What is Social Commerce?

October 10, 2014


This post is contributed by Kate Talbot, Marketing Lead at Soldsie, a social-selling platform that enables retailers to sell their items over social channels like Facebook and Instagram.

Online sales are essential to the success of most businesses today. In fact, one of the newest modes of consumerism is known as social commerce, which is the convergence of eCommerce and varying social aspects of online media.

With a rapidly growing consumer audience who is online and using social media, vendors are following suit by making their online shopping process more social as well. This can include anything from user ratings and reviews, to social shopping tools and apps, to social communities and forums. All these elements are focused around a business’s products and services, and using the social element to build trust with potential customers and make sales.

Mashable broke social commerce into seven different categories, which you’ll find below with examples of each type in action.

7 Forms of Social Commerce

  1. Social Shopping – These sites offer chats and forums designed to imitate shopping with friends. GoTryitOn is one example.
  2. Peer to PeerEtsy is representative of this form; it’s when individuals communicate with, and sell directly to, one another.
  3. Participatory CommerceKickstarter rocks the house in this arena. It allows users to create, fund, design and be actively involved in the production of merchandise.
  4. Social Network Driven – Here’s where social networks like Facebook and Instagram come in. With the help of 3rd party tools like Soldsie you can sell directly to your friends and fans.
  5. User Curated – These sites are interesting because they allow consumers to create lists of products to help each other shop. The Fancy is one such venue.
  6. Group Buying – Sites like Groupon or Living Social provide discounted products in exchange for mass purchases.
  7. Peer RecommendationsAmazon is king here. These sites include purchase recommendations and user reviews to initiate additional sales.

How Social Commerce Works

The typical eCommerce model focuses on a straightforward, one-way relationship where the customer is directed to an online store to make a purchase. However, social commerce takes a different approach. It creates a collaborative and participative environment between both the consumer and online store, allowing for a more social and tailored shopping experience. So, here’s how social commerce works:

  • It’s not directly transactional, it’s not short term, and it is not direct response. It is about building a relationship that gives the shopper more than a click-to-buy experience.
  • It works with consumer’s longer term, through a sales funnel. The funnel creates a top down goal: product exposure, identifying interest, additional advertising, time-sensitive deals, etc.
  • The purpose is to learn what consumers are interested in and match those desires in a way that is perceived as helpful.
  • It provides customers with real life data from others, which they want in order to analyze if a product is valuable.

The Benefits of Social Commerce

There are a number of benefits to utilizing social commerce to help your business succeed. Here are just a few:

  • It builds loyal customer relationships.
  • It institutes a brand reputation online.
  • It creates lower return rates.
  • It makes monitoring customer feedback less complicated.
  • It’s great for SEO.
  • It provides product and brand data for business decisions.

Social Commerce 101

Social commerce is a rapidly expanding consumer driven marketing and sales methods to improve business ratings and profit margins. It utilizes the inherent social nature of people, and the shopping experience, to give vendors more insight.

Ultimately, social commerce is beneficial to businesses because it can help develop their brands, improve SEO, and make monitoring feedback easier. It is the wave of the future and all entrepreneurs should consider utilizing its many forms. Start today by checking out services like Soldsie, which makes integration into social commerce seamless.