Technology has turned shopping into an “in your pajamas” experience or something you can do on the bus on your morning commute. We spend more time shopping at virtual stores than we do in one we can walk into. I can buy my groceries, most of the things I wear and pretty much everything I read without leaving my desk.
Brands and merchants have now discovered that they need to become multi-channel in how they sell to consumers. And not just that, they have to be concerned with multi-screen continuity, as well. That is, the experience on your phone, tablet or laptop all need to have similar feel and functionality. You can’t rely on foot traffic alone for all of your revenue. You need to capture and engage with the consumer or prospect in as many venues as possible. Social media has allowed for the merchant to engage, not just with current customers, but future ones, as well.
Talking about people talking about items
Word of mouth is how we acquired our preferences – “this is what we had in the house growing up” or “that is what my friends bought.” That is pinnacle for a brand. The recommendation on a purchase from someone whose opinion you trust plays a very large part in our buying decisions. But those word of mouth endorsements can be easier thanks to Twitter, Pinterest, Facebook and many other social media sites. In the past, you had to contact a friend for a suggestion. Now, you can simply check their Facebook page or quickly crowdsource out a question. Within seconds, you are inundated with suggestions.
According to Nielsen, 92% of consumers trust recommendations from friends and family over all other forms of advertising. So what does this have to do with social commerce? It’s actually pretty straightforward: A brand or merchant can’t rely on organic conversations to be the only tool for marketing its products. They need to utilize tools to create proactive campaigns that help push the word out. And that is exactly what social commerce is all about.
Defining how to be social and sociable
So, what is social commerce? Marketing consultant Heidi Cohen says it “is the evolution and maturation of social media meets shopping.” I think she’s right on target. It is using social media to create word of mouth for your products.
According to Mashable, several distinct types of social commerce exist:
- Peer-to-peer sales platforms (Shopify, Etsy, Amazon Marketplace): Plugins that integrate ecommerce solutions with inventory management and payment processing.
- Social network-driven sales (Facebook, Pinterest, Twitter): Sales driven by referrals from established social networks, or take place on the networks themselves (i.e., through a “shop” tab on Facebook).
- Group buying (Groupon, LivingSocial). Products and services offered at a reduced rate if enough buyers agree to make the purchase.
- Peer recommendations (Amazon, Yelp, JustBoughtIt): Sites that aggregate product or service reviews, recommend products based on others’ purchasing history (i.e. “Others who bought item x also bought item y,” as seen on Amazon), and/or reward individuals for sharing products and purchases with friends through social networks.
- User-curated shopping (The Fancy, Lyst, Svpply): Shopping-focused sites where users create and share lists of products and services for others to shop from.
- Participatory commerce (Threadless, Kickstarter, CutOnYourBias): Consumers become involved directly in the production process through voting, funding and collaboratively designing products.
- Social shopping (Motilo, Fashism, GoTryItOn). Sites that attempt to replicate shopping offline with friends by including chat and forum features for exchanging advice and opinions.
The key to us is social network-driven sales. By including social media as a core emphasis of your marketing and product promotion strategy, you can see a greater ROI. You may think that you are already doing this because you include a link to your site on Facebook or occasionally tweet a product. In theory, this is a great introduction to social commerce. But there’s a lot you’re not seeing when you do that: inventory management, analytics of the clicks and even ROI calculators.
The issue with social network-driven sales is that if you go the route of a tab store you then have to create ways to drive users to that store which, really, defeats the purpose of having the tab store in the first place. You could just as easily send the consumer to your website. Now, you can add all of these tracking pixels and such to measure the engagement and conversions and then retarget the consumer at a later time, but is that really what social network-driven sales has come down to? Why can’t there be another way where you can reach the consumers where they are and engage with them there? Give them the means to make that purchase decision without redirecting them or having them have to go to a tab or see another site. Nothing kills a sale like additional friction in making a purchase. Every additional step is one more place to lose a customer. This, I believe, is where social network driven sales needs to go instead of where it is now — just about collecting likes and shares but not sales. Real ROI is where you see the post actually generate revenue without all of that redirecting and retargeting in hopes of getting a purchase made.
Social commerce is new and everyone is going to sample many of the tools I’ve listed above, as well they should. However, after trying all of them don’t forget your goal: driving sales.
Would love to hear your feedback and hear how you are using social commerce and the tools and practices that are working for you!