Why Consumers Are Ready for Social Commerce

Why Consumers Are Ready for Social Commerce


Do you remember Blippy? The short-lived app promised to kickstart social eCommerce by sharing your purchase behavior to your social media profile. Your contacts would be able to see exactly what you’d purchased, and how much you paid for it. They’d be able to comment, and you’d be able to pitch in your own thoughts on your new item.

Consumers didn’t quite flock to the app in the numbers investors hoped: only a third of users actually shared details of their purchases online.

A security breach that meant users’ credit card details became visible soon led to Blippy’s demise. Blippy’s biggest mistake may have been thinking consumers actually wanted the world to know what they were spending their money on.

Validation from peers just didn’t seem to be a strong enough reason for consumers to participate – particularly if they feared for their banking security.

But showing off purchases in your newsfeed is a narrow and narcissistic slice of the potential when it comes to social eCommerce. It’s the digital version of showing off a new handbag to your girlfriends at brunch: fun, but ultimately not very supportive of the purchase process.

Social commerce is about far more than this – it’s about recognizing that a sizeable proportion of our purchases require input from others. Whether it’s buying home furnishings with your spouse or booking a holiday with friends, many of the purchases we make are collaborative in nature.

Why should all that collaboration have to happen in other channels, when the purchase itself occurs online? That’s the challenge social commerce attempts to answer – how can retailers support the reality of our collaborative purchasing behaviors?

It’s about collaboration

Social commerce isn’t just about showing off your latest sports watch on Facebook. It’s also about collaborating with others in order to buy. Think of it as shopping integrated with communication tools to enable purchasing.

That’s the next evolution of social commerce, and it’s one that consumers may be ready for.

New kinds of social commerce could make it easier to get consensus from a group when you’re trying to make a purchase that affects all members. A typical example might be a skiing holiday.

Presently a group of friends that wanted to go on holiday together might use the ‘mail to a friend’ function to share a package holiday they saw on a travel website with the group. The groups might then use email or a WhatsApp group to have a conversation about the proposed purchase, then one person will need to return to the travel website in order to purchase.

It’s a very disjointed journey and one that takes place across several platforms.

A more useful solution might be for that discussion to happen on the travel website itself. From the point of view of the buyers, it saves leaving the platform to have the conversation. From the travel company’s perspective, this gives far more visibility over the group’s decision-making process.

In fact, the company might even be able to nudge the process to completion by offering a discount or other incentive to close the deal.

Shopping is social

It’s perhaps something of a curiosity that offline shopping is currently a more social experience than online shopping. More and more purchases are being made online, yet eCommerce still lacks opportunity for social interactions.

This ignores the reality that many purchases require the input of more than one individual. E-tailers are ignoring this reality when they cater only to individual shoppers.

It’s also the case that consumers are increasingly prepared to make bigger and more complex purchases online.

Take the car industry for example; it’s presently working hard to enable online purchasing of cars, financing and leasing agreements. Big ticket items such as cars and holidays, that are likely to be used and financed by more than one person, are highly likely to require decision making by more than one person.

Yet the industry is presently catering only to individuals. This forces the consumer through a tricky self-managed journey because the retailer doesn’t recognize their way of buying.

Changing the power balance

Social commerce also offers the potential to improve consumer buying power by enabling group purchasing. If consumers can organize themselves into a buying collective, they wield greater purchasing power than they do as individuals.

This style of buying is not to be confused with group-buying sites such as Groupon and Wowcher that are already well known. These offer daily deals negotiated in advance for consumers on a take-it-or-leave-it basis.

Real group buying would give consumers more power and reduce the role of the intermediary (such as Groupon) and the cut they take for arranging the deal.

The internet’s organizational ability could enable group buying at a much higher level. It’s presently being offered by Crowdzap, which claims buyers typically get a 30% reduction compared to buying conventionally.

Non-profit group thePeoplesPower is attempting to offer cheaper energy costs by organizing consumers into groups. As yet, these aren’t quite household names. But by enabling group buying, social commerce could give consumers greater power.

Not only does the integration of social media and commerce give consumers more buying power against existing retailers, it also has the potential to design the product itself and make the entire business feasible.

Participatory commerce is the area of social commerce that lets consumers select, design and fund the products they are interested in.

Crowdfunding sites such as Kickstarter are just one example of this model. Other brands have experimented with participatory commerce by inviting people to design their own trainers (Nike) or vote on which clothing designs they produce (ModCloth). It’s a way of leveraging the social nature of commerce and drive engagement with brands.

Social eCommerce has yet to unfold, at least in the West. By ignoring the reality of how consumers purchase, retailers are forcing them to collaborate elsewhere.

This means retailers are missing opportunities to support their buyers and gain valuable information about their decision process. But social eCommerce also has a more disruptive potential: consumer power could really grow if consumers harness collective bargaining power using social technology.

Social commerce offers a lot of potential: when this potential will be realized is not yet apparent.

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