18 Mar What is Social Commerce?
Social commerce is a form of eCommerce which uses social networks to assist in the buying and selling of products and services. The term describes a new online retail model that incorporates established social networks and/or peer-to-peer communication to drive sales.
The Evolution of the World Wide Web
In its beginning stages, the Web 1.0 was static. A website would provide a customer with a shopping cart to purchase a product and there was no communication involved.
The Web 2.0 enabled customers to contribute content and interact with one another. User generated content as seen on sites like YouTube and Facebook encouraged customers to collaborate and share information.
Today, we have entered the phase of Web 3.0. With the advent of social media, customers go online and read recommendations and suggestions from other customers to find advice about a product. The Web 3.0 is also known as social commerce, which allows for the exchange of products and services as well as the trading of user contributions and social interaction to assist in the online selling of products.
The History of Social Commerce
2005: The term “social commerce” is introduced by Yahoo.
2007: Shopping sites like Polyvore are launched.
2008: Suggestions via social media become normal business practices.
2009: $34 million is spent on Facebook’s first retail transaction via 1-800-Flowers.
2010: Group buying platforms like Groupon launch.
2011: Google enters the group buy space with Offers and Google+.
2012: Social Commerce sales reach $3 billion.
2013: Social Commerce sales reach $5 billion.
2014: Facebook accounts for 70% of social-driven eCommerce site revenues.
2015: Social Commerce sales reach $14 billion.
Types of Social Commerce
- Peer to peer sales platforms – Think eBay or Etsy
- Social network-driven sales – Facebook, Twitter
- Group Buying – Groupon, Living Social
- Peer Recommendations – Amazon, Yelp
- User-Curated Shopping – Lyst, The Fancy
- Participatory Commerce – Kickstarter, Threadless
- Social Shopping – Wanelo, Fancy.com
Social Commerce with Video Checkout
Recent developments in social commerce, such as Facebook Buy Buttons and YouTube Donation Cards, mark the first step for social networks beginning to allow customers to make in-feed purchases. This means the transaction takes place on Facebook, not on a brand’s website.
Although there are some advancements in this technology, social networks are still directing customers to separate retailer sites to purchase products.
Video Checkout is a revolutionary application that allows customers to purchase and donate within their social media feed. This makes sharing information about a product and a user’s experience significantly easier and makes conversion rates up to five times higher.
Having the ability to bring a purchase directly to the Facebook news feed is a step in social commerce that most brands are aiming for in the future. But with Video Checkout, shopping in social media feeds is a possibility right now.