Social commerce is a new, expanding strategy for e-commerce sites - and it’s only gaining ground. First coined in 2005 by Yahoo as a way to measure product interest and metrics from their customer base, social commerce has evolved to a more defined set of characteristics over the years. But what exactly is it?
It is important to be able to differentiate the two kinds of social commerce: One occurs on the e-commerce site itself, usually on a platform managed by the company. Whereas the other, offsite social commerce, occurs on social media sites and blogs, often outside of the control of the e-commerce company concerned.
Either place has its own ways of engaging in social commerce, but their advantages (outlined below) are quite similar:Community: The ability to correctly gauge your target audience’s social mood and expectations of your product due to them being in one collective group.
Social proof: The evidence to show that people like your product through their own social channels.
Authority and engagement: Indicates if your product resonates and engages your target audience in both quality and customer satisfaction.
Social commerce is expected to rapidly develop in the coming years as the industry adapts to new technology and social trends. For example, the trends that have characterized social commerce in 2015 includes its move to mobile platforms, the emergence of pay-to-play social world, generation of social media content, and many more. These evolving trends have shaped the buyer’s market - and also, leveled the social commerce playing field.
The following sites provide excellent examples in adapting to these trends, as well as setting up trends of their own, providing great lessons for serious players looking to raise their game.
Great social commerce sites and their business applications:
Pinterest is arguably one of the most popular social commerce sites out there. With sales of Pinterest stores being boosted as high as 30 percent within months of the release of buyable pins, the Pinterest market is primarily driven by the peer to peer sales model, where other Pinterest users can buy and sell products to each other.
The advantage of this application is that it not only gives your users a bigger sense of autonomy on your e-commerce platform, but also encourages social sharing and culture development for your brand.
With more and more brand-driven communities being cultivated, social shopping is becoming more common among the increasingly interconnected social audiences. It’s no surprise that 71% percent of consumers change their mind about brands if they see a favorable review of it in their social media channels. Social shopping sites such as Shopee encourages a group element, allowing your brand to grow organically and establish a loyal audience base that can promote and review your products with consistency.
Other sites are engaging in a more personalized experience for their users. Sites such as Spotify and Lyst are examples of platforms that use peer recommendation and user-curated content to drive their products and user acquisition. This approach lets your users in on your process, allowing them to become participants in your e-commerce operations rather than being just a beneficiary. It establishes brand trust, customer engagement, and drives an organic area for innovation and growth based on your customers.
For platforms like Soldsie, the social aspect of social commerce lends itself well to social network-driven sales, as well as group buying. The philosophy behind this business application is simple: with the rise of the demographics that use social media, it has become extremely easy to convert audiences and generate leads in social media due to the inherent group dynamic that they possess.
Soldsie uses this model to promote products sold through Facebook and Instagram ads, thus increasing sales by integrating itself into your audience’s personal feeds and riding on social media group dynamics.
Another model that’s starting to take off is participatory commerce, where your customers not only participate and contribute to the process, but also make the entire business possible. It puts the manufacturing and process influence directly in the hands of the consumers and rewards them for their contributions. Kickstarter has amassed over 2 billion dollars using this model, with over 3 million repeating backers. Products that are crowdfunded save on costs, as well as start out with a stronger and more loyal customer base.
Other benefits of investing in social commerce
Another good reason to invest in social commerce is that you can use it as a metric for measuring the effectiveness of your e-commerce marketing. You can measure the return on investment for your partners or backers through the effects your efforts make on social commerce through social media.
More often than not, it will drive sales by a considerable degree, allowing you to accurately predict growth and future demand. It can also allow you to gauge the critical reception to your product or service. With most reviews now found through social media sites, listening to reviews and comments on your brand on social media allows for a much more responsive brand engagement process, while providing a future opportunity to improve and nurture customer relations.
Finally, a strong social commerce-driven e-commerce business can drastically widen its reach through social media channels, especially if the strategy incorporates organic and viral growth. Aside from being used as a platform to already promote existing goods and services, social media is also becoming the premier choice to promote and spread new content while generating sales. Social commerce is looking to be an extremely effective way to reach an audience today that is largely social media-oriented.
Aside from personalizing the e-commerce experience, social commerce allows for organic marketing and a stronger brand presence in brand engagements. Forecasts predict that 2016 is the year for social commerce - and it’s only going to get bigger from there.