Social Commerce - e-Commerce becomes Social

What is Social Commerce?

Social Commerce is the monetisation of Social Media using eCommerce. It is the concept of word of mouth marketing aligned to eCommerce. It is being driven by convergence .

Advertising and commerce are inevitably drawn like gravity to where people spend their time. As people have migrated more to using social networks the question has been debated as to how to effectively market to consumers on social networks. More importantly there has been much debate around the return on investment (ROI) of marketing to customers using social networks. For many Social Commerce answers the ROI question.

The two pinciples of Social Commerce are:

• connecting people and their friends where they buy (e.g. using Facebook connect to join an eCommerce site)


• helping people buy where they connect (e.g. adding an eCommerce store within a Facebook page)

We are entering a new period of shopping that is collaborative and social, where  people influence peers and brands compete based on value and experience within the social networks.

Why is this important?

Social Commerce extends the abilities of brands to engage with customers in a social context, where relevant information, interaction and participation is shaped not only by the media, but by their friends and their broader social network.


Social shopping plays to a natural extension of our everyday behaviours, where we go shopping with friends, seek advice from friends and then decide based, at least in part, their feedback.

We learn from the knowledge and experience of others we know and/or trust. However, it is the social psychology of influence which characterises the difference between eCommerce and Social Commerce and how it can be used to improve conversion rates and sell products / services.  The main methods of influence are: popularity, authority, affinity, scarcity, consistency and reciprocity.

Here are some videos that explore the use of Social Commerce:

1. from IBM looking at some of the figures driving the rational for social commerce - click here


2. Zugara's augmented reality - click here


3. a look at the future of retail - click here

3 reasons why Social Commerce will be big in 2011:

• People trust products and services purchased and endorsed by ‘friends’; social commerce facilitates this within social platform. Social commerce uses word of mouth marketing effectively to monetise social media.
  
  
  
  • Nielsen report on consumer trust and some more information. Further to this you have the socialisation of ads examined here.
  
  
  
  

• Provides robust measurement model – traffic, reach, engagements, conversion and sales and ROI - here is some further reading-case studies on Bazaarvoice website


• Sales growth of online retail sales outstrips that of traditional bricks and mortar (source Financial Times). According to Comscore 89% of people online visit online retailers. If you then add into that the research by Nielsen that 1 in 6 then purchase you can see the numbers become compelling.

	1-800-Flowers - click to see on Facebook

A look at mobile; Facebook deals - click here and Dell - click here a look at collaborative buying

What to consider?


There are six key principles involved in social commerce:

1. Social shopping - shopping with friends e.g. www.shopwithyourfriends.com , Groupon. The array of features in the market are as follows: group buying, cooperative shopping (browsing together), group feedback (ask friends their opinion) and integrated social shopping e.g. Bestbuy ; Groupon , Woot

2. Ratings and Reviews - allows people to exchange product feedback and inform each others choices through views and   experiences e.g. Amazon and iTunes.

3. Recommendations and referrals - personalised endorsements of online products or services shared with social connections e.g. pay with a Kaboodle ,

4. Forums and communities - communities of customers with a common interest/passion/or goal e.g. Justboughtit

5. Social Media Optimisation -this consists of the deals, news, bookmarking, links and methods of sharing that builds the traffic and develops the social proposition.

6. Social Apps and Widgets - these allow integration of social commerce across different platforms and through different channels e.g. apps allow integration on mobiles and some apps also allow integration into Facebook pages.

Social shopping carts?

Payvment, a popular Facebook shopping-cart application.

SocialShop is a integrated Facebook application by BigCommerce. SocialShop is not a stand-alone shopping cart that allows consumers to complete their purchases without leaving Facebook, instead it links to the merchant's ecommerce site.

Social Store Builder integrates with Facebook but rquires you to have a gold plan account.

3DCart users can integrate their online stores within tabs on their Facebook fan pages. SocialCommerce will automatically match the look and feel of customers' ecommerce sites and allow for additional customization, as well.


What are the trends?




Facebook has a clear interest in developing the social commerce opportunity; it has a currency, Facebook credits, which allows a user to purchase credits with a credit card, receive credits as a gift, or earn credits through games and applications. Facebook connect allows the extension of the the Facebook platform outside of the Facebook platform and integrating into other websites. Smartphones and the onset of the mobile will further push the use of social commerce as integration with locations based services and augmented reality provide new models for engaging customers. Facebook deals using the check-in are already demonstrating the commercial value of deals and incentivising social collababoration.

New services such as Shopkick, introduce real-world incentives to recognize and encourage checking-in and might well represent the future for location-based marketing overall. Using mobile phones, consumers can check-in to a store to initially earn "Kickbucks."

What do you think?