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What Social Commerce Means For The Future of E-Commerce

by Chris Dalton | 05.28.14

“Social commerce” has become something of a buzzword in marketing circles – it offers the promise of a whole new arena of possible conversion points that traditional e-commerce strategies don’t target. Within the all encompassing world of e-commerce (which comprises of any trading of products or services over the Internet), social commerce involves using social media platforms, social interaction, and a collaborative purchasing process.  
 
As we’ve written about before in the “Product Decision Spiral”, the traditional sales funnel model is dead. No longer can companies rely on static messaging to reach their consumer – instead, the path to making a purchase decision involves a multitude of touch points along the way to the decision; some touch points from the brand, others by fellow consumers in the form of reviews and recommendations. As opposed to one-way communication from brands, loyalty to brands is now derived from a two-way conversation.
 

Social shopping
 
Social shopping is a subsection of social commerce in which the shopping experience is largely guided by friends and peers. The term is used to describe an online experience that mimics those found in physical brick and mortar stores, and the concept is a large part of social commerce as a whole. The value derived from social commerce is based on the critical component of social interaction – and social shopping is exactly that. Online shopping communities have arisen that share and collect information about products, prices and deals to provide the best results and customer satisfaction for everyone. Additionally, devices such as recommendation engines (see – “Recommendations for you” section on Amazon) that is built out of data from other shoppers who have grouped together certain types of purchases. Like-minded communities are built out of these types of shopping experiences.
 
Sites such as Wanelo are a great example of social commerce in action – products are shared with others in the network and voted up to see what is most popular. Shoppers can save lists of their products, and meet others interested in the same things.
 
An added benefit of socially integrated platforms like this is that it allows brands and retailers to reach the customer directly without selling their products to multiple vendors and dilute the brand. Instead, social outlets online allow both small and large companies to connect directly with their customers.
 
 
How social commerce is good for shoppers
 
According to research from Gartner, 74% of consumers rely on social network to guide their purchases. As interaction becomes an essential and expected component of an online shopping experience, the brands that will survive will be those that integrate social commerce technologies into their strategy. Interaction allows for better understanding of products, deals, and services.
 

How social commerce is good for brands
 
Brands who make the most of social interaction get the benefit of instant user feedback: by building a community around their fans, they can gather product reviews and critiques and craft messaging around what their fans want.
 
Social media makes it easy for consumers to favorite, like, and follow their favorite brands – and now more than ever, shoppers are aligning themselves with brands they love and making their associations known. Brands can build loyalty with their most dedicated shoppers, and using social tools, find new ways to place product messaging and develop new touch points with consumers.
 
Social commerce elevates e-commerce to be more than a cut and dry transaction. It envelops the shopper in an immersive experience that provides a better purchase process with greater knowledge and choice, and ultimately makes for more satisfied customers who are sure they’ve chosen the right product. It’s not a one-size-fits-all experience that leads to a purchase, but rather a collection of evolving experiences that pushes the consumer to convert.




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