The Marketing Bureau

Non-Starter? Or Your Next Step?
Posted by Neil Davey
First Published on www.mycustomer.com  

A growing number of brands are utilising social platforms for commerce, but its appeal appears limited. So should you be taking social commerce seriously? 

When cider brand Magners launched an app on their Facebook Page recently, where users could buy newly-launched Magners flavours, the company became the latest in a growing list of organisations to support social commerce.
 
Indeed, the selling of products directly through social media channels has started to gather momentum as the likes of Coca-Cola and JD Sports  have explored the potential of so-called ‘f-commerce’.
 
But with a recent report by Havas Media Social revealing that 89% of people haven't bought anything through Facebook, and only 25% saying they would even if the offer was exclusive, is social commerce really going to be a viable alternative to ecommerce? Should your business start taking social commerce seriously or not?
 
“While Facebook is obviously popular, it hasn’t proved particularly successful as a retail destination,” states Rupert Staines, managing director of RadiumOne UK. “You have to remember that people rarely go on Facebook to shop. To many it’s very much a communication tool for sharing and keeping in contact with friends and family.”
 
This sentiment is echoed by Simon Quance of Equi=Media. “Shopping online is either a destination experience (I am online for a specific product from a specific retailer) or a browsing experience (reading and researching a subject that might lead me to a purchase, usually for a bargain price).  Facebook plays an important role in providing trusted reviews in this process but it’s still primarily a play or relaxation space online, the coffee shop on the high street, not the department store,” he explains.
 
An open and shut case?
 
So, it would seem that on the face of it there is little real potential for brands as the all-important consumers aren’t interested in social platforms for commerce. Looks like this is an open and shut case.
 
But wait, we shouldn’t write it off just yet according to Justin Bowser, managing director of online business at HTK, because despite the present tentative state of play in social commerce, there is a strong connection between social influence and our purchasing decisions that naturally exists. And this predisposition points to a perfect fit between social media and commerce over the longer term.
 
“Whether it’s your mum calling to tell you that there’s a sale on at your local clothes store, or in the case of today, your friend tweeting that he just bought a brand new pair of jeans in the online sale, social recommendation is and has always been a powerful thing,” says Bowser. “So much so that eConsultancy once posited that 90% of purchases are subject to some sort of social influence – a figure which, in terms of the potential for social commerce, represents a very large market and indicator for success.”
 
And while we may have a natural predisposition towards social commerce, it could also even have certain advantages for consumers and companies over traditional ecommerce. For instance:
 
A personalised shopping experience – “By incorporating and having access to your consumer’s social graph, retailers can look to promote and offer purchases that are 100% targeted to both their individual and peer interests,” suggests Bowser. “Therefore, exposing the consumer to not only their own product interests (Based on purchase history, interests, likes, shares, etc) but also uncovering and targeting new products that they perhaps wouldn’t have previously come across.”

Feeling part of a community - Not only does social commerce offer the opportunity for consumers to engage with online retailers, it also enables direct contact with other consumers. “It is widely recognised that consumers like helping and advising others with their purchasing decisions – customer review sites offering key evidence for this,” adds Bowser. “Therefore, for social commerce to be successful, it’s imperative that businesses encourage this kind of ‘community’ feel, allowing users to firstly uncover the products and then share their discovery with others.”

A trusted environment – “For customers, social commerce is primarily about trust, although exclusive benefits, value and convenience do play a part too,” says Quance. “Trust is especially important where the goods and services can be researched extensively – but can’t be touched and felt. With technology providing immersive shopping environments, great usability making the experience seamless from content to checkout and seemingly irresistible offers and benefits available too, ecommerce is a ‘many-trick’ pony, but inherently it doesn’t have the one trick that increasingly really matters.”

Real-time feedback – “Word of mouth recommendations have always been an influential factor in individual purchasing decisions, however, with social commerce, retailers are now able to scale and manage consumer feedback in a matter of minutes,” highlights Bowser. “And with real-time access to consumer behaviour at their fingertips, brands can react accordingly by ensuring that the products on offer are the most relevant for their consumer base.”
 
Certainly Facebook seems to believe strongly in social commerce and is gearing up for a bigger push into social commerce. In addition to rumours suggesting it will give Facebook Credits more prominence in the future, it has also just tied up a deal with eBay to allow the auction site’s developer community to build social commerce applications on Facebook that allow users to go beyond merely ‘liking’ products to soon be able to ‘buy’, ‘own’, ‘want’, ‘recommend’ or ‘review’ products and share them with friends and family.
 
“Their faith in social commerce is well founded,” notes Quance. “Social shopping platforms like Living Social and Groupon have proved very popular with consumers and peer recommendation is the real world commerce gold dust in social media. Although they haven’t got the approach quite right yet, Facebook is the biggest global social media player, so it stands to reason they feel they have a big opportunity.”
 
Fine tuning required
 
But all the faith in the world won’t help Facebook if the proposition isn’t in order. And social commerce still needs some fine tuning if it is to become a channel to be taken seriously by companies and consumers alike, says Quance.
 
“Irrespective of people’s affiliations to a brand or business on Facebook the network is primarily the glue for people’s social lives and   an ever expanding commercialisation of this space will be counterproductive unless it is executed very carefully,” he highlights. “Whilst the recent Facebook changes are designed to increase engagement and browsing time I think there will always be structural issues with mainstream mass commerce via Facebook until they can turn it into a portal, or a walled social garden that users are happy to never leave. This could happen if brands, or Facebook can offer really significant benefits to purchase on the network rather than offsite, but someone will have to subsidise that approach.
 
“I also think that despite the plethora of small and corporate ecommerce environments available through Facebook, online shopping would need to be a ubiquitous experience offered by most mainstream retailers with a presence on the network before users routinely searched in Facebook first for shopping environments rather than the web.”
 
And Quance also believes that other impediments exist in the form of clunky ecommerce integrations (such as apps permissions, which he says are “always a barrier to entry”) and the perennial security and privacy worry about the network.
 
But despite these concerns, Quance is still amongst those that believe that social commerce has an “immense future”, not least because “in our very time stretched society, technology and convenience will undoubtedly remain the prime motivators for people to adopt seamless pay technologies like Facebook credits”.
 
Steve Richards, MD of specialist social media agency Yomego, is similarly optimistic about the future of social commerce – provided it negotiates the pitfalls before it. “Social commerce is based on human behaviour,” he says. “We ask our friends for their opinion on what we buy, and we share what we’ve bought on Facebook. Involving them in the buying process through social commerce is a natural extension of this behaviour but it’ll need to be handled carefully by Facebook as an anti-commercialisation backlash is hiding behind every wrong turn.”
 
For Bowser, social commerce is in its nascent stages, but ultimately represents a “natural” step for retailers.
 
“Consumer buying behaviours have irrevocably changed over the past decade due to the emergence of fast and accurate web search; buyers now prefer to do their research online, often choosing to seek advice via their social media channels vs. speaking to someone in person. Therefore, it’s vital that retailers not only recognise these trends but also react to them,” he explains. “In the case of social commerce that is by understanding and engaging with your customer base so as to ensure an effective and more importantly, targeted customer experience.
 
“The process of building a strong, loyal community will take time, and there will of course be retailers out there questioning its value – however, with more and more consumers choosing to share their social information, and the web as a whole becoming increasingly focused around our social preferences and tendencies, social commerce is a very natural next step for retailers. However, it is one that I believe needs to be worked into a consistent multichannel approach.”
 
So while it is only a minority of organisations embracing it at this juncture, and while there are plenty of pitfalls ahead, social commerce shouldn't be dismissed.
 
“A recent study from Ability Commerce, found that only 10% of the top 500 merchants are currently selling via Facebook commerce, a trend which is demonstrative of social commerce as a whole – we are currently looking at a minority not the majority,” concludes Bowser. “However, although I do think we have a way to go until social commerce is considered the ‘norm’, the more businesses come to learn and understand the benefits of selling in this way the more customers will begin to recognise the value too.”