Social Commerce — Influential retailing

Social Commerce is more than opening stores on social platforms. It has the potential to influence the purchase decisions of the customers and make it easy to complete the transaction. Social platforms are playing an important role in connecting people with a common interest. Brands need to tap into this opportunity to promote and sell the relevant products for those groups with a touch of an emotional element.

Taking a moment to reflect on the retail industry

Retail has always been closer to consumers compared to any other industry. In the early 18th century, mom-and-pop stores were predominate in the developed countries. Later, these stores evolved into departmental stores such as Macy’s (1858) and Bloomingdale (1861). They were front-runners in providing a great consumer experience bring a wide range of goods together. In mid of 19th century, shopping malls became more prevalent increasing the product ranges to a great extreme. By 1960, there were nearly 4500 shopping malls, contributing to 14% of retail sales in the United States. That is when the world largest retailer, Walmart opened its first store in Arkansas, USA.

In 1995, the new era of the retail business started when Amazon opened up the online sales of books. Ecommerce is always been on the top trends in the last 2 decades for the retail industry and with everything going on, it still expected to remain the same for the near future. Nearly 59% of the people in the world have access to the internet and more than 90% of them come through mobile devices. The selling of goods & services online is not going anywhere.

The nucleus of the eCommerce business is the consumer service, with so many online stores available, and it is challenging to retain & increase the lifetime value. The companies spend millions of dollars in understanding consumer behavior to bring more personalized experiences. However, where do we get so much consumer information? The rapid growth of social media platforms and increase adoption across the globe (3.4 billion users) provide an enormous opportunity for brands to get closer to the consumer. It helped brands bring more relevance and personalized experience for the consumers. It sounds like a natural evolution of factory-based mass production to personalized mass customization for the consumers.

Social commerce — An opportunity to influence sales

Does social media help with conversions? Amazon, which primarily sells online, has more than 47% of the US eCommerce market share in 2020. Social media helps with the acquisition, understanding the behavior, and help provide a personalized experience. Nevertheless, when it comes to spending money, consumers look for a piece of trustworthy information. Consumers might click on an Ad, but do they make the purchase decision impulsively?

It is a huge challenge for the retailer to convince the consumer by providing sufficient information about a product, which is rapidly increasing & changing. For example, Amazon has an inventory of 12 million products across different categories. It is going to be a huge struggle

Right Time, Right Product — Recommended by Right Person

A potential solution is to open the stores within the social platforms, make the personalized and timely ad to consumers and enable them to make the in-app purchase impulsively. Sounds like a great idea, but the hypothesis relies on a tricky assumption that consumers make decision impulsively and the promotions make the required emotional connect. Unfortunately pulling out this magic on every product is unrealistic.

The structured approach is to enable the conversion in the social channels through trusted partners, who can promote and sell the goods. It is like a salesperson, helping the consumers find the right products. Brands need to build a community of influencers, who can help and guide the consumers for the purchase. Are they not the same as a celebrity posting an ad? It is more than that, which leads to influence-based personal commerce

Characteristics of an Influencer

• Experts or Referents — A typical influencer has followers or a fan base for the skills and expertise in specific fields such as sports, psychology, health, hygiene, lifestyle, etc. The influencers can attract people and have a reach when they share or promote any content.
• Ability to generate content — Influencers must be able to generate content that will appeal to the followers. Remember, just sharing a standard ad or banner does not make a significant impact on the followers and eventually followers lose the trust.
• Ready to partner — Brands need to identify and manage the relationship with the influencers to continuously promote and sell the products. Influencers understand the dynamics of the modern internet business and ready to accept the partnership with interesting brands

Role of an influence

• Personal touch — Influencers bring the personal appeal to the followers, expressing their own experience and reasons to promote the products. The emotion quotient is high when the information comes from a person you admire or like, instead of reading from the public review forums.
• Value-added service — Influencers must add additional value, primarily in terms of services such as personalized demos, virtual installation or setup assistance, post-sales consultation, and a better way to reach consumer services. Influencers fill in the gap of generations to better leverage the technology and its benefits.
• Increase lifetime value — Influencers must be able to build brand loyalty by providing post-sales services and engagement with the consumers. They become the virtual ambassador for the brand and increase the brand equity among the followers.

What does it mean to brands?

• Think social, Think Personal — Remember social platforms are based on bonding, and purchases are driven by trust, comfort, and value. Brands need to spot the right influencers, who can help promote the brand value and offer the personalized services, which a brand cannot afford.
• Move from the menu to message — Social is not another forum for listing the product catalog, with standard cart conversion buttons and screens. Brands have to make a personal connection with the consumers and that the emotions are more effective through message exchanges than a menu-driven approach.
• Integrated personal commerce — Brands need to have a seamless experience for the consumers even outside the social channels. Consumer information must be integrated with online channels, consumer care, and all other digital touchpoints.
• Use margin Lever for growth — Incentives for the influencers make a significant impact on the promotion and conversions. Brands need to consider the incentives as one of the key selling & administrative expenses that can help drive sales growth.

Summary

Brands need to embrace personal commerce if they have a strong intention of growing social sales. Many personal commerce platforms are coming up in the market, but they are not so much tied to social platforms. The brands have to make a careful investment in bringing social & personal commerce together, to be successful in the social commerce strategy.