Social Commerce – The new face of e-commerce
Social commerce is the subset of e-commerce that uses social media to enhance online purchase experience via social interactions and user contributions. It primarily focuses on helping people connect where they buy, and buy where they connect.
Social commerce has emerged as a revolution, if we talk in reference to monetizing social media with e-commerce technology. However, social commerce itself is not new. We have been recommending and promoting brands and products in our social circles through word-of-mouth marketing. It has been a powerful marketing tool since the time our ancestors started the concept of buying and selling. The term ‘social commerce’ was introduced in 2005, which described social commerce as a collection of online collaborative tools to distribute product information and advice in the online channels. To be more specific, social commerce is the blend of social media with e-commerce.
Why social commerce?
According to Gartner Research, by 2015, companies will generate 50% of web sales via their social presence and mobile applications. Booz Allen forecasts that social commerce opportunity will be worth $30 billion by 2015, a 600% increase from the current $5 billion opportunity in 2011. Undoubtedly, there’s a huge growth opportunity for organizations that align social commerce with their social media efforts now.
Organizations also need to understand the basic human psychology – we often look to other when making purchasing decisions and we are deeply influenced by people around us. The web is being rebuilt around people, and people live in networks. There’s an increasing reliance on social networks when consumers make purchase decisions. This shift in online behavior clearly indicates that brands should meet consumers where they spend most of their time online. Therefore, it makes perfect sense to direct your efforts toward using social media to enhance the online purchase experience.
It’s a common trend that every time a new social tool is introduced, most organizations rush in to deploy the solution without having a clear objective and a strategy to achieve that objective. This usually results in a solution that is neither measurable nor manageable. While social commerce can help increase e-commerce sales, one of the key objectives of implementing social commerce would be to dig into other business objectives that can be achieved. Businesses can use social commerce to:
• Make more sales (sales optimization)
• Win new customers (customer acquisition)
• Keep more customers (customer loyalty/ retention)
• Learn about customers (customer insights)
• Manage online reputation (public relations)
• Improve ROI by using social media
Care should be taken to ensure that your business objectives are specific, measurable, achievable, relevant, and timed. It’s even better if you can associate a time-frame with each objective, e.g. short-term, medium-term or long-term objective.
With the diverse range of social commerce solutions available in the market, it can be cumbersome to start out with social commerce. However, a stepwise approach to implement social commerce solution, with clarity of business objectives, can go a long way in creating a huge impact on your e-commerce sales.
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