Social commerce is one of the latest buzzwords that's making its way through the online marketing and ecommerce world. But what does it really mean? Many people seem to have a general idea of what social commerce is, but the phrase seems to be particularly difficult to define. I think that Social Commerce Today comes closest when they wrote,
Social Commerce: A subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services...
...Or the cocktail party version: Social Commerce is the use of social media in the context of e-commerce.
In practice, social commerce can appear in two different ways: as social media functionality on an ecommerce site, or as ecommerce functionality on a socail media site.
An example of social media features on an ecommerce site would be the reviews and sharable lists that one can browse on Amazon.com. An example of ecommerce features on a social site would be the NBA Store on Facebook, which was specifically built to function within the social mega-site.
The benefits of social commerce, when executed well, are numerous:
Monetize your social media efforts. For several years now, online marketers have been talking about the benefits of social media for business. However, detractors have always pointed out that it is difficult to measure and track the ROI these efforts deliver. This is partly true. But social commerce provides a way to have your social cake and eat it too, as it should lead directly to more sales.
Get free market research. Once you begin tap into social commerce, and encourage conversations to spring up around your products, you'll gain access to information that other companies pay good money for. You'll learn more about your "typical" customer, what motivates them, what they love (and hate) about your number one product, and what they wish you offered. This kind of information can be truly invaluable to an astute marketing team.
Leverage word of mouth. Word of mouth has long been known to be one of the most effective forms of advertising. Unfortunately, no matter how good your company is, you can't make people tell their friends about you. However, with an effective social commerce plan, you will give your customers the tools to share your message with their friends, and maximize your chances of being talked about.
Provide value to the user, and differentiate yourself from the competition. Whether you're showcasing user reviews and recommendations on your site, or increasing your brand presence on sites like Facebook and Twitter, you're providing real value that your users will appreciate and come back for. Social commerce is more than just a way to get yourself in front of more eyeballs; it's a way to separate yourself from the pack, and establish yourself as a leader in your field.