Social commerce, or s-commerce, was worth billions of dollars in 2011, and is set to explode as people spend more and more time on social networks. The challenge for all social websites, and the businesses using them, is how to make money without alienating their users with adverts or sales pitches.
A Booz & Company study found that five billion dollars of goods were sold via social networks in 2011. E-commerce widget maker Ecwid recently claimed that installing its application on Facebook raises as company’s sales by 15 percent. A recent eMarketer report found that 79 percent of people have taken advantage of a discount or offer found through social media. More specifically, on Facebook, 63% of users actively seek out sales and promotion codes according to a September 2001 eMarketer report. There is no doubt that s-commerce is a growing phenomenon!
S-commerce is not just about buying a product after reading reviews on social media websites. The potential for s-commerce is almost limitless, and companies such as Burberry’s and Fab.com have found ways of combining sociability with commerce, without losing their audience.
Here are 4 S-commerce concepts worth knowing:
1. Pop-up shops
Companies such as Burberrys have pioneered the concept of virtual pop-up stores. Burberry’s sets up temporary displays on its Facebook page, with live support for fans wanting to ask questions or buy its products. Previously it had offered free samples to fans via a pop-up store embedded in its Facebook page. Social media can also be used to hype up real-world pop-up shops and restaurants.
2. Alternative Monetisation Models
The grow-then-monetize ethos behind Facebook’s launch is giving way to new forms of social monetisation. Facebook is so large that it has a near strangle-hold on targeted advertising. With the low-hanging fruit now picked, new social sites are inventing imaginative new ways to make money.
2.1. Pinterest’s Monetisation Model
Social bookmarking site Pinterest changes the URLs of images posted on its on-line pinboards, turning them into affiliate links. This has made it a rarity amongst Internet start-ups: Pinterest is profitable while still in beta. Rather than be offended by the company changing their bookmarks, Pinterest users prefer it to having adverts on their pinboards.
3. S-Commerce & Targeted Sales
Fast-growing social commerce site Fab.com has found the right balance between social media and sales. It offers its design-conscious members great value deals on quality fashion, jewellery and accessories. By building a niche following of design-obsessed fans, and providing them with exactly what they want, Fab is able to profit from sales without alienating its audience.
4. S-Commerce Transaction Systems
Investment in S-commerce transaction platforms by the major social media players validate the fact that social commerce has become a reality and is here to stay. The two main platforms are Facebook’s “credits” and Twitter’s “T-Commerce”.
4.1. Facebook Credits
Facebook has created its own currency in the Facebook credit. If the social media giant allows credits to be used for third-party transactions, its sheer size would make its credits a serious threat to Paypal.
4.2. “T-Commerce” Twitter & Chirpify
Chirpify has created a transaction system for Twitter, based on Paypal’s system. It is still being trialled, but may soon be available to all Twitter.com users. Chirpify shows that if social networks fail to monetize, then third-parties will do it for them. Transactions via tweet have been dubbed t-commerce!
In a Nutshell
The future of s-commerce is bright as social media websites continue to expand. Successful marketers will need to engage audiences on these social properties and feel comfortable with the technologies and how best to leverage them to achieve client goals and objectives. As with all social media interactions, sales success depends on keeping your audience engaged with great content and 2 way communication.