Social Commerce

Is social commerce worth the investment?

There’s a useful post over at econsultancy by Eric Abensur of cloud-based commerce company Venda, that asks a simple, but very pertinent question, is social commerce worth the investment?

The short answer – according to the post – is a qualified yes, if retailers adopt the right approach and tone.

For the e-consultancy post, social commerce is not about turning social media into a marketplace, but using social media to promote the marketplace/site you’re selling on – essentially through social sharing. For instance, Etsy sellers use Pinterest for free advertising, and 20% of buyers come to the craft marketplace from seeing shared pics on Pinterest.  Use e-commerce software to sell, and social software to share. Simple, right?

But is that it? Is social commerce really just regular e-commerce with social sharing added in?  Well it’s certainly part of it.  Social commerce software solutions with traction – TurnTo, 8thBridge, AddShoppersinSparqBazaarvoice, LithiumSellaround – are all increasingly focusing on adding premium social features to e-commerce solutions – with ratings and reviews, Social Q&A, social recommendations, and customizable share buttons leading the pack. This is social commerce as a plugin, or rather, a set of plugins – and yes, it is worth the investment.  Why? Because these social plugins for e-commerce sites are simple, time and cost-efficient ways to help retailers monetize the referral value of their customers – which can be up to 40% of total customer lifetime value. Social commerce as a plugin is a no-brainer.

But there’s more to social commerce than a plugin.  The opportunity is to use social commerce for business model innovation – using a social mindset to create and capture customer value in new and different ways.

  • Tuangou (team buying) – selling to groups, not individuals (e.g. Mercedes has offered members of social networks the opportunity to club together an buy in bulk with group discounts)
  • Pop-up Retail – using social media as a channel for selling limited editions. (e.g., this year Mercedes launched a special limited edition Smart Car sold only on the Chinese version of Twitter)
  • Collaborative Consumption – selling stuff for sharing (e.g. Zipcar, AirBnB, Zopa)
  • Collaborative Commerce – using social technology to manage supply chain alliances and collaboration. For example, last year luxury retail chain Neiman Marcus said it will put together a limited collection from 24 American designers this holiday season with an unlikely partner … discounter Target Corp

Social plugins are a good way to start with social commerce, they are worth the investment.  But the big wins will happen when companies adopt a social mindset to do business model innovation – by thinking we-commerce not me-commerce.  The future of social commerce will happen with business model innovation, not a plugin.

Chartered psychologist specialising in consumer behaviour, wellbeing and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.

4 Comments Add New Comment

  1. Thanks for an amazing post Paul. I’m really passionate about this subject, especially now that I work for Yotpo which is a startup in this space. Yotpo is having great success with helping store owners bring more social traffic and helping them make more sales.

    What are your thoughts on the future of social reviews and how do you see them fit into the social commerce space?

  2. I really liked this post, but I think that there’s another point of view for social shopping. Websites like The Fancy (, Moodyo ( or Opensky ( are building big platforms to promote discussion around products and help consumers at the time of making the best decision at the time of purchasing. Social commerce is not only about individuals or retailers trying to convince shoppers in social networks and converting “Likes” in “Buy”. I think that is more about sharing information between a network of consumers in order to get the best feedback possible.

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