The New Concept: “The Interest Graph” – the opportunity in social commerce will to provide services that harness the “interest graph”- an overlay mapping of social networks by shared interests, built on the backs of major social networking platforms Facebook and Twitter – think Quora for shopping
The Prediction: The next phase of e-commerce will be recreational shopping (shopping for fun – as opposed to utility).
- On this we’re not so sure, on two counts:
- 1) Adding ‘fun’ into the mix with the core quartet of ‘cheaper, faster, safer and easier‘ might make sense if you’ve got the first four licked (but who has?) and are looking to open yourself up to a new segment of people shopping for fun rather than stuff… Moreover, we see social commerce primarily as assistive consumer technology – helping people discover and decide smarter, that is, it has a functional as opposed to recreational purpose
- 2) From an e-commerce futures perspective, we think social commerce is more about today, not tomorrow: Tomorrow the BIG change we see is Web 3.0 – the Internet of things (Web 1.0 connecting pages, Web 2.0 connecting people, Web 3.0 connecting things) – how your refrigerator, and other connected smart objects will influence your shopping. In IBM ‘smart planet’ parlance, and to coin a phrase – the next phase of e-commerce will be ‘smart commerce’, not recreational commerce – where connected assistive consumer technology anticipates and senses our needs and guides and even completes our transactions
Our View: The Future as Smart Commerce, not Recreational Commerce
The Explanation: Social commerce works because:
- The web is being rebuilt around people (rather than pages), and people are influenced by people, particularly by those in the inner circle of their social networks; 10 or so close trusted ‘strong ties’ (as opposed to their extended network of weak or temporary ties – or traditional ‘influencers’ – professional reviewers, sales-persons, experts or celebrities). In other words, word of mouth matters.
- Influence in social networks does not flow uniformly or hierarchically but differentially via types of network ties; ties such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige; thus family affairs spread through family sub-networks, activities by interest sub-networks etc. Nevertheless, we are most influenced by the people immediately around us. In other words, word of mouth matters most with people close to you and when the tie is relevant.
- Small networks of strong ties scale fast; influence 10 people who influence 10 people who influence 10 people and so on, and in ten generations you’ve influenced everyone on the planet. In other words, word of mouth scales fast
As an explanation of social commerce, we like it – it’s seem essentially to be the familiar Web 2.0 (web connecting people rather than pages) explanation from a network perspective, specifically a social networking analysis (SNA) perspective (Om borrows from ex-Google Facebook product manager Paul Adams presentation below on social network basics to make his points). We’d argue that a network perspective combined with insights from social psychology will be a rich and fertile area of insight and future direction for social commerce.
Or if that sounds like a mouthful – as IBM concluded, jargon aside, social commerce is all about word of mouth in the context of commerce. Understand the dynamics of word of mouth and you’ve got social commerce licked.
Web 3.0, the Internet of Things, and the future of commerce