Introduction
Social commerce is a subset or derivative of electronic commerce (e-commerce). Social commerce combines three key elements, social media, social interactions and users that contribute to trade of goods and services. Apparently, social commerce has severally been view as a trend, more of a phenomenon, whose time has subsequently come, an advancement that has risen into prominence upon the contemporary technological advancements.
According to marketing expert Heidi Cohen (2011), social commerce is a product of the union of social media and shopping. Cohen explains that with the number of customers already participating in online purchases, marketing professionals are keen on keeping the infrastructure for social commerce to evolving to reach optimum structure and mass. Currently, Cohen finds the streamlining and facilitation of social commerce through smart phone technology and social media platforms but it is apparent that it is just the tip of the iceberg and things are only going to get better for the consumers and bigger for business. Her article defines what social commerce is according to various experts.
According to Wikipedia (2013), the term “social commerce” was introduced by online web resource Yahoo! in November of 2005. Yahoo! used the term “social commerce” to describe the collaboration between online shopping tools (such as user-ratings and shared product listings) and general online product content. Soon thereafter, the term gained a following. Fairway Market, an online shopping guide describes “social commerce” as the process by which consumers that have the same interests and needs acts collectively. These consumers engage in conversations that produce product and service recommendations on a peer-to-peer basis. The sharing of interest is the common feature of this collective body.
When there is a marriage between the collective consciousness of consumers and the utilization of online tools that tie up with products and services, the tendency is the appreciation of brands from “online experts”. A good example is the purchase of products from an online retailer based on “expert reviews”. The reviews drive both the purchase of recognized products and newly discovered products. Because of the breadth and depth of reach of the current social media platforms and the increasing access and connectivity afforded from the improvement in technology, retailers have naturally turned to the use of social media for the enhancement of customer shopping experience.
Social commerce from a business perspective is clearly a strength that can be leveraged. According to David Berkowitz (2013) of the internet marketing resource 360i, business uses social commercial to aid in influencing the behaviour of consumers. When shopping online, business establishments try to aid or influence shoppers by providing product descriptions, transaction assistance, even aid for consumers that are wary of purchases through the creative use of promos, among other marketing tools. Business utilizes the power of social commerce to increase the volume of their transactions. The capability of using social commerce lies of course, on the strategy that the business is following. Whatever strategy a business establishment takes, it recognizes the fact that social media can collect a great number of consumers and potential clients together that is very difficult to do physically. Heidi Cohen summarizes the use of social commerce for business. These are:
- Social commerce affect how products are purchased
- Social commerce provides cost-effective, brand awareness for businesses
- Social commerce expands the customer base of products and services
- Social commerce helps in product discovery or in the creation of awareness
- Social commerce helps in the creation of media content
- Social commerce promotes the use of peer recommendations
- Social commerce promotes group buying opportunities
- Social commerce links physical stores to online stores
Social commerce was first developed by David Beisel, an officer of NextView which is a company that provides seed capital to internet start-ups. The term social commerce was later defined Steve Rubel a public relations officer. Biesel defines social commerce as advertisement-type of information on websites that are user generated. Instead of companies generating the information, the customers are the ones that provide the information which are then utilized by other prospective customers. In addition, Rubel describes it similarly saying that social commerce is in fact a collaborative effort based around online tools. Customers that utilize these tools also utilize the information provided by individuals that habituate these websites and are keenly familiar with goods, services and transactions online. With the help of popular social networks these types of information spread almost instantaneously, reaching demographics that were virtually unreached by traditional forms of media.
Strategies for success in Social Commerce
There are various strategies that are known to rightly contribute to success of any social commerce. With the subsequent introduction and popularity of social media, many organizations or individuals have engaged in such sites to facilitate progress of their businesses (Hartley, 2010). There are many resources that offer insight on various strategies for social commerce success, some of them offering generic strategies while others offer more detailed strategies using Facebook as the social commerce platform of choice.
The strategies for social commerce must be grounded on rising trends. According to the U.S. Department of Commerce customers are purchasing more from online retailers with these retailers making about $57 billion in online sales for just the 3rd quarter of 2012 (Cunningham, 2013). Experts believe that by 2015, social commerce will generate revenues amounting to US$ 30 billion per year.
It is very interesting to note that according to Pennsylvania-based AWeber, a marketing firm, that:
- About 25% of small businesses utilize at least four hours per week for email marketing
- About 27% of small businesses utilize at least four hours per week on Facebook marketing
- About 34% of small businesses utilize their own website for marketing their products and services
- About 30% of small businesses utilize at least four hours per week using blogs
The most interesting factoid according to the research group, about 88% of these businesses have their CEO working on the marketing functions of their companies. This could be explained by the fact that the owner of a small company owns not just the company but the vision and responsibility for its growth and survival. Hence the development of social commerce is naturally going to be a function that the CEO will do.
The capability of social commerce to level the playing field for customer exposure and reach regardless of company size or experience is great news for business owners. Thus it is very important that strategies for effective social commerce are developed by businesses regardless of their size.
The first strategy is making sure that, the organization or individual engaging in social commerce has the necessary social commerce applications. Social commerce relies on various applications to make the actual discovery, review and purchase of a product easier for the customer. A good example of an online application that does so is Chirpify. Chirpify is an application that works on the social network Twitter. This application turns a person’s tweets (or short messages on Twitter) into actual business transactions. It is a very straightforward, easy process that enables customers and businesses to buy, sell, donate, and review items of interest. The application Chirpify, easily enhances the customer’s shopping experience in a clear platform that is cost and business-process effective.
Secondly, curating a collection of the best merchandise and subsequently displaying them on the respective website or social network to lure potential customers is also equally important (Clapperton, 2012). The chief idea at this point is, to make the products on sale visually appealing. Ultimately, turning social networking page into storefront is also essential in propelling progress of social commerce (Mohapatr, 2012). It is important to understand that while storefront social is not free, it is quite social effective, and in most cases pricing is based primarily on the products in the respective storefront.
Third is to maximize the use of Facebook. The success of using Facebook as an online platform for social commerce has gained massive success because of the relatively uncomplicated way of setting up the system. Oracle provides several insightful strategies for utilizing Facebook for social commerce.
- Determine clear business goals
According to Oracle (2013), businesses must determine their business goals clearly. These goals will drive the strategy for social commerce including the strategy they will have to employ when using Facebook. Not all organizations have the same goals and therefore it is important that these organizations are able to integrate how their Facebook strategy with their overall business strategy.
- Develop a Facebook strategy and an off-Facebook strategy
The second strategy is to ensure that exposure is maximized. This means that businesses cannot be over reliant on one form of commercial platform for pushing their business goals. A presence on Facebook must therefore be complemented with internet presence outside Facebook, which is usually the company’s own website, blog or other form of online marketing platform. Coupling the strategy will enable the company to utilize the data that they will be able to mine from Facebook insight, into the creation of their own company website that would then deliver the messages about their products and services across to their target clients in a clearer, more concise manner. Facebook data is composed of Facebook Insight, an online dashboard of information collected by Facebook and Open Graph which ties customer activities with other activities outside Facebook.
- Utilize the information effectively
The value of information when not used meaningfully is zero. For companies to gain from the new set of information derived from Facebook, it is important that the business strategies are then evaluated, modified and redeployed to further enhance the shopping experience of customers which translate ultimately to business success. The value of the data provided by Facebook keeps businesses keen on understanding new and developing trends as well as market segments that were once undiscovered. It is important that these be recognized by businesses as they emerge.
- Be social
Businesses must embrace the culture of social media. This means that businesses should put people and customers first before their content. The center of the shopping experience must be the shopper and therefore flooding the shopper with too much impersonal information will not yield the right results. One way of making the experience customer-centric is to enable the customer to review, share and like the information quickly. Secondly, enabling the customer to reach out to his network of friends makes it easier for the information the customer has provided to travel vast and activate others having similar interests.
- Maintain control
The pace of development of technology and the continuously evolving nature of social commerce necessitates that businesses maintain a degree of control and responsiveness over their data and their strategies. This means that as a strategy, social commerce should not be delegated as a routine function but rather as an interaction with customers on an almost real-time basis.
Conclusion
It is undeniable that social commerce is currently the biggest business trend. It is important that businesses employ effective strategies to harness social commerce but it is most important to recognize that it can only be done if businesses are rightly and well-coordinated. This is quite essential since all resources at individual’s or organizational behest to subsequently interact as well as engage directly with the target markets or audiences. The strategies presented herewith may help business establishments to gain access and utilize derived information to profit from social media that promote social commerce. By combining the right strategy with the right technology, small businesses will be able to meet customer needs and expectations in a package that is easy, personalized and convenient.
References
Berkowitz, D. (2013). Creative Storytellers & Analytical Thinkers, Powered By Curiosity. Retrieved from http://www.360i.com/
Clapperton, G. (2012). This is Social Commerce: Turning Social Media into Sales. Hoboken: John Wiley & Sons.
Cohen, H. (2011). What is Social Media? Retrieved from http://heidicohen.com/what-is-social-commerc/
Cunningham, T. (2013). Three Strategies to Succeed in Social Commerce. The Miami Herald. Retrieved from http://www.miamiherald.com/2013/02/03/3215449/three-strategies-to-succeed-in.html
Hartley, D. E. (2010). 10 steps to successful social networking for business. Alexandria, VA: ASTD Press.
Mohapatra, S. (2012). E-commerce Strategy: Text and Cases. New York: Springer.
Marsden, P. (2010). Social Commerce (english): Monetizing Social Media. nchen GRIN Verlag GmbH
Oracle (2013). Social Commerce Success Channels. Retrieved from http://www.oracle.com/us/products/applications/social-commerce-success-channels-1504992.pdf
