  Thinking beyond reviews to other forms of user-generated content –Forums –Blogs –…  Different ways to use the content (and think of this as a CMM) –Search –Sort –Browse –Personalized shopping  Integrate with other data & content –User profiles (target your goals for today – buying for yourself or someone else) –Relevant content  Integrate with other technologies –Reviews vendors –CMS

20. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 20 Social Commerce (1) Guided Navigation® Refinements Allow users to refine based on objective product attributes Social Browsing Leverages Guided Navigation® to generate a dynamic taxonomy based on user reviews Requires a dynamic taxonomy which updates at the speed at which your users generate content

21. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 21 Copyright©2007 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Social Commerce (2): Help users find relevant reviews Tag Clouds Guided Navigation TM Sorting Dynamic Charting

22. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 22 Copyright©2007 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Pivot between related products and reviews Social Commerce (3): Guide users to the products right for them… …Or whomever they are buying for

23. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 23 Social Commerce (4): Deep Insight Into Reviews  Integrated reviews content  Relationship Discovery  Concept Clustering  Guided Navigation  Text snippets  Rich UI

24. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 24 Technology as an Enabler Product Data Unstructured (manuals, data spec sheets, etc.) Expert Reviews and Ratings Data Sources POS, Purchase History, Accessories, Profitability, etc.  Cater to individual use-cases through integrated information access capabilities  Ability to integrate content from across the enterprise  Scalable infrastructure  Flexible & extensible infrastructure

25. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 25 Summary  User-generated is critical in a comprehensive online strategy  User-generated content must be seamlessly integrated into the customer experience  Drive results by doing more with user-generated content

26. Copyright © 2008 Endeca Technologies, Inc. All rights reserved. Proprietary and confidential. Page 26 Thank you