Social networking expert, Gareth Mee discusses how online retailers can extend their social commerce strategies beyond the realms of the popular social networking site

Social networking expert, Gareth Mee discusses how online retailers can extend their social commerce strategies beyond the realms of the popular social networking site

Social commerce is billed as being the major ecommerce trend for 2011 and, in the last few months, Facebook has somewhat unsurprisingly manoeuvred itself to the forefront of this, with some even coining the phrase “f-commerce”.

With more than 500 million users, there is no doubt that Facebook offers brands a variety of opportunities for making money, but at the same time, retailers should be wary of relying solely on Facebook as a social commerce (s-commerce) channel.

Gareth Mee, chief executive of recommendations engine and social gateway provider nToklo, discusses how online retailers can extend their social commerce strategy beyond Facebook, harnessing the critical mass already engaged on their own retail stores to avoid becoming beholden to Facebook for s-commerce in the same way that they have to Google when it comes to search.

A new era of online shopping?

“2011 is already heralding the start of a new era of online shopping that is both social and collaborative. Purchasing decisions are increasingly influenced by trusted recommendations and brands are competing based on the value and experience offered on their website,” Mee said. “As the use of social networks continues to become part of our everyday lifestyle, the e-commerce industry increasingly looks to this channel and how it can effectively capitalise on this opportunity. However, with increasing usage comes increasing noise and enabling social discovery with improved content relevance will be important to cut through this.

“The move towards social commerce has intensified, with online retailer ASOS launching a fully transactional Facebook shop in January 2011, allowing customers to buy from its whole range without leaving the social network. French Connection has also announced that it is following suit, however, perhaps retailers should step back and think their social commerce strategy through before putting all their eggs in Facebook’s basket.”

More than Facebook to social networks

Mee said the message here was not to avoid selling through Facebook. He continued: “There is clearly value to be had for brands through the social network – estimations like ‘$30 billion by 2015’ have recently been muted for the value of Facebook commerce [source: Marketing Week]. The issue brands must really consider is that, if they rely solely on Facebook for social commerce, how will they avoid becoming beholden to the social networking behemoth? Reports have recently said that Facebook is demanding a minimum of £50,000 from brands for the Facebook Deals tool [source: Marketing]. Once Facebook stores are much more widespread, brands will become increasingly reliant on this third party and likely powerless to any changes it wants to make.

“A Facebook store may be a very worthwhile investment, but the question is how can ecommerce sites develop their own offerings to capitalise in tandem with this? The thing is, the captive audience for most retailers brands on Facebook is actually very small in comparison to the audience that already exists on their own website. Indeed, many well-known retailers have less than 30,000 fans on Facebook yet may get up to 2 million monthly unique users on their online stores. So why not look to develop a community from the critical mass that already exists, improving customer engagement and user experience in the process?

“Retailers should be looking to bring social elements into their own stores, combining social shopping baskets and personalised recommendations. A global survey from Nielsen Online revealed that recommendations from personal acquaintances are the most trusted form of advertising with 90% of consumers affirming their trust in this. Companies that sell online can differentiate themselves by developing their own communities, which leverage users existing social network connections. This would create a more personal and meaningful experience for customers aiding social discovery and improving the relevance of recommendations.”

Maximising the existing user base

Facebook commerce is an opportunity that has and will prove too attractive to resist for many retailers and there will likely be plenty of money to be made. However, Mee cautioned those that don’t want to be overly reliant on a third party and powerless against increasing charges that could cut into retail revenue, should also be looking to leverage their existing user bases to develop their own sites into social commerce platforms.

“Imagine if users could remain on a retail site but still search for reviews by friends and filter products by friends’ ratings, reviews and purchases. This facility would allow retailers to really harness the power of social media to increase user engagement, retention and sales and drive the social commerce phenomenon,” Mee concluded.