I was recently having an interesting debate with Dennis Schaal on the Tnooz Skype chatroom.
He was berating me (in good nature I hasten to add) for equating an experiment for what I believe is social commerce and he sees as social media spam.
So what is social commerce? The definition is still somewhat elusive, but let me use the following from Wikipedia:
Social commerce is a subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services. More succinctly, social commerce is the use of social network(s) in the context of e-commerce.
The market for ecommerce services in the USA has grown - and it is probably one of the most mature markets in the world. It is usually seen as the leader and innovator of the retailing trends.
That said, share of eTailing is still relatively small at 5.8% of the total.
Now there is a HUGE caveat as the area covered does not include travel. Social commerce is even smaller, barely a blip on the radar at the moment.
According to eMarketer's briefing last week from their chief analyst, Jeffrey Grau, there are three key drivers in ecommerce (in the broad categories with the exceptions which include such things as event tickets and travel) as follows:
- Mobile commerce
- Social commerce
- Daily deals
In examining these the emergence of social media is the one that will drive fundamental change and is the most important of the three.
Jeffrey cites a Booz & Co (Formerley Booz Allen Hamilton) study Turning Like to Buy, including this key chart:
The emergency of social commerce clarifies the picture and relevance of social media to the left brain.
To me social media is just the medium. It is the transport layer. The social interaction – the social web, the community - and addresses more of the right brain issues we face.
This is where it gets confusing because we have been using social media to describe both the medium and the interaction.
Now, with the emergence of a commercial side to the nature of social media, we clearly need to distinguish between the elements and the interactions.
Social commerce is as fundamentally different from conventional commerce as the web ecommerce was from physical and conventional in-person commerce.
It has different characteristics. It is the next generation of commerce. Social commerce represents the first time that we are seeing true value-oriented ROI in social media.
And now we have anecdotal and niche sections where social commerce is working.
One of the best examples in travel is the use of social media tools like Twitter for customer service – eg. @DeltaAssist. I believe that the broad category of viation, travel and tourism will emerge as the leading categories in social commerce. Indeed its probably already there.
So to Schaal and everyone else. This is the future. Embrace it.