Misconception #1: Social Commerce does not provide measurable ROI
Social media has for some time been relegated to theareas of research, development and experimentation.Until recently, efforts have primarily been aimed ataccumulating fans. But now, marketers should beasking: what is the value of a fan? Social commerce isthe natural next step in the evolution of commerce andwhile it is in its infancy, the early data is promising.Social commerce does have detractors who arguethat Facebook commerce investments have unclearreturns thus far. However, this is not an indicator thatit will not work – but rather, this is the time in whichconsumer behavior is being formed. Technology isno longer the limiting factor; marketers are now ableto access the tools that enable more compellingprograms and experiences within Facebook.Early evidence for social commerce is positive.We have seen conversion rates for Facebookstorefronts that double those of the company’sprimary ecommerce site. Research also indicates thata consumer is 51% more likely to purchase from aretailer after “liking” their Facebook fan page and 28%of Facebook users already bought a product onlinevia a Facebook link. Lastly, fans spend 117% morethan non-‐fans, signaling that brand loyalty has clearrevenue effects within Facebook. In other words,social commerce storefronts are on track to becomekey vehicles to ROI generation for retailers.
Misconception #2: Social Commerce equals group buying
Groupon, Living Social, and countless local emulatorshave enjoyed widespread adoption and success,which many have attributed to the social manner inwhich deals go viral. It is important to recognize thatanything that connects consumers, brands, productsand services with one another is part of what is thegrowing domain of social commerce. However, thegroup-buying phenomenon represents just a singleelement of whatcan embodysocial commerce.There is noquestionthat socialenvironments andpromotions area virally chargedpair. Large-scale retailers such as American Apparel and OldNavy have successfully leveraged Groupon to triggerflash-flood consumer response. Well- establishedbrands strategically display group deals on Facebookand Twitter to further promote their reach. Enlistingcustomers and providing incentives for them to share,congregate and act based on collective activities is just a small fraction of what social commerce can be.
Misconception #3: Social Commerce is just adding a payment button to my fan page, or a copy of my ecommerce site within Facebook
Technology and social media empower today’sconsumers to be increasingly connected andretailers need to effectively move into these socialenvironments to keep up. Thus social commerceshould be regarded as a natural extension of anoverall commerce strategy. Adding a payment buttonto Facebook is a start, but should not be the endof social commerce activities. Additionally, simplyreplicating an ecommerce site – with the exact sameproduct catalog and user experience does not takeadvantage of the social medium and the reasons whypeople are there in the first place.Retailers who differentiate the Facebook stores fromthe traditional ecommerce websites are engagingin social commerce. Shopping is inherently socialand social commerce provides a unique experiencethat takes advantage of that characteristic. With therapid development of social commerce technology,marketers have the opportunity to create uniqueshopping experiences that are interwoven within the
Five Misconceptions and Realities About Social Commerce
96% of retailersbelieve that socialmedia campaignsdrive sales.
Five MisconceptionsRegarding Social Commerce
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