Social Commerce - What Exactly Is It?

Social commerce is the extension of e-commerce into social networks like Facebook, and Twitter, where the offer can be easily shared and many times the transaction takes place within the social experience.

According to Nielsen, Social Networks and Blog sites rule Americans’ Internet time, accounting for 23 percent of time spent online, more than twice the amount of time spent on the #2 category, Online Games.* This shift in consumer behavior means it’s more important for brands to meet their customers where they spend their time: within the social stream.

Retailers have been cultivating social media strategies for several years, but it has always been difficult to determine their ROI. Social commerce is one way for businesses to measure the effectiveness of their effort on social networks. Brands realize the opportunity to develop affinity with consumers through the use of social network, and this new trend toward social commerce is allowing them to not only sell through social channels, but reward their “fans” and “followers” by offering special products to their social media networks.

Brands make the products compelling in the social space by offering discounts, limited edition items, bundled products, and well-curated products.

The extension of social commerce goes one step further than the purchase…a compelling offer also encourages consumers to share offers with their friends.

For example, Tretorn, a Swedish shoe company who regularly offers social commerce deals, recently ran a campaign they called “1 Shoe. 1 Size. 1 Day”. The offer was simple, Tretorn would sell one size shoe on that day of the month (size 6 on the 6^th, size 7 on the 7^th, and so on). The shoes were priced to sell at $20 – sometimes over 70% off the retail price. The nature of the campaign encouraged friends to tell their friends about $20 shoes, but also to heighten their awareness that if their friends are size eight, the eighth is their day to save.

How does a brand get started with social commerce? Start by talking with your community. If a social community has no engagement, simply starting to sell on a Facebook page may not be enough. Social commerce itself is not a social media strategy, rather, it should be weaved into a greater social media marketing plan and sprinkled into the social conversation.

There are several platforms that enable social e-commerce by either allowing transactions within Facebook or allowing stores to be shared with friends. The basic building blocks of a social commerce campaign are:

• A compelling product - price, exclusivity, limited quantity all matter
• Traffic – the more eyeballs on an offer, the more an offer will be shared and the more purchases will be made.
• Placement – posting offers in as many places as possible will increase visibility and traffic to the offer
• Buzz – a compelling offer will be shared more, creating more likelihood that an offer will go “viral”
• Conversion – developing a solid user-flow and trust is critical to increase conversion

By leveraging a great offer to a group of interested people through social commerce, brands can begin to generate truly measurable ROI through their social media efforts.