Social Commerce – Let’s Dig In! (Part 1 of a series)

1 Comment | This entry was posted in Guest Blog Posts

Recently a fellow online marketer mentioned that the ecommerce community is “burnt out” on Social Media.   We’ve seen the webinars and read the books.  We tweet, we post, we have a Facebook page to read messages (from our Moms) and some of us even play Farmville (although few will admit to buying a virtual tractor).

In our work, most of us have been testing programs across Social Media platforms. Some retailers have dedicated Social Media roles.  Some have launched onsite video studios, added YouTube Channels, Twitter campaigns and Blogs.  And after all of the energy spent, few companies can point to a tangible increase in their sales and profits.

We hear from social media experts that customers don’t like to be sold to in the social arena.  They want an authentic, natural conversation, a human dialog.  And while no one would recommend the opposite, many of us humble retailers are a bit perplexed.

These “best practice” approaches are not unleashing sales gains for most companies.  As we speak, most retailers have a 1 to 100 ratio of Facebook Fans to emailable customers (or less).  And the ratio is even smaller for Twitter followers.  At this rate, it is hard to see how the messaging power of these quantities of fans/followers will drive big sales. What number of messages would be required?  What Conversion Rate would be required?

It’s time for us to shift our focus from Social Media to Social Commerce.  ”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,” so sayeth Wikipedia.

So, what is working in Social Commerce?  Groupon and other social promotion concepts are blazing ahead.  However, the focus on deep discounts is a little dismaying to many marketers.  Is it sustainable? Profitable?

Another winner is Customer Reviews, a proven and consistent social commerce tactic.  Amazon seems to be slowly evolving into a social platform of its own leveraging its wealth of reviews and breadth of marketplace partners.  Can reviews go beyond conversion and drive traffic?

Here’s a third!  Many retailers are using Blogs and Video to improve keyword ranking in Natural Search (SEO). When a retailer contributes genuine content, consumers respond, bloggers link, search engines see links and determine that good stuff is there and rankings improve.  Wow, the social web works!

However, I can’t help but be concerned about the speed of the attention shift going on with our customers.  How can retailers manage the shift to Social Media as it cannibalizes time spent using proven commerce channels:  Email, Paid Search, SEO, CSEs, Affiliates, etc.
Will even fewer consumers visit our websites directly in the future?  ”Direct Url Entry” sales are the bedrock of an ecommerce P&L.

So, today’s question is not: What is my social media strategy?  The question is:  How will my brand drive social commerce?  Do you, as Shop.org members, believe this would be a valuable area for added research?  Please share your thoughts in the comments section below!

Peter Leech is a long-standing Shop.org booster, member and content committee contributor.  Find Peter at Ecommerce Consultant and peter.leech@ecommerceconsultant.com.

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One Comment

  1. Posted November 4, 2010 at 4:15 pm | Permalink

    Peter, great summary of the state of social commerce.

    Diving in: I’d trim your list of what’s working a bit. Group buying, IMHO, doesn’t count as social. Not conversational, no use of the social graph (beyond the fact that people share discount offers with each other, which they did before). I defer to your experience on using brand-generated content to drive natural search rankings, but I suspect the effort to pull it off is significant and the results are hit-or-miss and hard to measure.

    Customer reviews are a clear winner. Benefits on many dimension: conversions, insight, traffic (SEO), loyalty, and reduced returns. And all of that within social commerce 1.0 framework: not that conversational, not much use of the social graph. (I’m starting to see more sites provide the ability for shoppers to comment on reviews, which is a step in the 2.0 direction, along with the ability to post reviews to FB and Twitter, tho I suspect those are used very little.)

    Social commerce 2.0 is looking for a killer app which will become one of those core functions that most serious ecommerce sites across a broad range of categories will embrace. Off the top of my head, some of the current qualifiers for that list would include recommendation/personalization/cross-sell tools, catalog search, re-targeting, customer reviews… (what others?) What is the Social equivalent of these widely-used tools going to look like?

    Here’s a proposition: the core of this killer app will be the purchase transaction. Ecommerce businesses have to figure out how to generate more involvement from more of their customer base, and leveraging the transaction database will be the key. I like to say: never miss a chance to turn a buyer into an influencer for a future shopper.

    Looking forward to hearing what others think.

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