I’ve heard social commerce described as “the intersection between social media and e-commerce.” That’s a good analogy, but that intersection right now is a very crowded place, and no one is directing traffic.
There’s no denying that social selling is a powerful and increasingly influential sales tool. According to recent BI Intelligence, the top 500 retailers earned an estimated $6.5 billion from social shopping in 2017, up 24% from 2016.
Despite its influence, there is no single universally accepted definition for the social commerce model. It can come in many different forms, from group buying to social shopping to mobile apps to retailers adding social features, or shopping integrated into social media.
The one thing that all these “new” shapes of commerce share is their attempt to use social technology to replicate age-old buying models in the digital world. Take two girls shopping together in a store, or asking your neighbor for advice on which gardening tool to buy. Move those offline experiences to the online realm, and you have a social commerce experience.
Likewise, take the arcane art of bartering, where one person trades their wares for another person’s. But instead of trading goods or services, shoppers are trading their personal data around their preferences and buying habits for access to easy shopping channels or even credit toward the products themselves.
It sounds easy, but none of the current social commerce models get it quite right. Sites like Pinterest, Instagram, and Snapchat already offer a “buy now” button that can turn a view into a click and into a sale in moments. But, particularly since the Cambridge Analytica story broke, we’re wary of our social platforms using and monetizing our data. The process can make us feel exposed or like we’re being commoditized.
Sites like Amazon and Shopify are an extremely effective way for customers to browse an array of products, but they can leave the original brand we’re buying from on the sideline, removed from its customers without access to the data that would help them understand their customers and run their business.
The key is to find a model of social commerce that works for everyone. Ideally, it should:
- Give shoppers the ability to earn credit for sharing their own data and that of their social network and give the end user the ability to earn credit for their data
- Help retailers own the relationship with their customers while also giving them access to great intelligence and goodwill from happy customers
- Turn every individual into an influencer
- Use existing social media channels as a conduit to the brand itself
How it works
Say you want to buy a backpack. You go directly to the website of your retailer of choice, assuming the retailer offers a social commerce experience. You choose a selection of your favorite backpacks. You post a picture of the backpacks to your social networks and ask your friends to vote on which backpack they think you should buy.
By setting up the vote, you can earn shop credits. Your friends, who vote for the bag they think you should buy, can also earn store credit by voting. Under this scenario, you don’t need to have a major social presence to be valuable to the business. You suddenly become a micro-influencer.
This information you and your network provide then helps the retailer sell more effectively. They learn which of their products is most appealing to their customers so they can manage stock or display products differently. They also gain exposure to an expanded audience. Finally, they build a relationship with their customers that will help them build brand loyalty.
Social channels also have a role to play. In addition to influencing purchase decisions, social media is a large part of the product discovery and research phase of the shopping journey.
The next several years will see social commerce explode in influence, particularly if we can build models that benefit consumers and businesses. Thanks to e-commerce and social media, the world of commerce is on the verge of major disruption. And if we can get social commerce right, the future for retailers and shoppers will be bright.
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