Embracing Social Commerce (Part 1)

What is social commerce and how does it affect me?

by Spiro - March 2013

Social Commerce stems from the integration of e-commerce and social media in the form of forums, social shopping tools and apps, as well as online ratings and product reviews written by and for one’s peers. Essentially, consumers have shifted the interaction of the in-store shopping experience to that of the online experience.

Much research has been conducted regarding influences in e-commerce, and stats now show what we’ve previously held to be true: people trust the opinion of their friends and peers over digital and traditional advertising. Consumers' expectations are increasing and they are no longer only interested in taking the word and standard sales pitch of a company when buying products or services. They want to know what other consumers (i.e. those who use the product on a regular basis) have to say before they go out and buy it themselves. On the back of an economy that is still crawling out of a global recession, consumers are much more cautious and conscious of their e-commerce options. The more detailed information, reviews, specifications and support there is surrounding a product, the more informed the consumer's decision is and the better the chances are that your product or service is going to be the one that they buy (and, in turn, hopefully rave about online).

It’s all about going back to word-of-mouth, except now it’s been taken to massive & immediate platforms where the potential reach is untold

The principle behind social commerce is quite simple. How often have you sought your friends or peers opinion and/or approval before you buy a high-end product? You’ll probably find it’s more often than you realise. The truth is we are predisposed to seeking the approval and opinion of others before we do something, and now clever marketers are taking this and using it to their advantage, with positive results.

What Are the Consumers Saying and Doing?

  • 23% of Twitter and 25% of Facebook users follow businesses to find special deals, promotions or sales
  • 14% of Twitter users take to the stream to find and share product reviews and opinions
  • Social network users spend on average 1.5X more time online than the average internet user
  • A staggering 83% of online shoppers say that they want to share information about their purchases or would-be purchases
  • In 2008, 83 million users generated online sales reviews, which were read by 116 million users
  • Online social network users are 3X more likely to trust what their peers say over advertising
  • 50% of social network users consider information shared on their networks when making a purchasing decision
  • The highest performing businesses use consumer perceptions in 80% of sales and advertising

What Are Some of the Benefits of Social Commerce?

  • Consumer generated content that links back to your products enhances your search engine ranking and drives more customers and traffic to your site.
  • All comments, ratings, reviews, recommendations and referrals are written by consumers' peers who actually use the products or services on a regular basis. Because people generally trust their peers, they are going to listen out more if they say something is great and worth buying.
  • Because social commerce is integrated on so many different levels and is so highly personalised, it offers companies new ways to engage with consumers more intimately. Consumers want to feel unique and they want to feel like they are being listened to and social commerce provides the perfect platform for this.

So How Does Social Commerce Actually Work?

User profiles, online groups, blogs, forums, photos and videos, how-to-guides, comments, reviews, and recommendations are all critical social applications which can (and are) highly customised and targeted to create a better user experience.

Social commerce has come a long way since it was first coined by Yahoo! in 2005 and while there are some exceptional international campaigns being run on a regular basis by well-known brands, locally the concept is still in its infancy. The general consensus, however, is that this is an industry that is going to explode very soon and rest assured, we’re going to be seeing much more of it.