Five Trends Driving Social Commerce Evolution

Before you start reading the article I’ll like you to watch a San Francisco startup GumRoad’s video to get some clear and visual idea in the real effect of Social Commerce:

A recent Bloomberg article ignited controversy over whether or not social commerce offers any real value to online retailers. Specifically, the article cited the fact that a number of companies like Gap, GameStop and J.C. Penney have decided to shutter their Facebook stores.

The reason why these large brands are taking such action is simple: nobody is buying anything on Facebook. “We just didn’t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly,” said Ashley Sheetz, VP of marketing for GameStop.

Is the fact that these brands aren’t seeing significant returns enough to throw the social commerce baby out with the bathwater? Critics would say yes, but I beg to differ. Just because something doesn’t work the first time isn’t reason enough to quit trying. If that were the case, we’d all still be using kerosene lamps to light our homes!

I think the real fail in what I refer to as Social Commerce 1.0 is that we (to use another cliché) tried to put a square peg into a round hole. In other words, we thought that by implementing our product catalogs into Facebook that would open an entire new era of social shopping. That has proven not to be the case.

What brands and social commerce platform providers alike are beginning to understand is that, in order for social commerce to work, it has to first be inherently social. Not only that, there has to be some systematic way to measure the effect of social activity and engagement on sales.

Here are five trends that tell me social commerce’s heyday is still to come, but quickly approaching.

1. Fan-to-fan, not brand-to-fan

No one goes to Facebook to buy anything. They go there to socialize, to hear from friends and get updated on what they and others are doing in their daily lives.

When brands interject themselves into conversations, it seems artificial. It’s better when fans themselves share reviews, recommendations, thoughts and opinions about a particular brand or product. Brands that understand this will do their best to facilitate such social sharing and, frankly, stay out of the way.

Wade Gerten, CEO of social commerce provider 8thBridge said in a guest editorial at Forbes that, “The best way to monetize social media is to empower people to promote products to their friends, not for brands to spam you on Facebook.”

Platform vendors such as PowerReviews, 8thBridge, Payvment and others are beginning to recognize the validity of friend-to-friend sharing and are evolving their platforms to take advantage of that activity in a way that fits within the social media environment.

2. Social commerce systemization

Up to now, efforts to effectively use social media to sell products have been largely trial-and-error, hit-or-miss, one-off or experimental in nature. That’s not so much a criticism as it is an observation and I, for one, don’t fault companies large or small that have attempted to make headway in this arena. Social media is a young medium and its social commerce cousin is younger still.

What I see occurring now is a more mature, systematized approach that takes advantage of what brands and vendors have learned from previously failed attempts. While the book is still being written on social commerce, some best practices are beginning to emerge along with case study evidence to support them.

3. Social engagement ROI

Social commerce engagement activities have, to this point, lacked any meaningful measurement so far as ROI is concerned. Most metrics focus on the number of “likes” a brand receives on its Facebook page or the number of retweets that result from posting to Twitter. Except for a few instances – Eventbrite’s 2010 study that showed the dollar value of a “share,” for example – the missing piece has been how such interactions influence sales. That, too, is beginning to change.

4. Shopping first, social second

In the social commerce 1.0 era, social itself was at the core. If a company wanted to engage in social media, it set up a Facebook store, or, in the case of Dell, a Twitter channel dedicated to product promotion and sales.

There is growing recognition, however, that, in order to be effective, shopping has to comprise the core with social as a secondary layer. It’s a matter of intent. If I visit your e-commerce website, chances are I’m there to shop. Conversely, if I go to Facebook or Twitter, my intent is to socialize. By adding social components to your site, you, in effect, create a viral loop between the two.

5. Social commerce as one component of multi-channel retail experience

The “nirvana” of online retail is when shopping activity can begin anywhere, whether on a merchant’s website, via a social network, on a mobile app, or in-store. In fact, one way brick-and-mortar retailers are finding social media to be of value is as a means to drive footfall.

Though we’re not there yet, technology is evolving to make it possible to integrate all of the above into not just multi-channel, but “omni-channel” retail, which, according to Wikipedia, can be defined as a “seamless approach to the consumer experience through all available shopping channels.”

That should come as good news to online retailers because it means a reintegration of the dotcom website into the social commerce experience. The nexus of social commerce activity no longer has to occur first at Facebook, but on the merchant’s website instead.


While I’ve focused primarily on larger brands in this post, my belief is that small e-commerce merchants stand the most to gain from the use of social media. First of all, smaller merchants have less fans and followers than large brands and can, therefore, create more personal connections with them. And while they may lack the large budgets afforded to big retailers, smaller merchants can leverage these high-touch connections to stimulate advocacy among customers.

In addition, there are numerous low-cost social commerce technology solutions available – Wildfire, NorthSocial and Offerpop to name just a few – that enable merchants to incentivize fans and followers to pro-actively act on behalf of the merchant by sharing product purchases, recommendations and reviews with their friends.

Social media isn’t a passing fad. With Facebook quickly approaching 1 billion users – that’s one-seventh of the global population – the world has become increasingly social (and mobile too). Marketers are determined to mine the value social networks can provide in terms of sales. It may have been a bit hurly burly up to now, but, as systems and metrics emerge, that will change to something more orderly and well-defined.

written by: Paul Chaney


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