What is social commerce & why it's replacing traditional e-commerce

Social commerce brings the benefits of e-commerce and social networking together. It isn't achieved by using specific software, or specific technqiues; you can implement social commerce by choosing which social networks and features you want to trigger based on an online shoppers actions.

Examples of social commerce

Levis website using Facebook's social plugins

By using Facebook's Like social plugin, shoppers on Levis' e-commerce site signal to their Facebook friends which jeans appeal to them.

This allows users to 'shop with their friends' and empowers Levis with deeper customer engagement and extends their prospective customer reach to the friends, and friends of friends of the shopper.

Real Chai selling on Facebook itself

Another approach seen here is selling within Facebook itself. With prominent 'Share' buttons visitors's activities are broadcast to their friends extending Real Chai's reach and awareness.

Advantages of social & the benefits of e-commerce

Each social network's concept of a user's network is subtly different. On Facebook, you have to be mutual 'friends' for their activity to show on your wall, on Twitter you just have to 'follow' someone in order for their tweets to show in your strean, and LinkedIn also needs duplex connections for your stream to show your 'connections' activities. Using Facebook as an example to demonstrate the benefits of social for now:

When customers share a story about your business on Facebook, that story is published to their News Feeds and their friends’ News Feeds. Because the average Facebook user has 130 friends, a company’s message can be shared exponentially, with the influence and impact of a personal referral from a friend.1

When a user's activities are broadcast to their social network, if that activity was a positive interaction with your company (e.g. they liked or bought a product) it increases your reach to that entire network; resulting in the confluence of viral effect with the marketing funnel.

Impact of the network effect on reach and awareness

If we look at Bing's Facebook page to illustrate how reach works in a social network:

  • the page itself has 1.7m fans
  • those fans have a total of 232m friends, and over a given time period a subset of this group is likely to have been exposed to the Bing brand

The average Facebook user has 130 friends1 which implies that if your company's Facebook page had:

  • 50 fans
  • you could potentially reach another 6,500 friends of fans

Social dimensions to consider including

Incorporating any, or all, of the following social elements will enhance your e-commerce offering into social commerce status:

  1. Integrate social networks' plugins into your own site
    e.g. Add a Facebook 'Like' button for each product in your online store/catalogue

    When a user Likes the product, it will be reflected on their wall, and therefore visible to their (approx 130) friends. Tip1: Average media site with the Like button sees 300% increase in referral traffic.

  2. Set up a branded social network presence e.g. Facebook Page

    When a user Fans your Page, your updates will be shown on their New Feed. (Implies you will need to keep your Page updated ;))

  3. Social network storefront

    Sell on Facebook itself. All browse, wishlist and purchase activity should be streamed to a Fan's wall enabling you to benefit from the social effect.

Why you need e-commerce, at a minimum

I considered starting with the follows statistics, but am instead going to close with it. Hopefully you're reading this post because you have, or intend to have, an e-commerce digital channel. If not, you're not doing your customers (and subsequently yourself) any favours. They're busy online (2010/2011 figures2) showing 61% of Australians surveyed had purchased goods/services online:

Remember, strategy first

This was just an overview of what social commerce is, not a recommendation to dive into it :) I'd like you to start thinking about if, and how, it fits in your larger business and marketing strategy. Strategic thinking is still the primary message we'd like you to take away from reading this blog!

Sources: (1) http://assets.omniture.com/en/downloads/datasheets/2510.white_paper.face..., (2) http://www.acma.gov.au/webwr/_assets/main/lib310665/aust_in_digital_econ..., (4) http://www.comscore.com/Press_Events/Presentations_Whitepapers/2011/The_Power_of_Like_How_Brands_Reach_and_Influence_Fans_Through_Social_Media_Marketing,