What is Social Commerce?

By Rob Yoegel

February 10, 2012

Social commerce means much more than having a Facebook store or attributing a sale to an inbound channel like Twitter, Google+, or Pinterest. It extends beyond conversion and takes into account at least two other aspects that impact revenue: customer service and reach.

Your social reach is far more important than how many fans and followers your brand has, or the number of likes, shares, mentions, or pins that your products receive.

To understand this better, think about one (and just one) customer shopping experience or product review being shared with a network of 1,000, 5,000, 10,000, or more friends who then share the same experience with their 1,000, 5,000, or 10,000 friends, and so on. That one (remember, just one) post can ruin your brand or make you extremely successful on a global scale.

This leads to the next key component of social commerce: customer service. How fast can you defuse a harmful situation (think Netflix), take advantage of a positive development (think Bacon Salt), or turn something potentially harmful into something positive (think Nikon)?

Just as you learned that search, email, and other channel management is vital to your organization, you should at least address the customer service aspect of social commerce if for no other reason than to manage your brand reputation and immediately respond to customers. Like it or not, thanks to social media and a surge of smartphone and tablet sales, your customers are now in charge of the shopping experience and demand attention, confidence, and relevance from you online.

With this in mind, a post about social media and ecommerce from Investors.com stopped me dead in my tracks earlier this week. I think Social Media Impact On E-Commerce Called Overrated really missed the mark.

What surprised me even more was that well-respected Forrester analyst Brian Walker was quoted in the post. Walker, who I highly recommend you follow on Twitter (@bkwalker), emphasizes that social media has been more of a customer-acquisition tool for online retailers and hasn't had nearly the same impact on ecommerce as older channels, such as search and email.

If analysis is limited to only conversion or referral traffic (both easily measurable) , I can't disagree with Walker, but understanding the impact of social media on ecommerce goes well beyond direct sales or having a Facebook store, which the Investors.com post seems to focus on exclusively.

• Social commerce is more relevant to your business today than search engine optimization.
Organic search is a game now more than ever before. Controlled almost exclusively by Google, the search giant openly plans to put search results in front of your customers based on activity from their Google+ circles. The days of unbiased search results will soon be a thing of the past. Instead, search results pages will be influenced by the opinions of the company your customers keep, what they like and dislike, and where and what they buy.
• Social commerce is more relevant to your business today than email marketing.
Email remains an inbound marketing channel that allows you to completely control the message. Focus on doing better email list segmentation, and provide preferences regarding what type of content customers will receive email from you and when. Then, find ways to inject relevant social influence into your email, and stop relying on users to click the "email a friend" button on product detail pages.
Although email is having a resurgence of sorts thanks to more consumers using smartphones, better spam technology, and more consumers requesting email alerts for daily deals and flash sales, messages need to shift more towards relevance and influence and away from sending the same email to everyone with the only difference being "Dear [first name]."

Every commerce transaction already has some level of social influence. Think about discussions between couples, among friends, or even customer reviews that have been on websites for years. Social influence will continue to skyrocket. In fact, as far back as June 2010, a Harris Interactive poll revealed that 71% of Americans say reviews from family or friends have a "great deal" or "fair amount of influence" on brand and product choices.

The impact social commerce has on your business should not be measured by direct sales alone. Sure you can build nice-looking spreadsheets and charts and study research reports. But while you're doing that, your customers are talking, texting, sending Tweets, posting to Facebook—and, ultimately, shaping the future of your business.

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