For a Better Customer Experience, Organizations Must Separate Commerce from Social E-Commerce


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e-commerce entrepreneur Alexander Graf explains why customer-focused brands should accept that social media is not going to drive the next major shift in retail

All the signs are clear – social commerce is going to transform social media into one big shopping channel. The whole buying experience, from initial product discovery to check-out, will take place on social media, with the consumer never stepping out of the app.

TikTok has launched its shopping facility in the UK, while more consumers are shopping on social media platforms like Facebook, which can especially benefit smaller brands. Accenture has predicted social commerce will be worth $1.2 trillion by 2025, growing three times faster than traditional e-commerce.

Any organization, therefore, whether B2C or B2B, a retailer or manufacturer, should be looking to sell via social media, right? The problem is that social media has never really been about commerce, and that’s unlikely to change now.

The emergence of social media

When social media first emerged in the mid-2000s, it was transformative in many ways. And one of those was undoubtedly in the influence that friends and contacts could have in purchasing decisions. If someone posted on Facebook about a new pair of trainers that they loved, it’s not unreasonable to think some of their friends might be influenced to also look at that brand.

However, in terms of tangible sales, this didn’t happen in significant numbers. A little later, social media users were potentially very much at the center of an online purchasing chain, either helping generate a buying impulse with a Facebook status update or supporting the brand by writing SEO-helpful product reviews.

Social commerce is still about selling, but now it is no longer the product that is the beginning, but the human being [and] the user is much more in the foreground as a producer or at the beginning of the process. Providers are not within reach or transaction competition but in competition for the user’s attention. So, for Amazon, someone is a buyer; whereas for Etsy or Polyvore, a producer.

Where is the purchase made?

Purchases usually only happened after a participation process involving the consumer searching on the website, asking friends, sharing ratings, etc. We were all going to share, “like” things, then leave social signals on the web, and people would participate in the online transaction both before the purchase, during the purchase, and after it. There were many moving parts and a lot of free work by the consumer to help the brand.

None of these services, sites, or ideas made it work. Not one survived the Amazon wave or the ASOS wave. Ask yourself – how many times have you actually bought a product via a social media platform? Although people are there to buy, and payment facilities are there if they wanted them, they would still mostly to Amazon or elsewhere.

Making the latest social commerce wave viable

I do not believe that the situation has changed sufficiently to make the latest wave of social commerce viable. There is potential perhaps with Instagram, which has influencers and brands solely built within the social ecosystem. So, it’s not a brand manufacturer using a network as an advertising channel, but a brand built within the channel. If there’s some exclusivity of the product and an easy way to check out, the two worlds may be merging in that specific instance.

Similarly, there may be an opportunity for social commerce to succeed in China or India, where it doesn’t have so many gaps to bridge. WeChat is already a prominent force in social commerce and Chinese social often supports a network system where 10 other friends can agree on buying a product and then get a discount together, which could potentially drive social commerce further.

Social commerce and the need for trusted sales platforms

As it stands, advertising on Facebook and other social media environments drives consumers to businesses but just does not facilitate the sale. People use social media for many reasons – staying in touch with friends, sharing their own content, managing their social lives, making political statements, and much more. On Amazon, they buy stuff.

The gap between the two is vast and remains so now. Brands can and should communicate with customers via social media, as it’s a productive way of building and maintaining relationships. But even the biggest social networks cannot become relevant players in the e-commerce space, where trusted sales platforms remain dominant.

The future of retail is still very much focused on these platforms, and customer-focused organizations are advised to apply social commerce to their own sales platforms, whether that’s an online marketplace or an e-commerce site selling only their own products.

Alexander Graf
Alexander Graf is one of the top e-commerce minds in Germany. He is a passionate e-commerce entrepreneur who to date has built more than 10 companies, including e-commerce leader Spryker Systems which he co-founded. He is evangelical about e-commerce and marketplace selling and explores these themes via his blog, Kassenzone, now the largest German podcast on e-commerce, and in his best-selling book, The E-Commerce Book.


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