Social commerce

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Social commerce [1] is a subset of electronic commerce that involves social media and online media that supports social interaction, and user contributions to assist online buying and selling of products and services. [2]

Contents

More succinctly, social commerce is the use of social network(s) in the context of e-commerce transactions from browsing to checkout, without ever leaving a social media platform. [3]

The term social commerce was introduced by Yahoo! in November 2005 [4] which describes a set of online collaborative shopping tools such as shared pick lists, user ratings and other user-generated content-sharing of online product information and advice.

The concept of social commerce was developed by David Beisel to denote user-generated advertorial content on e-commerce sites, [5] and by Steve Rubel [6] to include collaborative e-commerce tools that enable shoppers "to get advice from trusted individuals, find goods and services and then purchase them". The social networks that spread this advice have been found [7] to increase the customer's trust in one retailer over another.

Social commerce aims to assist companies in achieving the following purposes. Firstly, social commerce helps companies engage customers with their brands according to the customers' social behaviors. Secondly, it provides an incentive for customers to return to their website. Thirdly, it provides customers with a platform to talk about their brand on their website. Fourthly, it provides all the information customers need to research, compare, and ultimately choose you over your competitor, thus purchasing from you and not others. [8]

In these days, the range of social commerce has been expanded to include social media tools and content used in the context of e-commerce, especially in the fashion industry. Examples of social commerce include customer ratings and reviews, user recommendations and referrals, social shopping tools (sharing the act of shopping online), forums and communities, social media optimization, social applications and social advertising. [9] Technologies such as augmented reality have also been integrated with social commerce, allowing shoppers to visualize apparel items on themselves and solicit feedback through social media tools. [10]

Some academics [11] have sought to distinguish "social commerce" from "social shopping", with the former being referred to as collaborative networks of online vendors; the latter, the collaborative activity of online shoppers.

Timeline

Elements

The attraction and effectiveness of Social Commerce can understood in terms of Robert Cialdini's Principles of InfluenceInfluence: Science and Practice":

  1. Reciprocity – When a company gives a person something for free, that person will feel the need to return the favor, whether by buying again or giving good recommendations for the company.
  2. Community – When people find an individual or a group that shares the same values, likes, beliefs, etc., they find community. People are more committed to a community that they feel accepted within. When this commitment happens, they tend to follow the same trends as a group and when one member introduces a new idea or product, it is accepted more readily based on the previous trust that has been established. [13] It would be beneficial for companies to develop partnerships with social media sites to engage social communities with their products.
  3. Social proof – To receive positive feedback, a company needs to be willing to accept social feedback and to show proof that other people are buying, and like, the same things that I like. This can be seen in a lot of online companies such as eBay and Amazon, that allow public feedback of products and when a purchase is made, they immediately generate a list showing purchases that other people have made in relation to my recent purchase. It is beneficial to encourage open recommendation and feedback. [14] This creates trust for you as a seller. 55% of buyers turn to social media when they're looking for information. [15]
  4. Authority – Many people need proof that a product is of good quality. This proof can be based on the recommendations of others who have bought the same product. If there are many user reviews about a product, then a consumer will be more willing to trust their own decision to buy this item.
  5. Liking – People trust based on the recommendations of others. If there are a lot of "likes" of a particular product, then the consumer will feel more confident and justified in making this purchase.
  6. Scarcity – As part of supply and demand, a greater value is assigned to products that are regarded as either being in high demand or are seen as being in a shortage. Therefore, if a person is convinced that they are purchasing something that is unique, special, or not easy to acquire, they will have more of a willingness to make a purchase. If there is trust established from the seller, they will want to buy these items immediately. This can be seen in the cases of Zara and Apple Inc. who create demand for their products by convincing the public that there is a possibility of missing out on being able to purchase them.

Types

Social Commerce has become a really broad term encapsulating a lot of different technologies. It can be categorized as Offsite and Onsite social commerce.[ citation needed ]

Onsite

Onsite social commerce refers to retailers including social sharing and other social functionality on their website. Some notable examples include Zazzle which enables users to share their purchases, Macy's which allows users to create a poll to find the right product, and Fab.com which shows a live feed of what other shoppers are buying. Onsite user reviews are also considered a part of social commerce. This approach has been successful in improving customer engagement, conversion and word-of-mouth branding according to several industry sources. [16]

Offsite

Offsite social commerce includes activities that happen outside of the retailers' website. These may include Facebook storefronts, posting products on Facebook, Twitter, Pinterest and other social networks, advertisement etc. However, many large brands seem to be[ when? ] abandoning that approach. [17] A recent[ when? ] study by W3B suggests that just two percent of Facebook's 1.5 billion users have ever made a purchase through the social network. [18]

Measurements

Social commerce can be measured by any of the principle ways to measure social media. [19]

  1. Return on Investment: measures the effect or action of social media on sales.
  2. Reputation: indices measure the influence of social media investment in terms of changes to online reputation – made up of the volume and valence of social media mentions.
  3. Reach: metrics use traditional media advertising metrics to measure the exposure rates and levels of an audience with social media.

Business applications

This category is based on individuals' shopping, selling, recommending behaviors. [20]

  1. Social network-driven sales (Soldsie) – Facebook commerce and Twitter commerce belong to this part. Sales take place on established social network sites.
  2. Peer-to-peer sales platforms (eBay, Etsy, Amazon) – In these websites, users can directly communicate and sell products to other users.
  3. Group buying (Groupon, LivingSocial) – Users can buy products or services at a lower price when enough users agree to make this purchase.
  4. Peer recommendations and reviews (Amazon, Yelp, Bazaarvoice) – Users can see recommendations and reviews from other users.
  5. User-curated shopping (The Fancy, Lyst) – Users create and share lists of products and services for others to shop from.
  6. Participatory commerce (Betabrand, Threadless, Kickstarter) – Users can get involved in the production process.
  7. Social shopping (Squadded) – Allowing e-commerce to provide their users live chat sessions and shared shopping lists so they can communicate with their friends or other shoppers for advice.

Business examples

Here are some notable business examples of Social Commerce:

Facebook commerce (f-commerce)

Facebook commerce, f-commerce, and f-comm refer to the buying and selling of goods or services through Facebook, either through Facebook directly or through the Facebook Open Graph. [22] Until March 2010, 1.5 million businesses had pages on Facebook [23] which were built by Facebook Markup Language (FBML). A year later, in March 2011, Facebook deprecated FBML and adopted iframes. [24] This allowed developers to gather more information about their Facebook visitors. [25]

History

The "2011 Social Commerce Study" estimated that 42% of online consumers had "followed" a retailer proactively through Facebook, Twitter or the retailer's blog, and that a full one-third of shoppers said they would be likely to make a purchase directly from Facebook (35%) or Twitter (32%). [26]

Influencer marketing

Micro-influencers are designers, photographers, writers, athletes, bohemian world-wanderers, professors, or any professional who could authentically channel things that speak about a brand. It is clear that these channels have fewer followers than the average celebrity accounts, most of the time they have less than 10,000 followers (according to Georgia Hatton from Social Media Today [27] ), but the quality of the audiences tends to be better, with a higher potential for like-minded tight-knit community of shoppers eager to take recommendations from one another. [28] This topic has been also discussed by many other organizations such as Adweek, [29] Medium, [30] Forbes, [31] Brand24, [32] and many others.

See also

Related Research Articles

E-commerce is the activity of electronically buying or selling products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is the largest sector of the electronics industry and is in turn driven by the technological advances of the semiconductor industry.

<span class="mw-page-title-main">Online shopping</span> Form of electronic commerce

Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of 2020, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.

Social shopping is a method of e-commerce where shoppers' friends become involved in the shopping experience. Social shopping attempts to use technology to mimic the social interactions found in physical malls and stores. With the rise of mobile devices, social shopping is now extending beyond the online world and into the offline world of shopping.

Group buying, also known as collective buying, offers products and services at significantly reduced prices on the condition that a minimum number of buyers would make the purchase. Origins of group buying can be traced to China, where it is known as Tuán Gòu, or team buying.

Social media optimization (SMO) is the use of a number of outlets and communities to generate publicity to increase the awareness of a product, service brand or event. Types of social media involved include RSS feeds, social news, bookmarking sites, and social networking sites such as Facebook, Instagram, Twitter, video sharing websites, and blogging sites. SMO is similar to search engine optimization (SEO) in that the goal is to generate web traffic and increase awareness for a website. SMO's focal point is on gaining organic links to social media content. In contrast, SEO's core is about reaching the top of the search engine hierarchy. In general, social media optimization refers to optimizing a website and its content to encourage more users to use and share links to the website across social media and networking sites.

An online marketplace is a type of e-commerce website where product or service information is provided by multiple third parties. Online marketplaces are the primary type of multichannel ecommerce and can be a way to streamline the production process.

<span class="mw-page-title-main">Digital marketing</span> Marketing of products or services using digital technologies or digital tools

Digital marketing is the component of marketing that uses the Internet and online-based digital technologies such as desktop computers, mobile phones, and other digital media and platforms to promote products and services. It has significantly transformed the way brands and businesses utilize technology for marketing since the 1990s and 2000s. As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly used digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e-books, and optical disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones, callbacks, and on-hold mobile ringtones. The extension to non-Internet channels differentiates digital marketing from online marketing.

<span class="mw-page-title-main">Geosocial networking</span> Social network with geographic features

Geosocial networking is a type of social networking in which geographic services and capabilities such as geocoding and geotagging are used to enable additional social dynamics. User-submitted location data or geolocation techniques can allow social networks to connect and coordinate users with local people or events that match their interests. Geolocation on web-based social network services can be IP-based or use hotspot trilateration. For mobile social networks, texted location information or mobile phone tracking can enable location-based services to enrich social networking.

<span class="mw-page-title-main">Content marketing</span> Form of marketing focused on creating content for a targeted audience online

Content marketing is a form of marketing focused on creating, publishing, and distributing content for a targeted audience online. It is often used in order to achieve the following business goals: attract attention and generate leads, expand their customer base, generate or increase online sales, increase brand awareness or credibility, and engage a community of online users. Content marketing attracts new customers by creating and sharing valuable free content as well as by helping companies create sustainable brand loyalty, providing valuable information to consumers, and creating a willingness to purchase products from the company in the future.

Social network advertising, also known as social media targeting, is a group of terms used to describe forms of online advertising and digital marketing that focus on social networking services. A significant aspect of this type of advertising is that advertisers can take advantage of users' demographic information, psychographics, and other data points to target their ads.

<span class="mw-page-title-main">Social media marketing</span> Promotion of products or services on social media

Social media marketing is the use of social media platforms and websites to promote a product or service. Although the terms e-marketing and digital marketing are still dominant in academia, social media marketing is becoming more popular for both practitioners and researchers.

Customer to customer markets provide a way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other. Other types of markets include business to business (B2B) and business to customer (B2C).

Omnichannel is a neologism describing a business strategy. According to Frost & Sullivan, omnichannel is defined as "seamless and effortless, high-quality customer experiences that occur within and between contact channels".

Social media in the fashion industry refers to the use of social media platforms by fashion designers and users to promote and participate in trends. Over the past several decades, the development of social media has increased along with its usage by consumers. The COVID-19 pandemic was a sharp turn of reliance on the virtual sphere for the industry and consumers alike. Social media has created new channels of advertising for fashion houses to reach their target markets. Since its surge in 2009, luxury fashion brands have used social media to build interactions between the brand and its customers to increase awareness and engagement. The emergence of influencers on social media has created a new way of advertising and maintaining customer relationships in the fashion industry. Numerous social media platforms are used to promote fashion trends, with Instagram and TikTok being the most popular among Generation Y and Z. The overall impact of social media in the fashion industry included the creation of online communities, direct communication between industry leaders and consumers, and criticized ideals that are promoted by the industry through social media.

The social data revolution is the shift in human communication patterns towards increased personal information sharing and its related implications, made possible by the rise of social networks in the early 2000s. This phenomenon has resulted in the accumulation of unprecedented amounts of public data.

<span class="mw-page-title-main">User profile</span> Data about an individual user

A user profile is a collection of settings and information associated with a user. It contains critical information that is used to identify an individual, such as their name, age, portrait photograph and individual characteristics such as knowledge or expertise. User profiles are most commonly present on social media websites such as Facebook, Instagram, and LinkedIn; and serve as voluntary digital identity of an individual, highlighting their key features and traits. In personal computing and operating systems, user profiles serve to categorise files, settings, and documents by individual user environments, known as ‘accounts’, allowing the operating system to be more friendly and catered to the user. Physical user profiles serve as identity documents such as passports, driving licenses and legal documents that are used to identify an individual under the legal system.

Wanelo is an e-commerce company headquartered in San Francisco’s SoMa district. It was founded in 2012 by Deena Varshavskaya.

The commercialization of the Internet encompasses the creation and management of online services principally for financial gain. It typically involves the increasing monetization of network services and consumer products mediated through the varied use of Internet technologies. Common forms of Internet commercialization include e-commerce, electronic money, and advanced marketing techniques including personalized and targeted advertising. The effects of the commercialization of the Internet are controversial, with benefits that simplify daily life and repercussions that challenge personal freedoms, including surveillance capitalism and data tracking. This began with the National Science Foundation funding supercomputing center and then universities being able to develop supercomputer sites for research and academic purposes.

Social media use by businesses includes a range of applications. Although social media accessed via desktop computers offer a variety of opportunities for companies in a wide range of business sectors, mobile social media, which users can access when they are "on the go" via tablet computers or smartphones, benefit companies because of the location- and time-sensitive awareness of their users. Mobile social media tools can be used for marketing research, communication, sales promotions/discounts, informal employee learning/organizational development, relationship development/loyalty programs, and e-commerce.

Livestream shopping is used by brands to promote and sell products through livestreams on digital platforms, often in collaboration with influencers.

References

  1. ↑ Social Commerce Defined. Socialcommercetoday.com. Retrieved on 2013-01-10.
  2. ↑ Lam, Hugo K.S.; Yeung, Andy C.L.; Lo, Chris K.Y.; Cheng, T.C.E. (2019). "Should Firms Invest in Social Commerce? An Integrative Perspective". Information & Management. 56 (8): 103164. doi:10.1016/j.im.2019.04.007. hdl: 10397/89937 .
  3. ↑ Santora, Jacinda (2021-03-17). "Social Commerce Guide: Everything You Need to Know for 2022". Influencer Marketing Hub. Retrieved 2022-10-13.
  4. 1 2 Social Commerce via the Shoposphere & Pick Lists Archived 2010-01-23 at the Wayback Machine . Ysearchblog.com (2005-11-14). Retrieved on 2013-01-10.
  5. ↑ (The Beginnings of) Social Commerce. Retrieved on 2013-01-10.
  6. ↑ 2006 Trends to Watch Part II: Social Commerce. Micro Persuasion (2012-08-30). Retrieved on 2013-01-10.
  7. ↑ The Role of Social Networks in Online Shopping. arxiv.org. Retrieved on 2013-01-10.
  8. ↑ Social commerce. www-01.ibm.com. Retrieved on 2014-11-30.
  9. ↑ The 6 Dimensions of Social Commerce: Rated and Reviewed Archived 2010-02-25 at the Wayback Machine . Socialcommercetoday.com (2012-09-24). Retrieved on 2013-01-10.
  10. ↑ FMM Archived 2012-08-05 at the Wayback Machine . Fashionablymarketing.me. Retrieved on 2013-01-10.
  11. ↑ Andrew T. Stephen & Olivier Toubia, Columbia University (2010). "Deriving Value from Social Commerce Networks" (PDF). Journal of Marketing Research. XLVII (2): 215–228. doi:10.1509/jmkr.47.2.215. Archived from the original (PDF) on 2012-08-16.
  12. ↑ Social: GWI's Flagship Report On The Latest Trends In Social Media (PDF). GWI. 2021. p. 7.
  13. ↑ Anderson; Matt; Sims, Joe; Price, Jerell; Brusa, Jennifer (2011). "Turning "Like" to "Buy" social media emerges as a commerce channel" (PDF). Booz & Company Inc. Retrieved 2014-12-04.
  14. ↑ Amblee; Naveen; Bui, Tung (2011). "Harnessing the influence of social proof in online shopping: The effect of electronic word of mouth on sales of digital microproducts". International Journal of Electronic Commerce. 16 (2): 91–114. doi:10.2753/JEC1086-4415160205. Archived from the original on 2014-12-05. Retrieved 2014-12-04.
  15. ↑ Giamanco; Barbara; Gregoire, Kent (2012). "Tweet me, friend me, make me buy" (PDF). Harvard Business Review. 90 (7): 89–93. Archived from the original (PDF) on 2014-12-13. Retrieved 2014-12-04.
  16. ↑ Want to make your e-commerce site more social? Here's one way. ZDNet.com (2013-07-31). Retrieved on 2013-07-31.
  17. ↑ Gamestop to J.C. Penney Shut Facebook Stores; Feb 22 2012. Bloomberg.com (2012-02-22). Retrieved on 2013-04-08.
  18. ↑ Why is Facebook's e-commerce offering so disappointing? .Philip Rooke(2013-02-17)
  19. ↑ Marsden, Paul. "Social commerce: monetizing social media" (PDF). Retrieved 18 July 2013.
  20. ↑ .Mashable.com (2013-05-10). Retrieved on 2013-12-01.
  21. ↑ Forbes. "Betabrand: Who's Calling the Shots On Fashion?". Forbes . Retrieved 2018-06-26.
  22. ↑ F-commerce FAQ. Socialcommercetoday.com. Retrieved on 2013-01-10.
  23. ↑ Facebook Facts and Figures History Statistics. Website-monitoring.com (2010-03-17). Retrieved on 2013-01-10.
  24. ↑ Facebook Deprecates FBML "Wall Street Journal – All Things D" March 9 2011. Allthingsd.com (2011-03-09). Retrieved on 2013-01-10.
  25. ↑ Facebook's switch to frames. Mashable.com (2011-02-24). Retrieved on 2013-01-10.
  26. ↑ Social Commerce to be a $30 Billion Business by 2015. claritics.com . Retrieved on 2014-12-03.
  27. ↑ "Micro Influencers vs Macro Influencers". Social Media Today. Retrieved 12 June 2018.
  28. ↑ Koss, Melaine (21 January 2018). "The 4 Social Commerce Trends To Master This Year". Yotpo.
  29. ↑ "How to Find the Most Impactful Micro-Influencer". Adweek. 6 February 2018. Retrieved 12 June 2018.
  30. ↑ Pierucci, Sidney (17 January 2018). "Why MICRO-INFLUENCER Marketing is 'The Game' in 2018". Medium. Retrieved 12 June 2018.
  31. ↑ "Micro-Influencers Have Taken Over Social Media Marketing: Here's How". www.forbes.com. Retrieved 12 June 2018.
  32. ↑ "Who Are Micro-Influencers & How to Find Them". Brand24 Blog. Retrieved 12 June 2018.
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