For many years, Social Commerce was about community-based marketplaces where individuals communicate and sell directly to other individuals with help of peer recommendations (Amazon, TripAdvisor, Yelp and many others). Or where marketers drive sales through social network referrals (Facebook, Twitter, Snapchat, Pinterest and many others). Now Social Commerce is about enhancing e-commerce experiences and engaging customers everywhere they shop with you.
But until recently, consumers weren’t able to buy directly from social networks. Why not? Well, because social platforms were unable to figure out how to bring transactions directly to their platforms. And remember, social commerce is really about a transaction resulting from a social interaction, i.e. your friend posts the newest model of Nike shoes that he bought and loves and provides a link on Pinterest, which you simply click and proceed to buy. Sound familiar?
So, in which industries can social commerce be most successful? And what kind of products can be sold through social commerce?
Well, anything that has a perishable component, temporal nature or limited supply is going to thrive on social media. So yes, fashion is a very good candidate, as are travel, electronics, music, leisure and food!
In 2014, Facebook tested its ‘'buy button" with a few small and medium-sized businesses in the U.S. but never went public. Did the concept fail? Or was the targeted audience not ready; maybe people just don’t want to buy from social platforms. Or, perhaps Facebook needed to enlist more businesses to make social commerce work.
In July 2015, Facebook launched social commerce in the U.S. market.
uses Stripe as its payment platform in order to allow people to buy physical and digital products (TV shows, concerts and more). Stripe allows users to store their credit card information so that they can make transactions securely through Twitter.
Snapchat launched its Snapcash application (which is based on Square Cash) to allow people and small businesses to communicate and be able to send money and complete a transaction.
Pinterest showed interest in a partnership with Stripe to power its "buy button" in February 2015, and launched it on June 30, 2015, to select U.S. retailers. Within months, 30 million of the 50 billion pins were buyable. In order to include a ‘Buy’ button for your products on Pinterest you must enroll via the Pinterest waiting list.
Watch a great video from Pinterest.
Conclusion: Who benefits from Social Commerce?
Imagine that you’re travelling to Miami for a weekend and you post on Twitter, “I can’t wait to fly @AirCanada & stay at @MiamiW this weekend,” and then the Hotel tweets back: “Add breakfast to your hotel reservation and receive 5% off”. Then you click on ‘Buy’ and the transaction is complete, just like that without leaving the social platform.
What we have here is a handy formula to manipulate shoppers into making impulse purchases. Firstly, it’s so simple and instantaneous consumers tend to feel like they aren’t spending real money at all. Secondly, a sense of urgency is created for consumers. If these deals were always available, fewer consumers would feel compelled to buy right on the spot.
This example is not that familiar (yet) but once social media puts the right intelligence into their commerce platform this scenario will become far more common. Because short lifespan sales or offers with a limited number of items will work extremely well on these kinds of platforms.
The concept of Social Commerce started in mid-2015, and now that companies are getting initial data on how "buy buttons" are performing, it's fair to say we will be seeing more of them by the end of 2016.