Social Commerce (on The Brand Show)

I’m a guest blogger on The Brand Show this week - The Brand Show is a weekly podcast (and blog) produced by Two West (The company I work for). The post is titled, “Why Social Commerce makes dollars and sense.” The premise of the article is to help businesses and brands understand how social features can provide immediate measurable value. Below is a copy.
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Why Social Commerce makes dollars and sense.

A friend walks up and asks, “Are those new shoes?” “Where did you get those, how much were they?” Casual conversations regarding retail purchases happen all the time, between friends at the local coffee shop or with a stranger on the street. Yet, with sites like TOMS Shoes or Nike ID people can share their shoe purchase with the entire world, instantly. But how do you translate social interactions into sales?

The answer is social commerce. Social commerce is the term used to describe collective sharing and buying of products and services. It’s an approach that allows companies to more effectively measure social media’s ROI – which, up until now, was a major roadblock for implementing a social media strategy. Not anymore.

A great example of using social commerce and instantly reaping the benefits (monetarily and promotionally) was the recent nationwide Gap deal on Groupon. Gap sold 441,000 deals with their nationwide Groupon, bringing in $11 million in revenue. The offer brought subsequent in-store visits and millions of mentions and impressions.

Groupon is a social commerce service that continues to provide a source of conversation AND conversion for businesses. Did you catch that? Conversation and conversion. Both are equally important, yet those hesitant to implement a social media strategy often focus too much on conversion. The benefits from social commerce strategy are two-fold. The idea is paying off, and the proof is in the repeat business – 97 percent of featured businesses on Groupon want to be featured on the site again.

Many brands understand that social promotion of their product is worth a lot – and in some cases worth everything – specifically when we look at Pay with a Tweet. Pay with a Tweet allows you to virtually purchase an item by talking about it (online of course). The approach reverses the ideal of sharing your purchase after the fact.

Uniqulo (an e-commerce site in the UK) recently featured 10 products on their site that were progressively discounted as more people talked about them. They assigned a certain limit to the discounts, but understood that the social capital of sharing was worth the cut in immediate revenue.

What do these examples and the overall concept of social commerce demonstrate?

• It’s evidence that social features influence sales.
• It’s proof that results of a social commerce strategy are measurable and the benefits can be directly translated into ROI.

How can you use social commerce to your advantage?

• Assign a value you’re willing to spend to market your product or service.
• Plan either a promotion strategy or a discount strategy.
• Utilize a service or build incentives into your commerce offering that provide valuable value or savings.

Social is currency.