Smart, Social and Satisfying
The Future of Shopping in the Age of Social Commerce
- Girish Gopalakrishnan
For a trend that came into existence only recently, social commerce has gained unprecedented
momentum and is transforming the market dynamic beyond recognition. As social commerce
evolves to encompass new tools and channels and ideas, it is reshaping the act of buying and selling.
The union of commerce and the Internet had its beginnings in corporate websites with companies
putting up information on their products and services, vision and mission, and history and
management. The era of Web 1.0 saw one-way communication; if customers and investors needed
information they went to the website to gather data. In this scheme of things, the company was the
gate-keeper, controlling the messaging and thus the projection of its image. While selling of products
made its way to the Internet as e-commerce made its presence felt, the dialogues about companies
and their offerings we participate in today were absent.
Even as e-commerce took off, we saw the advent of Web 2.0 technologies. Ratings and reviews,
video sharing, wikis, forums, blogs, and social networking facilitated interaction among users as
peers discussed, critiqued, and recommended everything they saw, did and consumed. These
conversations transplanted real-world social interaction into the virtual world as friends, who were
sharing shopping opinions face-to-face, moved online. The more consumer behavior changed, the
more it remained the same.
This is the age of social commerce, as social networks and shopping processes intersect online. While this
paradigm shift is creating challenges for companies, it is also offering a range of opportunities.
Businesses can leverage social media to understand their customers, learn about their behavior,
demands, desires, and motivations. By its very nature, social media allows companies to engage
buyers through multiple tools. Buyers use these tools for social interactions, which help them make
purchase decisions and attract their friends, thus fostering brand loyalty.
However, the social commerce story does not end here. As technology advances to keep pace with
buyer demands, sellers can implement new social commerce tools and models to satisfy customers,
create advocates and generate sales. To better understand how social commerce will enable
business, let us examine how it helps sellers and draw an evolutionary roadmap of social commerce.
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Buyers and Sellers
With an explosion in Web 2.0 technology, customers
have a powerful avenue to communicate, gather
information, and make transactions. The rise of social
media has given them a ready forum where they can
learn, participate, express opinions on products and
services, and influence peers before they purchase.
According to a recent survey, 42% of online consumers
say they have used social media services to evaluate
products or to find deals. 58% of the 1,787 adult online
shoppers surveyed said they follow companies through
social networking sites to find deals, while half (49%) say
they want to keep up to date on products. (1)
Not only do users share purchase information but
they are also influenced by the persuasive buzz of
that information. According to a study, 83% of online
shoppers say they are interested in sharing purchase
information with people they know and 74% of online
shoppers get influenced by friends’ purchase history.
(2) Moreover, 71% of people say they trust reviews from
friends and family members and 45% of people trust
reviews from friends and people they follow on social
networks. (3) As a result, businesses are facilitating these
interactions through their ecommerce websites and
through social networking sites.
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The sphere of influence buyers exercise over their peers in the online world is a natural
corollary of the social nature of shopping, wherein buyers enjoy social interaction as they
engage in the act of purchase. Buyers trust people who are like them - fellow buyers who
fit a similar profile and peers who are friends. Online retail benefits most when it lets the
buyer interact with such people. With social commerce enabling such social exchange in
the virtual world, buyers can make better - and more pleasurable -purchasing decisions.
For sellers, in turn, social commerce offers a unique opportunity to increase sales by
enabling increased traffic, improved conversion rate and better average order value. Let’s see
how that works.
Businesses can understand their customers through social commerce, learning about their
likes, demands and motivations. Earlier, the expression of interest in a product or a service
was an explicit act. Today, with the advent of intelligent social commerce solutions that
study and understand customers through their peer interactions and transactions, sellers
are capturing implicit shopper preferences and interests. Sellers know what products
buyers view, what category they are interested in, what they search, and what products
they share with peers. A seller knows what the buyer wants without the buyer expressing
herself in an overt manner. Thus, the seller can leverage the information to drive targeted
products to shoppers. This ensures a higher probability of converting them into buyers and
increasing their overall order value.
Moreover, as peers recommend products, sellers gain information they did not have access
to earlier - knowledge of potential purchase behavior. For one, a peer’s recommendation
helps a buyer decide on purchasing a particular product when she is seeking information
to help decide on the product to buy. Additionally, if a person gains information on a social
networking site that a friend has bought, say, a particular mobile phone, the knowledge
may induce the need for the same product even if the buyer had no inclination to purchase
Therefore, sellers need to enable and are enabling social interaction on their websites,
encouraging existing buyers to interact with friends and recommend products. This helps
attract friends of buyers, and help convert them into buyers. The seller can gain indirect
access to the buyers’ friends network and set in motion a multiplier effect on site traffic.
However, the type of interaction promoted by the seller needs to be focused, determined by
the type of product being sold. Thus, a grocery chain need not enable the same type of
interaction, as say, a manufacturer of consumer durables. For, a person may not seek the
opinion of peers when buying provisions but may need active input from friends when
purchasing a high-consideration item like an LCD television.
Information gleaned from such interactions contains a lot of insight that can be leveraged to
effectively promote targeted products and serve customers. As your business gains greater
insight into the drivers of customer behavior, this helps attract more buyers, satisfy customer
requirements, and increase conversion rates and dollar spend.
Above all, happy customers help build brand loyalty and create brand advocates. Prospects
become customers and existing customers visit and buy again, and promote your products
among peers. This implicit advocacy has a multiplier effect on traffic as your buyers bring their
friends to your business, creating a loyal community for your business and giving an impetus
to the virtuous cycle of buying and selling.
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In this, the age of instant and individualized
gratification, customers are always asking
for more: personalized products, greater
responsiveness, and convenience. Satisfying their
desires is paramount for sellers in an era of hyper-
competition and low margins.
Sellers are steadily gaining greater insights
into individual customer behavior, interest and
preferences through social commerce tools by
understanding social interactions and online
social shopping patterns. Thus, they will be able
to offer appropriate products and sell the right
product to the right customer at the right time
- meeting specific requirements. As technology
evolves, it will play a critical role in enabling the
seller to understand and, thus, satisfy the buyer
through social commerce. This can make online
shopping a much more immersive, customized
and intuitive experience than what we are used to
at this point in time. The effects of improving the
online shopping experience can lead to increased
consumer loyalty, greater conversion rates,
enhanced customer satisfaction, repeat business,
and higher profits.
The buyers’ need for customization and
convenience and the ability of the seller to fulfill
the same through social commerce tools will
define the way forward for the online shopping
experience. Over the next one to three years,
buyers are likely to be able to interact with peers
within the ecommerce site, without detaching
from their purchase activity to fulfill their need for
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With technology allowing greater customization of products
at a reasonable price, in the future buyers will be able to design
products - such as apparel or jewelry or furniture - online, connect
with their friends online through the site to get their opinions and
inputs, and place an order for a truly unique product.
The device that will possibly enable the greatest customer
satisfaction in the age of social commerce is the mobile phone.
As the reach of the always-on mobile phone spreads, it is also
revolutionizing the way the always-connected buyer shops. With
almost five billion connected by cellular telephony, this is a device
companies can ignore only at their peril. Offering the convenience
and speed of on-the-go shopping to customers who are often on
the move, it is expected that in 2015, $119 billion worth of goods
and services will be purchased via a mobile phone. (4)
As smart phones supporting social commerce become more
commonplace, the mobile device will ensure that its user is aware
of her peers’ purchase activity instantaneously through alerts
without having to log in to a site on a computer. Location-based
apps in the buyer’s social network can inform her about sales and
events specific to the area in which she finds herself.
Far from being a rational economic transaction involving buyer
and seller, shopping is an emotional activity evoking a positive
state of mind in the shopper. To attract and retain customers,
sellers are giving paramount importance to creating a pleasurable
experience for shoppers. As people like to interact with peers when
shopping, sellers will, in the near future, replicate the experience of
shopping in a real-world store by enabling satisfying and effective
group shopping activities through Web 2.0 technologies.
Brick and mortar stores have been tapping the power of collective
buying through sites like Groupon. As technology allows it, online
sellers will start leveraging the power of social commerce. This
will include both co-shopping and group buying activities. In the
former, technology enables people at different locations to shop
together online - seeing the same product, communicating with
each other and sharing opinions, thus mimicking a real-world
shopping experience. Group buying refers to the capability to
purchase a product jointly in an ecommerce site, discuss, share
ideas and purchase the product through individual contributions.
Thus, in the near future, an engaged online shopping website will
give shoppers the option to interact with friends over varied devices
and purchase products. This has the added advantage of giving
sellers an insight into customer opinions and behavior, allowing them
to further improve the online shopping experience by enhancing
customer satisfaction levels.
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Five Years On
Intelligent Devices, Informed Sellers
As social commerce becomes smarter with the application of
advancing technology, sellers will be able to gain customer
information from beyond their ecommerce site. Perhaps five
years down the line, sellers will be able to learn about the
buyer’s preferences, interests and community from their
interactions on other sites and from intelligent devices. All
aspects of a buyer’s digital life would be connected to every
other aspect. As a result, the targeting of products and
services will be much more focused and intuitive.
Soon in the future, sellers may be able to get information
related to a buyer’s interaction - across multiple devices
- with a particular brand/product. Through enhanced
intelligent applications and customer information-sharing
standards, a seller can gather information about customers
even without the latter having visited the seller’s site.
In addition to having better and focused information about
existing customers, sellers will have information about
buyers who are not yet their customers. Such information
can help sellers target and contact buyers proactively with
customized products, allowing them to increase sales.
1. 2011 Social Commerce Study,
Social commerce no longer inhabits the land of theory and supposition. It is a by Shop.org, comScore and
market reality that is driving the future of buying and selling. As sellers are better Social Shopping Labs
able to plot their buyers’ interests, profiles, and friends, the brave new world of 2. Manage Smarter survey,
social commerce allows them to offer targeted products, satisfy their customers, September 2009,
attract their friends, and generate loyalty.
3. Speak Now or Forever Hold
The information sellers can glean about customers through their social Your Tweets, Harris Poll, Harris
commerce interactions and transactions will ensure that in the matter of a few Interactive
years, we as buyers need not search for products. Instead, the products will find 4. Mobile commerce to grow to
us. Even as social commerce increases the challenges found in the marketplace, it $119bn by 2015, ABI Research
provides a means to build customer satisfaction and loyalty - both of which are
very elusive and valuable for the seller.
About the Author
Girish Gopalakrishnan works as a Product Manager within Infosys’ Business Platforms team. He has experience in social media products
for enterprises related to communities, widgets and mash-up. He was instrumental in conceiving the idea and also developing the
social commerce product for the InfosysEdgeTM platform.
He has overall industry experience of around 10 years, with more than half of it in the product management space. His product
management domain experience range from personal finance to social media. He holds a bachelor degree from The National
Institute of Engineering, Mysore and an MBA from Indian Institute of Management, Calcutta.
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© 2012 Infosys Limited, Bangalore, India. Infosys believes the information in this publication is accurate as of its publication date; suchinformation is subject to change without notice. Infosys acknowledges the
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