Sales via social commerce are expected to reach the $30bn mark within five years says a Booz&Co report. However, in order for that to happen four things are going to have to change.
- Address Security Concerns
- Engage via Mobile Devices
- Encourage Open Recommendation
- Invest in Social Media
According to a Harris Interactive survey conducted on behalf of Digitas last month (as reported by AllFacebook.com), the chief concern for consumers is over privacy and security, which social media users feel have to be addressed before they feel comfortable sharing their credit card information. The survey revealed that a full 55 percent of users feel apprehensive about giving out such sensitive data via social channels.
But all is not lost. The survey also surfaced that 45 percent of social media users are at least “somewhat comfortable” with making a purchase via social media, especially men between the ages of 18 and 54 who earn $35,000 or more.
Mobile commerce plays a role too. The survey showed that people are spending as much time accessing social networks via their mobile devices as they do via their PCs.
Lastly, the friend-to-friend connection factored heavily:
- 34 percent of social media users agree that they’d be more likely to share info about a purchase they made on a social media site with friends than one made on a traditional e-commerce site;
- 75 percent of social media users indicate that they agree that they would be more likely to purchase a product or service that a friend openly endorses via social media.
Apart from privacy issues, we believe that social commerce will reach its heyday once two trends develop:
- Brands learn to get out of the way and create strategies and supporting technologies that facilitate friends sharing with friends. That day is fast approaching thanks, in part, to the frictionless commerce made available through Facebook’s Open Graph.
- Social commerce extends beyond social networks – helping consumers buy where they connect – and into online retail – helping consumers connect where they buy. It comes down to a matter of intent; shopping first, social second.
None of this should come as any surprise to e-commerce veterans. The trepidation currently being felt by social media users mirrors that which occurred in the early days of online retail. It took 10 years for e-commerce to reach its apex. Whilst I think the cycle will be shorter in this case, it won’t happen overnight.