perspective Smart, Social and Satisfying The Future of Shopping in the Age of Social Commerce
- Girish Gopalakrishnan
For a trend that came into existence only
dialogues about companies and their
Businesses can leverage social media to
recently, social commerce has gained
offerings we participate in today were
understand their customers, learn about
unprecedented momentum and is
absent.
their behavior, demands, desires, and
transforming the market dynamic beyond recognition. As social commerce evolves to encompass new tools and channels and ideas, it is reshaping the act of buying and selling.
even as e-commerce took off, we saw the advent of Web 2.0 technologies. ratings and reviews, video sharing, wikis, forums, blogs, and social networking facilitated interaction among users as peers
motivations. By its very nature, social media allows companies to engage buyers through multiple tools. Buyers use these tools for social interactions, which help them make purchase decisions and attract their friends, thus fostering brand loyalty.
the union of commerce and the internet
discussed, critiqued, and recommended
had its beginnings in corporate websites
everything they saw, did and consumed.
However, the social commerce story does
with companies putting up information
these conversations transplanted real-
not end here. As technology advances to
on their products and services, vision and
world social interaction into the virtual
keep pace with buyer demands, sellers
mission, and history and management.
world as friends, who were sharing
can implement new social commerce
the era of Web 1.0 saw one-way
shopping opinions face-to-face, moved
tools and models to satisfy customers,
communication; if customers and investors
online. the more consumer behavior
create advocates and generate sales. to
needed information they went to the
changed, the more it remained the same.
better understand how social commerce
website to gather data. in this scheme of things, the company was the gate-keeper, controlling the messaging and thus the projection of its image. While selling of products made its way to the internet as e-commerce made its presence felt, the
this is the age of social commerce, as social networks and shopping processes intersect online. While this paradigm shift is creating challenges for companies, it is also offering a range of opportunities.
will enable business, let us examine how it helps sellers and draw an evolutionary roadmap of social commerce.
Win-win for Buyers and sellers With an explosion in Web 2.0 technology,
Not only do users share purchase
the sphere of influence buyers exercise
customers have a powerful avenue to
information but they are also influenced
over their peers in the online world is a
communicate, gather information, and
by the persuasive buzz of that information.
natural corollary of the social nature of
make transactions. the rise of social media
According to a study, 83% of online
shopping, wherein buyers enjoy social
has given them a ready forum where they
shoppers say they are interested in sharing
interaction as they engage in the act of
can learn, participate, express opinions
purchase information with people they
purchase. Buyers trust people who are
on products and services, and influence
know and 74% of online shoppers get
like them – fellow buyers who fit a similar
peers before they purchase. According to
influenced by friends’ purchase history. (2)
profile and peers who are friends. Online
a recent survey, 42% of online consumers
Moreover, 71% of people say they trust
retail benefits most when it lets the buyer
say they have used social media services to
reviews from friends and family members
interact with such people. With social
evaluate products or to find deals. 58% of
and 45% of people trust reviews from
commerce enabling such social exchange
the 1,787 adult online shoppers surveyed
friends and people they follow on social
in the virtual world, buyers can make
said they follow companies through social
networks. (3) As a result, businesses are
better – and more pleasurable –purchasing
networking sites to find deals, while half
facilitating these interactions through their
decisions.
(49%) say they want to keep up to date on
ecommerce websites and through social
products. (1)
networking sites.
For sellers, in turn, social commerce offers
Moreover, as peers recommend products,
grocery chain need not enable the same
a unique opportunity to increase sales
sellers gain information they did not have
type of interaction, as say, a manufacturer
by enabling increased traffic, improved
access to earlier – knowledge of potential
of consumer durables. For, a person may
conversion rate and better average order
purchase behavior. For one, a peer’s
not seek the opinion of peers when buying
value. Let’s see how that works.
recommendation helps a buyer decide on
provisions but may need active input
purchasing a particular product when she
from friends when purchasing a high-
is seeking information to help decide on
consideration item like an LcD television.
Businesses can understand their customers through social commerce, learning about their likes, demands and motivations. earlier, the expression of interest in a product or a service was an explicit act. today, with the advent of intelligent social commerce solutions that study and understand customers through their peer interactions and transactions, sellers are
the product to buy. Additionally, if a person gains information on a social networking site that a friend has bought, say, a particular mobile phone, the knowledge may induce the need for the same product even if the buyer had no inclination to purchase the same.
information gleaned from such interactions contains a lot of insight that can be leveraged to effectively promote targeted products and serve customers. As your business gains greater insight into the drivers of customer behavior, this helps attract more buyers, satisfy customer
capturing implicit shopper preferences
therefore, sellers need to enable and
requirements, and increase conversion
and interests. sellers know what products
are enabling social interaction on their
rates and dollar spend.
buyers view, what category they are
websites, encouraging existing buyers
interested in, what they search, and what
to interact with friends and recommend
products they share with peers. A seller
products. this helps attract friends of
knows what the buyer wants without
buyers, and help convert them into buyers.
the buyer expressing herself in an overt
the seller can gain indirect access to the
manner. thus, the seller can leverage the
buyers’ friends network and set in motion
information to drive targeted products to
a multiplier effect on site traffic. However,
shoppers. this ensures a higher probability
the type of interaction promoted by the
of converting them into buyers and
seller needs to be focused, determined
increasing their overall order value.
by the type of product being sold. thus, a
Above all, happy customers help build brand loyalty and create brand advocates. prospects become customers and existing customers visit and buy again, and promote your products among peers. this implicit advocacy has a multiplier effect on traffic as your buyers bring their friends to your business, creating a loyal community for your business and giving an impetus to the virtuous cycle of buying and selling.
Future trends customization and convenience in this, the age of instant and individualized
technology evolves, it will play a critical
online shopping experience. Over the
gratification, customers are always
role in enabling the seller to understand
next one to three years, buyers are likely
asking for more: personalized products,
and, thus, satisfy the buyer through social
to be able to interact with peers within the
greater responsiveness, and convenience.
commerce. this can make online shopping
ecommerce site, without detaching from
satisfying their desires is paramount for
a much more immersive, customized and
their purchase activity to fulfill their need
sellers in an era of hyper-competition and
intuitive experience than what we are
for social shopping.
low margins.
used to at this point in time. the effects of
sellers are steadily gaining greater insights into individual customer behavior, interest and preferences through social commerce tools by understanding social interactions and online social shopping
improving the online shopping experience can lead to increased consumer loyalty, greater conversion rates, enhanced customer satisfaction, repeat business, and higher profits.
With technology allowing greater customization of products at a reasonable price, in the future buyers will be able to design products – such as apparel or jewelry or furniture – online, connect with their friends online through the site to get
patterns. thus, they will be able to offer
the buyers’ need for customization and
their opinions and inputs, and place an
appropriate products and sell the right
convenience and the ability of the seller to
order for a truly unique product.
product to the right customer at the right
fulfill the same through social commerce
time – meeting specific requirements. As
tools will define the way forward for the
the device that will possibly enable the
events specific to the area in which she
buying activities. in the former, technology
greatest customer satisfaction in the age of
finds herself.
enables people at different locations to
social commerce is the mobile phone. As the reach of the always-on mobile phone spreads, it is also revolutionizing the way the always-connected buyer shops. With almost five billion connected by cellular telephony, this is a device companies can ignore only at their peril. Offering the convenience and speed of on-the-go shopping to customers who are often on the move, it is expected that in 2015, $119 billion worth of goods and services will be purchased via a mobile phone. (4) As smart phones supporting social commerce become more commonplace, the mobile device will ensure that its user is aware of her peers’ purchase activity instantaneously through alerts without having to log in to a site on a computer. Location-based apps in the buyer’s social network can inform her about sales and
Far from being a rational economic transaction involving buyer and seller, shopping is an emotional activity evoking a positive state of mind in the shopper. to attract and retain customers, sellers are giving paramount importance to creating a pleasurable experience for shoppers. As people like to interact with peers when
shop together online – seeing the same product, communicating with each other and sharing opinions, thus mimicking a real-world shopping experience. Group buying refers to the capability to purchase a product jointly in an ecommerce site, discuss, share ideas and purchase the product through individual contributions.
shopping, sellers will, in the near future,
thus, in the near future, an engaged online
replicate the experience of shopping in a
shopping website will give shoppers
real-world store by enabling satisfying and
the option to interact with friends over
effective group shopping activities through
varied devices and purchase products.
Web 2.0 technologies.
this has the added advantage of giving
Brick and mortar stores have been tapping the power of collective buying through sites like Groupon. As technology allows it, online sellers will start leveraging the power of social commerce. this will include both co-shopping and group
sellers an insight into customer opinions and behavior, allowing them to further improve the online shopping experience by enhancing customer satisfaction levels.
Five Years On intelligent Devices, informed sellers As social commerce becomes smarter with the application of advancing technology, sellers will be able to gain customer information from beyond their ecommerce site. perhaps five years down the line, sellers will be able to learn about the buyer’s preferences, interests and community from their interactions on other sites and from intelligent devices. All aspects of a buyer’s digital life would be connected to every other aspect. As a result, the targeting of products and services will be much more focused and intuitive. soon in the future, sellers may be able to get information related to a buyer’s interaction – across multiple devices – with a particular brand/product. through enhanced intelligent applications and customer information-sharing standards, a seller can gather information about customers even without the latter having visited the seller’s site. in addition to having better and focused information about existing customers, sellers will have information about buyers who are not yet their customers. such information can help sellers target and contact buyers proactively with customized products, allowing them to increase sales.
conclusion social commerce no longer inhabits the land of theory and supposition. it is a market reality that is driving the future of buying and selling. As sellers are better able to plot their buyers’ interests, profiles, and friends, the brave new world of social commerce allows them to offer targeted products, satisfy their customers, attract their friends, and generate loyalty. the information sellers can glean about customers through their social commerce interactions and transactions will ensure that in the matter of a few years, we as buyers need not search for products. instead, the products will find us. even as social commerce increases the challenges found in the marketplace, it provides a means to build customer satisfaction and loyalty – both of which are very elusive and valuable for the seller.
reFereNces 1. 2011 social commerce study, by shop.org, comscore and social shopping Labs 2. Manage smarter survey, september 2009, 3. speak Now or Forever Hold Your tweets, Harris poll, Harris interactive 4. Mobile commerce to grow to $119bn by 2015, ABi research
About the Author Girish Gopalakrishnan works as a product Manager within infosys’ Business platforms team. He has experience in social media products for enterprises related to communities, widgets and mash-up. He was instrumental in conceiving the idea and also developing the social commerce product for the infosysedgetM platform. He has overall industry experience of around 10 years, with more than half of it in the product management space. His product management domain experience range from personal finance to social media. He holds a bachelor degree from the National institute of engineering, Mysore and an MBA from indian institute of Management, calcutta.
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