The rise of social commerce

31/03/11

This is the fourth article in a series by Cate Trotter from Insider Trends. Cate is an expert in analysing consumer trends and regularly runs 'the future of online selling and marketing' workshop in the Centre. Come along on 4 April to learn about affordable tools that can help transform your business.

Here, Cate discusses the rise of social commerce and the ways in which you can make this trend work for your business.

The rise of social commerce

Although the future is bright for online retailers (online sales are predicted to increase by 20% each year for the next 10 years), the future is also likely to be very different. As new technologies so often do, the internet is evolving very quickly. Facebook now drives more traffic to some sites than Google does; leading some commentators to say that as the past decade belonged to Google, the coming one belongs to Facebook.

It’s true to say that Facebook’s popularity is exploding – the BBC recently reported that Facebook is now more popular than porn. Its appeal also spans all age groups, with the over 55s joining Facebook at the fastest rate.

Stores such as MyGofer and HauteLook are experimenting with Facebook’s increased usage by setting up ‘F-commerce’ sites (the ‘F’ stands for Facebook, of course). By placing the store in the same place that people are spending time, they encourage impulse visits and, of course, purchases.

Small businesses and social commerce

The good news is that there are a number of services that enable smaller businesses to set up their own Facebook shop, without the need for big budgets or technical knowledge.

Wet Seal is an American clothing retailer for teens, which has taken the F-commerce concept one step further with its ‘Shop With Friends’ app. Users open the Facebook shopping app and invite a friend to join them online. Whilst shopping online, they can use Facebook’s instant messaging system to discuss different items and styles.

Not all social shopping needs to take place on Facebook, however. Ping is the social network that is included as part of the latest free iTunes update. Users can communicate with friends and bands and can easily buy any track or album that is mentioned or tagged in a feed. They can also see a top 10 of songs and albums that friends have downloaded from iTunes – a chart that is likely to influence individuals much more than an anonymous national one. Again, by fusing the shopping and social experience, Ping maximises the likelihood of impulse buys.

Measuring the effects

What about the metrics for some of these initiatives? It’s been found that Shop With Friends’ conversion rate is a massive 2.5 times higher than the conventional website. This is certainly a powerful statistic, however it is also one that makes complete sense. On many levels, shopping is a social activity. The online shopping experience has, until recently, been an isolated one, which can feel quite unnatural and discouraging for many consumers. By combining convenience, huge product choice and 24/7 availability with the social experience and entertainment value normally associated with the offline retail space, social online shopping gives customers the best of both worlds.

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