Social Commerce

Social Commerce by Definition, a Cupcake or a Bouncing Ball?

Chris TesoChirpify CEO Chris Teso recently weighed in on the social commerce debate by sharing his definition of the term. (Just for the record Chirpify is a social commerce and payments platform for Twitter and Instagram.)

In the opening paragraph of his post, Teso states that the definition of social commerce has changed from recommendations of products by friends that eventually led to sales of said product to link sharing by brands inside social media. With that definition in mind, Teso suggests much of what we call social commerce today is really nothing more than social advertising.

“The problem with this, and previous definitions, is that it’s not actual commerce. It’s merely a link that attempts to redirect one’s attention, and browser, away from a social experience to a traditional e-commerce experience,” remarks Teso. “If a consumer can not pay in-stream on the social network, it’s not social commerce, it’s advertising.”

To him, this has ramifications that apply to conversion percentages, user experience, and data. Not only that, it requires too much of a commodity that is in scarce supply, attention. It also requires too much transactional friction for it to be effective, according to Teso.

His answer definition: For commerce to truly be “social,” it must be in-stream, require few clicks and very little thought on the part of the purchaser. “Instant gratification” leads to more sales, pure and simple.

Teso camps on one major social commerce sticky wicket – data analysis: “[W]hen the social platform is disconnected from the commerce platform there is a chasm the data cannot cross.”

Conversely, it’s much easier to prove a case for social commerce when the social identity of the purchaser is directly connected to the purchase intent, which is what Chirpify enables.

Teso provides this analogy to illustrate his point:

“You’re at a party having a conversation with a friend when a stranger abruptly interrupts and asks you to walk across the street to purchase a cupcake after filling out some brief paperwork. Even though homemade cupcake’s are the bomb, the chances that you’ll do this are minimal…there’s way too much friction involved in the transaction. However, if that stranger was standing next to you, and all you had to say was “gimme”, you’d not only take the cake, you’d eat it too.”

Teso’s argument is well-articulated and convincing, and we welcome his viewpoint. However, at Social Commerce Today we define social commerce a little more broadly as “helping people shop where they socialize and socialize where they shop.”

That portends that commerce can be social whether it starts on an ecommerce website and results in a share of a product purchase on social networks or starts inside social media and results in a sale on an ecommerce site. (Or, to Teso’s point, starts inside social media and stays there.)

Nor is it necessary for commerce to qualify as social based on transactional value alone; other motivations apply. Take, for instance, branded popup shops that, well, “popup” inside Facebook. Here are a few examples:

Heinz “Get Well” Soup – The purpose of this particular shop was to build loyalty among brand fans leading to a propensity to re-purchase and recommend, thereby increasing lifetime fan value. It was not designed to be a revenue generator. (The shop only sold $6900 worth of product.)

Adidas – Its goal was to get products in the hands of fans first (exclusivity) in order to breed advocacy.

BMW Key2Joy – This popup shop sold one item, a “Key2Joy” car key cover to BMW owners and want-to-be owners. The car manufacturer used a popup shop to test whether f-commerce could serve as a means to drive (pun intended) customer loyalty.

Are we to suggest that none of these campaigns qualify as social commerce? If you ask us, yes, they do. If you ask Teso, then probably not.

To Teso’s point, it’s better if the transaction happens in-stream without requiring a customer to exit the hallowed halls of whatever social network they may be interacting on at the time, but I don’t think transactions are the sole metric required to define something as being “social.” It’s just much easier to quantify the sale if it is.

Hopefully, this post sets up the opportunity for a discussion around what social commerce is and what it isn’t. I’ve thrown the ball out there in hopes that some of you will pick it up and toss it around (even if you want to toss it back in my face).

What say ye? How do you define social commerce? Let the ball bouncing (or cupcake eating) begin!

Today’s article is sponsored by Payvment: The #1 Social Commerce Platform

6 Comments Add New Comment

  1. Definition of Social Commerce aside, and given Chris’ position, his position on definition is understandable. The key for brands to remember is that social recommendations, integrated with a purchase experience, can be a great way to drive additional sales. There are a lot of studies that demonstrate that purchases of social users, especially for certain lucrative product categories like electronics and automobiles, can be greatly influenced by their social networks and the recommendations/endorsement from their connections, much more so than reviews from strangers where review integrity can come into question. It is dangerous to focus too narrowly on evaluating “social commerce” initiates based solely on the in stream transaction data, leaving lots of value unaccounted for. Thanks for sharing.

    1. Rick, agreed that the influence of friends has a major impact on purchase decisions. Very often we may know what we want to purchase, but just as often we do not. Add to that something Christian Taylor, former CEO of Payvment said, “Social commerce is all about discovery.” Let’s not forget the serendipitous effect of social on impulse purchases.

      I appreciate the comment and hope others will opine with their own views as well.

  2. What is e-commerce: Buying online. What is social e-commerce: Buying online. The difference between 1999 and today is having to put the three digit security code from the back of the credit card in the paperwork… and PayPal. Buying through the newsfeed, on Instagram, or by tweeting isn’t much more than glorified e-commerce. Today’s ‘monetization of the social web’ problem is much more than payments. IMO, there is currently no example social e-commerce – it’s just e-commerce. Chirpify is moving in the right direction and these bases need to be covered. Props to Chris and his team!

    1. Thank you Mike for stepping up. I was hoping the post might engender more dialog about the issue. Alas, you and Rick were kind enough to address my challenge. Your viewpoint is very clear and much appreciated.

  3. Social media is undeniable, and the possibilities for raising capital and creating new revenue streams for business are here and in full effect. Creative Loot Inc. is another example of how softwares that provide a service, are now allowing users to transact at the point of impression. Seamlessly. This technology brings the storefront right to the newsfeed of Facebook and other networks. For big or start up brands.. this is change everything.

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