Why Social Commerce Matters

Sid Gandotra
Sid Gandotra SEO Specialist | Search Engine Optimization, Eminence Consulting LLC.

Posted on November 6th 2012

Why Social Commerce Matters

Social Commerce

Social commerce is a subset of electronic commerce that uses social media that supports social interaction and user contributions, to enhance the online purchase experience. Believe it or not, it is also an increasingly popular solution for monetizing social media marketing, the online promotion of products and services using social media.


Why Social Commerce?

Here are some of the key benefits that Social Commerce offers to businesses and users:

  • Marketers can measure the business value of social media marketing directly by making social media marketing an independent variable and e-commerce sales the dependent variable.
  • Social commerce can drive traffic volume, improve conversation rates and increase average order value for online retailers.
  • Social Commerce provides businesses the opportunity to create new revenue streams by curating and extracting value from social media content.
  • By facilitating social interaction and user contributions on e-commerce related sites by empowering the users i.e. by allowing these users to post reviews and star ratings actually builds trust in the long run.
  • More specifically from a customer perspective, social commerce can enhance their journey from need recognition and product discovery through product selection and referrals.

The 6 Key Dimensions to Social Commerce Success

Social Proof: During the new customer journey, a consumer may find themselves at a point of indecision. When consumers are uncertain of what to do next, social proof kicks in to see what others are doing or have done.

Authority: Authority in social media is not only related to commerce, but it is the very source of how the expansion and contraction of social networks around common interests and events take shape. Authorities have invested their time and resources in earning a position of influence and their reward for doing so is a community of people who place trust in their recommendations.

Scarcity: Driven by the fear of loss, consumers are driven by the ability to participate as members in exclusive deals. Part affinity, consumers have expressed that the ability to have early access to offers and promotions is a top reason to connect in social media.

Like: There’s an old saying in business, people do business with people they like. And, nothing is truer than that statement in social media.

Consistency: When faced with uncertainty, consumers tend not to take risks. Rather, they prefer to stay consistent with beliefs or past behavior. When these do not line up in the decision making cycle, consumers tend to feel true psychological discomfort.

Reciprocity: As human beings, we have an innate desire to repay favors to maintain a balance of social fairness whether or not those favors were invited. Perhaps the greatest asset in social capital is that of generosity. Those who invest in helping others will earn something greater than a reaction; they will earn a repository of reciprocity.

It is the understanding of the 6 dimensions of social commerce that facilitates the development of a more cohesive and connected online experience for customers. By investing in the value, productivity and efficiency of consumer decision making and not just the outcome, businesses can earn reciprocity, goodwill and social capital as a result and not to mention that is something priceless.

I want to thank all of you for taking out the time to read this article.

Sid Gandotra

Sid Gandotra

SEO Specialist | Search Engine Optimization, Eminence Consulting LLC.

Since 2012, Sid has been instrumental in helping entrepreneurs save time using laser-focused strategic marketing methods to grow their business. A clear communicator with a background in marketing, Sid has a passion for optimizing websites to achieve business goals and a talent for improving organic search engine rankings with his creative approach and thorough research and analysis. His area of expertise is developing SEO campaigns, search engine rankings, link-building, competitor analysis, keyword research, social media marketing, pay-per-click campaign management, and analytics.
• Search Engine Optimization
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• Social Media Marketing Strategy and Implementation
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Suresh Suri
Posted on November 12th 2012 at 7:09AM

Informative article on social commerce and how it uses social media to enhance online business. There is a whitepaper on social CRM I just read that readers would find interesting it gives valuable inputs on how to connect with customers more effectively @ http://bit.ly/UDUptM

Sid Gandotra
Posted on November 12th 2012 at 11:07AM

Suresh, Thank you for sharing the whitepaper with us. It is informative and efficient.

Posted on December 16th 2012 at 11:30AM

How much of an effect do you think Solavei will have in the Social Commerce industry? I'm a member but the whole idea of Social Commerce is pretty new to me.