An Introduction to Social Commerce
Music Producer David Guetta, recently released an album through Facebook. With 24 million fans on his Facebook page, Guetta utilised the ability to use Social Platforms like Facebook to sell directly to the people whom want to buy his product â his biggest fans. The fans that spent the time to âlikeâ his page.
This is the start of the Social Commerce age.
But what is Social Commerce? Why should businesses take note of Social Commerce? Who is currently using Social Commerce and utilising tools like the Facebook Store (FB-Store)? And where is Social Commerce heading in the future?
Social Commerce is a new and emerging field that is the next step of evolution in Social Media. Whilst businesses and customers have now been thrown together at high velocity in what we term today as âSocial Mediaâ this engagement will more than likely not be enough in the near future. And its businesses whom are driving this change.
As economies contract, businesses are looking for the most efficient and effective way to reach their customers utilising free media tools, such as Social Networking and Microblogging sites. Whilst businesses today are starting to respond to the need to be âwere the customer isâ they have still found it difficult to monetise this presence in Social Media.
A question I am nearly always asked when speaking to businesses about Social Media is:
âHow can we make money from this?â or the more direct âShow me the ROI?â
This burning desire to capture every dollar out of every connection to the business is the holy grail of business revenue dreams â and Social Media the catalyst!
Enter stage right, Social Commerce.
Whilst many old school business owners would shudder at the thought of transacting over social networks or social media sites, this is the direction we are headed in.
Social Commerce moves businesses away from traditional ROI models of financials into 4 quadrants of Social ROI: Financials (of course); Brand Equity; Online Reputation Management and Digital Assets.
Social Commerce is thus then reflected through businesses transacting through platforms like Facebook (Social Networking Sites) and Mobile devices.
Social Commerce already exists, and several large companies like Coca-Cola, Startbucks and Disney are already transacting through their Facebook account. That is they are directly selling on Facebook.
Want more proof? Here are some statistics on Facebook Commerce:
Number of Diapers P&G sold on its FB-Store in under an hour: 1,000
Number of retailers who have opened up a FB-Store: 50,000
Starbucks customers using their e-commerce-enabled FB CRM loyalty program: 1M+
Customer using Wal-Martâs group-buy FB app on day of launch: 5,000+
FB-Store conversion rates: 2% - 4%, which is on par with most web-stores: 3% - 4%
Click through rates on Facebook Walls: 6.5%
And it doesnât end there. With the web now becoming the MobileWeb, we are all more connected to our Social Media platforms through our smartphones. The introduction of NFCs and the Mobile Wallet will mean that businesses and consumers now have a way to transact through the MobileWeb. And Social Media will lie at the heart of this.
So what should we expect to see in the next few years in Social Commerce?
More than likely it will branch into two types: The first will be based on consumer to consumer recommendations through Social Media â where connected friends on Social Networks will drive sales based on experience, preferred brands and the way businesses behave in Social Media. The Second will be based on special offers, loyalty and incentive programs. The most certain prediction is that both these scenarios will be played out on the mobile platform utilising mobile wallet and Smartphone technology.
To conclude, Social Commerce can be summarised in a great quote by Sumeet Jain, Principle of CMEA Capital:
âItâs a matter of time â within the next five years or so â before more business will be done on Facebook than Amazonâ
Now businesses, I ask you: âWhat will be the impact on your ROI if you donât get involved in Social Media Now?â
Next week, we look at an Introduction to Social Monitoring
As always, Share + Enjoy!
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