Many people have doubted the return on investment (ROI) of social media (see our previous post). But even for these sceptics social commerce provides a tangible link between activity, channel and results. But it is not just about the ROI; for marketers it delivers unbelievably rich data (e.g. linking products to peoples social graph, creating digital word of mouth and provides game-changing insights about customers, products, and brands. Social commerce benefits both the brand and the customer. Why? Well first let's take a look at what social commerce is.
Paul Marsden provides a great introduction into social commerce and how it can be used:
What does Social Commerce deliver?
Social commerce works because we trust our friends and peers more than we do advertising (source Nielsen).
It links customers reviews, stories, or product questions and answers directly to products – some of these may be friends or peers therefore providing trusted information. This saves time on research they might otherwise have spent hours on. These conversations and reviews from a shopper’s own friends on a branded site (e.g. if a product has 150 reviews at a store and 3 are from people) provide valuable information for the buyer but also the retailer can link personal data to each purchase.
How the Change in Consumer Behaviour Reinforces Social Commerce
Gerd Leonhard in the presentation below highlights the need to add value, recognise the shift in how consumers behaviours are changing and be adaptive to these changes. Businesses need to adapt to the pace of change that is and think about how they engage customers in this connected world. Gerd has long championed the concept of convergence; the merging of technologies to create new business models using social media, mobile, location based services....this is the new commerce. Despite the opportunities mobile commerce presents, but as yet many retailers have no clear strategy for this Econsultancy - 10m UK consumers use mobile commerce.
Why is Facebook winning at Social Commerce?
Facebook is the platform in which we spend more time (Facebook users spend 1.5x more online that other Internet user) and invest in more social interactions than any other. Its meteoric growth is only matched by the insightful way the socialisation of data has enabled the 'like' button to be extended out to websites including e-commerce sites.
It is this extension of Facebook social plugins and easy integration into websites that has allowed elements of Facebook to be placed into websites and blogs extending Facebooks reach. Furthermore full integration with Facebook's Open Graph can turn a product page on the brand site into the equivalent of a Facebook page. As Jay Baer put it Facebook is becoming the plumbing on the web.
So why do retailers and brands spend money building up millions of Facebook Page fans and then drive them away from Facebook to convert a sale?
The Facebook Page is the New Microsite
Many brands use Microsites for promotional campaigns. They enable strong digital experiences and deep campaign integration. But Microsites are also a serious problem because they have a limited shelf life (and cost a lot to develop) and in addition there is still the need to spend money driving traffic to the site.
On the other hand you could use a Facebook brand page. Facebook pages deliver new opportunities to build a brand community, maintain longer relationships with customers thus reducing costs.
With the ability to integrate digital media directly into the page - what is there not to 'like' about this. Facebook Likes can also enable one-time (and in some cases ongoing) data transfer between the user and the brand to deliver better marketing experiences and feed enterprise databases. Facebook pages can become an integral part of a high-quality band experience and establish long-term messaging and data relationships. These offer ongoing value to the brand at little incremental cost.
Facebook facts for Facebook stores
- Here is a link to some great examples of Facebook stores and some here from Mashable.
- Brands are already being followed and consumers are often looking for benefits .
- The The top 3 brands on Facebook (by fans) all sell directly on Facebook - Coca-Cola (24m),Starbucks (20m) and Disney (19m).
- 76% of retailers surveyed plan to use Facebook for ‘social commerce’ initiatives.
- 2.5 million sites and counting have integrated Facebook Connect.
- 10,000 new sites integrate with Facebook every day (with social plugins)
Facebook is perfectly positioned to seize the opportunities of social commerce and brands are eager to tie together the ROI and link relationships to sales. However, the challenge for brands will be to create experiences worth sharing,be selective and tailored in their offers (if habitual it diminishes the brand position) and provide feedback and open sharing. Importantly businesses will need to ensure that they are relevant, use data to improve customer experiences and deliver value - leading with human relationships.
Many businesses will fail at social commerce, not venturing beyond offering the benefits of transactions within Facebook. If you look at the brands that are doing well they are providing far more value than merely the opportunity to buy their product.
A last look at Social Commerce comes from Erik Qualman and highlights the need for busineses not to think of this change as a question of if it is going to happen but simply when and how fast - and if they are going to survive!
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