There’s a useful post over at econsultancy by Eric Abensur of cloud-based commerce company Venda, that asks a simple, but very pertinent question, is social commerce worth the investment?
The short answer – according to the post – is a qualified yes, if retailers adopt the right approach and tone.
For the e-consultancy post, social commerce is not about turning social media into a marketplace, but using social media to promote the marketplace/site you’re selling on – essentially through social sharing. For instance, Etsy sellers use Pinterest for free advertising, and 20% of buyers come to the craft marketplace from seeing shared pics on Pinterest. Use e-commerce software to sell, and social software to share. Simple, right?
But is that it? Is social commerce really just regular e-commerce with social sharing added in? Well it’s certainly part of it. Social commerce software solutions with traction – TurnTo, 8thBridge, AddShoppers, inSparq, Bazaarvoice, Lithium, Sellaround – are all increasingly focusing on adding premium social features to e-commerce solutions – with ratings and reviews, Social Q&A, social recommendations, and customizable share buttons leading the pack. This is social commerce as a plugin, or rather, a set of plugins – and yes, it is worth the investment. Why? Because these social plugins for e-commerce sites are simple, time and cost-efficient ways to help retailers monetize the referral value of their customers – which can be up to 40% of total customer lifetime value. Social commerce as a plugin is a no-brainer.
But there’s more to social commerce than a plugin. The opportunity is to use social commerce for business model innovation – using a social mindset to create and capture customer value in new and different ways.
- Tuangou (team buying) – selling to groups, not individuals (e.g. Mercedes has offered members of social networks the opportunity to club together an buy in bulk with group discounts)
- Pop-up Retail – using social media as a channel for selling limited editions. (e.g., this year Mercedes launched a special limited edition Smart Car sold only on the Chinese version of Twitter)
- Collaborative Consumption – selling stuff for sharing (e.g. Zipcar, AirBnB, Zopa)
- Collaborative Commerce – using social technology to manage supply chain alliances and collaboration. For example, last year luxury retail chain Neiman Marcus said it will put together a limited collection from 24 American designers this holiday season with an unlikely partner … discounter Target Corp
Social plugins are a good way to start with social commerce, they are worth the investment. But the big wins will happen when companies adopt a social mindset to do business model innovation – by thinking we-commerce not me-commerce. The future of social commerce will happen with business model innovation, not a plugin.