Social shopping or S Commerce is a type of eCommerce that seeks to involve people with similar tastes in an online shopping experience. Sites like Pinterest claim to differentiate because on the one hand they offer the ability to pin items of interest but on the other hand they allow targeted marketing and click-through referral opportunities through image relationships. Arguably TikTok and Snapchat are also powerful channels for brands to launch their eCommerce campaigns. In fact, perhaps more than 50% of Snap’s business is in Direct Response advertising.
Many social shopping sites are similar in feel and design to social curation site Pinterest. E-commerce experts suggest this is not coincidental, that the approach is catering to a new generation of shoppers who enjoy and expect a “Facebook experience” where users like and share as part of their online life and are seen to do this.
Social shopping sites, like Kaboodle and ShopStyle, offer recommendations to members in the same way that you’ll see on Amazon Etsy and eBay.
The concept of Social Shopping makes presentations personal, by providing members with the ability to create personal boards, preferences and lists. For these sites, stickiness comes in the concept of community and the opportunity to engage in a dialogue with friends and peers. The goal is to build community by encouraging members to talk about products and preferences and make suggestions directly to their friends and social contacts as they might if they were shopping together in actual bricks and mortar stores.
Social commerce is that segment of eCommerce where sellers can actually sell and not just market their products directly through the social media platform, they can also browse goods catalogues and make those direct purchases.
Unlike the more limited, social media marketing, true social commerce gives the customer the option to perform a direct checkout and settlement.
Right now this is a $90Bn market, so what are the implications for customer data and your business?
Social commerce is a subset of eCommerce, that makes it relatively easy to measure and evaluate the performance of your ad spend with the various platforms. The social media platforms have built-in eCommerce metrics for impressions, engagement and reach. you can see the number of clicks, the number of views and the level of engagement and perhaps even the response sentiment. All these capabilities come at a price which erodes your potential customer lifetime value. With the average consumer spending around $400 – $500 per annum on social commerce, there are the many costs that are loaded up by the platforms to consider, from the ad spend through the commerce fees and charge and pay commission.
In reality, social commerce is there for shoppers, not businesses. Since the entire process is focused on the particulars of the Social Media platform and if it includes checkout you lose website traffic and the opportunity to harvest some important customer characteristics.
Further, unless you build customer contacts from your shipping or Logistics Execution System (LES), it is questionable who owns the actual customer. The more social platforms take over the buying process, the more they take power away from your business. The less data you have the less personalised the experience you can offer both online and offline.
If those same platforms also sell the customer data they have to others, they further the cut into brand allegiance with shoppers potentially being redirected to competitors including the platform itself if it decides to branch out into retail.
To learn more about Pretectum’s Customer Master Data Management system contact us today.