The evolution of social commerce

(Image Credit: iStockPhoto/Rawpixel)

 ‘Commerce’ before it was ‘social’?

If you can remember the first retail websites in the mid ‘90s they were pretty boring, nothing more than online versions of printed brochures that took ages to download on your dial-up modem. It wasn’t until companies like Pegasus, eBay and Amazon identified the potential of ecommerce to disintermediate traditional retail, that shopping was forever changed. But that was just ecommerce and didn’t bring much interaction beyond ‘people who bought this also bought that’.

Neither did ‘Web 2.0’, a term popularised by Tim O’Reilly in 2004, itself make ecommerce ‘social’, but just coined a term for a series of things that made the web more ‘social’ like blogs, wikis and video sharing.

It actually took two further developments to make the potential of social commerce become really apparent. The first was the explosion of broadband Internet after the turn of the century, and the second was the launch of the main social networks after 2003, and more particularly their exponential growth after 2005/6.

Quite simply now everyone could access the Internet both at work and at home, and with so many potential customers spending lots of time on social and freely giving valuable personal information, the ability to sell through these channels seemed to be the new nirvana of marketing.

But ten years after you probably first heard the words ‘Web 2.0’, why is it that so few brands and retailers have really implemented full social commerce?

What do we mean by social commerce?

To comment on the current state of social commerce, we need first to cut through the noise and point out what is and what is not social commerce.

Social commerce is a marriage of social and eCommerce that enables you to get your fans and followers shopping by making the whole selling process social. It is not buying ads or sponsored posts and tweets on Facebook or Twitter. That is just old fashioned ‘interruption advertising on a social network’.

Nor is it creating brand awareness using viral competitions and photos with the aim of later driving traffic to your brand’s website. This is just ‘social media marketing’. Importantly there may never be any sale attributable to these social media marketing efforts, whereas with social commerce there is always a sale and ROI can be directly measured.

It is also not customer reviews from services like Revoo, Bazaarvoice and Trip Advisor, as while these can help increase conversion onsite and attract additional natural search traffic, they don’t actually make one buyer refer another for a sale.

Of course, it’s impossible to write an article about social commerce without referring to the much heralded false dawn that was Facebook Commerce. That failed as it was just bolting a catalogue and a store onto a social network and did not make the actual sales process social. In other words, it was not ‘social commerce’.

Social Commerce Today

The ‘Social Commerce Maturity’ research we undertook last year found only a handful of innovators had built a functioning social sales channel. Most brands were focused only on gathering an audience of fans and followers, or were just starting to engage to build a community using tools like Offerpop and Woocommerce. In other words, tools which focus on polls, surveys, competitions and giveaways. As mentioned above, these are not really social commerce tools but are more adapted for social media marketing.

The past year has been marked by a number of announcements of ‘buy buttons’ being added to Facebook, Twitter and now Pinterest. The jury is still out as to how well these work, but unless the selling process has social ‘baked in’ it may be that they will disappoint just like Facebook Commerce.

If you Google ‘referral marketing software’ you will find a host of simple ‘refer a friend’ platforms that you can add to your ecommerce website to offer your customers the chance to earn a discount or some cash by getting a couple of friends or family members to buy. These do incorporate some aspects of social commerce such as incentivising a customer to share a deal where the reward improves based on the number of referred buyers. However, they do not provide the tools an enterprise marketer requires to implement social selling at scale, particularly as these are 1-2-1 rather than 1-2-many and are mostly confined to the ‘thank you’ page after the sale.

In line with the findings of our research, there are only a few full social commerce solutions on the market. I could mention Chirpify, Soldsie and my own Buyapowa as examples.

The Future of Social Commerce

The key to the future of social commerce is access to tools that make it easy to quickly incorporate concepts like ‘co-creation’, ‘dynamic deals’ and ‘gamification’ into any offer. Co-creation is asking your audience what deals they want. Dynamic deals means everyone gets a better deal as more people participate, and gamification means that the people who do the most to make your deal succeed stand a chance of winning something special.

Almost every digital channel we can think of, such as email, paid search or affiliates, has evolved over time to the point where we now have integrated solutions that offer all the tools enterprises need to operate efficiently at scale and output rich and accurate data to enable continual performance improvements. Social commerce is no different, and I predict that with the success of pioneers like EE, Sony, Debenhams and Tesco, together with the availability of ‘end to end’ enterprise level platforms, 2015 will finally see the much prophesised coming of social commerce.

Where do you think the future of social commerce lies? Let us know in the comments.
 
Related Stories

Leave a comment

Alternatively

This will only be used to quickly provide signup information and will not allow us to post to your account or appear on your timeline.