The 7 Characteristics of Social Commerce

As the world shifts to social, commerce is shifting as well. It used to be that one could open a product or a service store online, prepare a descriptive sales page, add a shopping cart and begin selling successfully. With the shift to social, traditional e-commerce is fast fading as the preferred mode in which people shop online. What is increasingly becoming necessary is that e-commerce is social. Social E-commerce or Social Commerce, as is increasingly becoming known as, is where e-commerce meets social.

According to Wikipedia, Social commerce is a subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services. This definition could be even redefined as that Social Commerce is not just a subset of electronic commerce, but rather the preferred method, and very likely the only productive way of future electronic commerce.

So what exactly does Social Commerce mean? There are several characteristics that shape social e-commerce. Sellers desiring to implement social commerce into their trading could look at implementing the following themselves into their own sites, or could leverage social hubs or social marketplaces and begin trading their products and services.

The following characteristics define Social Commerce:

1. As against traditional e-commerce, in the world of Social Commerce, buyers make their decisions to buy or try a product or service, not based just on seller description, but rather based on social reviews by other users

2. Buyers of products and services actively participate in providing feedback and recommendations to friends and others in the community. As such, it becomes very important that the seller closely watches feedback and correct any flaws rapidly so as to cause a change in any negative feedback

3. Users of a Social Hub actively share what they like (and not like), mostly with just a click of the mouse, across various social bookmark locations and social networks. These include Twitter, Facebook, Delicious, Stumble Upon, Delicious etc. Social Commerce is Viral Commerce

4. Increasingly, Social Commerce is also tuned with Mobile Commerce. As such, offers are shared with Mobile QR codes and RSS or Atom feeds making it a snap to share offers, likes and dislikes

5. The user is presented not just with the offer from one Seller, but often with related offers from other Sellers, so the potential Buyer can make a conscious choice looking not just at one offer, but a portfolio of all available offers, complete with reviews, recommendations and ratings.

6. Pictures and Videos are an inherent part of the offer, thus making the process of showcasing what the offer is, complete not just with text, but with images and videos. Such images and videos are shared across image networks and video networks, such as YouTube, thus facilitating additional viral distribution with ease

7. Everything a potential buyer needs to know, i.e. what the offer is, how long the offer will take to deliver, what exactly is needed from the buyer in case any, what payment methods are allowed, what will be delivered etc. is all evident within the description. The Buyer typically need not go anywhere else or click any other links to get a full picture to make a conscious decision.

Applications That Drive The Social Commerce Experience

Social commerce is an emerging category of e-commerce that integrates all the best practices we’ve accumulated from our experiences with social media and social networks. Introduced by Yahoo! in November 2005, the term initially referred to features in their online store that encouraged interaction and collaboration among users. These features included shared pick lists, user ratings and user-generated reviews, and advice. The explosive growth of social networking sites opened the doors for exploring e-commerce prospects targeting the huge user bases of such sites as Facebook, MySpace and Twitter.

A study made by the McKinsey group in 2009 reports that for the social commerce providers — the online shops, e-commerce providers and the brands with online presence — the benefits include increased speed of access to knowledge and reduced communication costs. For buyers, these benefits translate to increased product awareness and customer satisfaction.

The practice of social commerce has since expanded to include tools and applications that support social interaction and user contributions to assist network members as they buy and sell products and services online. These include the following applications, found in many online stores and e-commerce sites.

Ask-Your-Network tools provides recommendations and opinions from other shoppers, or those who have knowledge about the product or provider. This activity is sometimes referred to as “friendsourcing.” Examples of this can be seen in the shopping sites of Mattel and Jansport.

Deal Feeds let people share information and news with their friends about deals from brands they patronize or like. Dell, Amazon and Carrefour are all big on deal feeds, which drive a big chunk of their day to day e-commerce activities.

News Feeds are like Deal Feeds; they’re intended to alert people with news about their favorite brands or stores, or to let them know if a sale is on the horizon. This news is shared and spread using social media news syndication tools (for example, Twitter, YouTube, Facebook, and RSS). BestBuy, North Face and Nokia’s WOMWorld all use news feeds to spread the word on latest offers.

Pick Lists, the tool that started it all on Yahoo, are of tremendous value in social shopping portals. They let shoppers follow other people, and be followed in return by the shoppers they trust. Pick lists are a major part of the Amazon experience. They are also put to good use by BestBuy and Kaboodle.

Referral Programs let registered users spread membership by inviting their friends through affiliate networks. Private shopping event portals commonly use this tool. Amazon Affiliates, Gilt and VanRosen are among prominent brands that rely on referral programs to drive membership and increase their user base.

Share-With-Your-Network tools allow shoppers to share their shopping experiences and bargain finds with other members of their social circle. Kaboodle and StyleFeeder use this effectively. Examples of this are on the shopping sites of Charlotte Russe, Mattel and Jansport.

Shop Together tools let shoppers browse online stores together, allowing them to influence each other’s buying decisions.

Social Network Storefronts are shopping portals hosted by social networks like Facebook and MySpace. Levi’s has a very attractive Facebook store.

Whether just a passing fad or a true evolution in retail commerce, social commerce has tapped into opportunities and has set the direction for future developments in retail trade and e-commerce.

The 4 Stages to ‘Line of Attack’ For Social Commerce

When Facebook was first launched in February 2004, its use was based around a social universe where you could keep your friends close and your enemies closer. Now, in 2010 social networking sites like Facebook have now been catapulted into the world of Commerce.

Those who are fortunate enough to own a computer will also have a connection to the popular networking sites. The industry now understands that to be successful; they must take their product to where their consumer is most likely to see it – we all know where that is! In the recent months, time and effort has gone into working out how to market and launch social content and resources into offline commerce but most importantly e-commerce. When selling a product through a website like Twitter or Facebook, the most important thing is to come up with a strategy that will enable you to generate a sale at the point of social;

1. Be specific in your target audience by using fan pages to bring them into your product.
2. Be unique with the product you are selling, make sure that it is attractive to your target audience without altering the price.
3. Use adverts, special offers, questionnaires etc. to raise awareness and to get your specific clientele interested in your product.
4. Use a different strategy of marketing to calculate ROI. (Something unseen and unique).

The best way to sell a product through a social networking site is to keep it within that social bubble where the buying, selling and transaction of that product will stay within the walls of that social commerce. Just recently, a company called Bing has just teamed up with Facebook to make search social;

“Starting today, Bing is integrating data from your friends and social network into search results. This could include information on “likes”, reviews, photos and links from your friends into your search experience.”

The Bing/Facebook Alliance – Oct 15, 2010

The question on all of our minds is; ‘Will users actually purchase a product through a social networking site?’

Only time will tell…