With the holiday season just behind us, it’s easy to forget that what is commonplace behavior now- bookmarking wanted items onto wishlists to share with friends and family, or using Twitter to give and receive product recommendations both spontaneous and prompted- were only just beginning to blossom five years ago.
The new year is the time most businesses write up their reviews of the past year and put together their predictions for what’s coming next. These reflections and predictions don’t have much weight without context, however, and that’s what we aim to provide here: A brief history of social commerce that can hopefully shed more light on why everything that worked in 2013 did so, and give us a better foundation for looking ahead to 2014. As social platforms become more integrated into our lives, social commerce becomes something every company must address, if only from a support perspective.
Social Commerce in 2008
The term “social commerce” was actually first introduced on Yahoo in 2005, but it wasn’t until three years later, in 2008, that it really began to build the foundations of what we recognize now as modern social commerce. 2008 was the year that expectations and suggestions around social media and e-commerce started to actually become business practices. However, the thinking was that social platforms were only good for increasing brand awareness and general marketing; the potential for revenue remained unrealized. Most companies thought of social ventures as a bonus activity, and not a requirement for success. (x)
In 2009 as new technologies become ubiquitous- Twitter, smartphones- online and offline shopping begin to blend together more. Companies take notice of their customer’s changing behavior and build communities for them to interact and share information in. (x)
An argument grows about what exactly social commerce is: A revolution from e-commerce, or an evolution of it? Others argue that social commerce is something that shoppers do together (social shopping) while e-commerce is businesses being in a social space together. (x) This debate will continue to evolve over the next several years, without a final clear answer (though currently e-commerce and social commerce seem to be used pretty interchangeably with the term social shopping being differentiated).
2010 found social commerce really beginning to pick up steam around the world– however marked cultural differences become clear between those who turn to social outlets for shopping in order to save money, and those who come primarily for the fun, social aspect of it (x). An all-encompassing global strategy therefore isn’t going to cut it; brands wanting to engage in social commerce will have to develop targeted, regional approaches.
Group buying endeavors like the aptly named Groupon hit their heyday in 2010, and Facebook begins to turn a real profit, getting skeptics seriously excited about the future possibilities with social commerce. Twitter users follow brands for deals and are often motivated to click through to a site where they can make a purchase, but a click-through doesn’t guarantee a purchase and shopping cart abandonment is an issue. Consequently, this is also the year that stores work harder via social to retain customers and keep them coming back to the physical store to shop (x).
Pinterest, launched in 2010, sees explosive growth in 2011. Its image-based design with easy click-throughs to sources makes it perfect for showcasing products. Facebook gets its own term for social commerce on the platform: F-Commerce. Options range from built-in storefronts that lead off-site to make purchases, but that include varying levels of social engagement (“ask a friend” about a product, for example) to complete in-Facebook purchasing with companies like 1-800-Flowers. The future of F-commerce is uncertain, but seems promising if some kinks- like having to go off-site to complete purchases- can be ironed out.
A lot shifts as e-commerce picks up steam in conjunction with social platforms, from 2011 onward. F-commerce sees decline from clumsy design; big stores like Gap, Nordstrom and J.C. Penney close their Facebook shops. A few tweaks could revitalize F-commerce, however, since Facebook’s core user group remains loyal and users still consult their social networks when shopping.
Pinterest continues to gain market share (possibly in part due to its long tail sales cycle), but may have a solid challenger in relative newcomer Polyvore, a social commerce site that allows users to build “sets” to express their style, then buy. Other platforms- like photo sharing site Instagram and blogging site Tumblr- begin to experiment with advertising, which may eventually lead to e-commerce efforts. Google+ has potential too, from the sheer size of the user base and potential SEO benefits.
With the “Internet of Things” fast approaching on the horizon, 2014 looks to be the debut of things such as t-commerce, or buying H&M underwear via your smart TV during the Super Bowl. What about Twitter commerce; shouldn’t that be t-commerce? In 2013, Twitter hires its first Head of Commerce to help enable shopping directly via its 140-character posts.
Overall, online retail is only expected to grow, with Forrester predicting sales of $370 billion by 2017. Increasing portions of the population use the mobile and tablet devices they use for social platforms to shop as well, which reinforces the idea of growing social commerce. It will be interesting to see how quickly being able to buy something directly from whatever platform- or object- you happen to be using becomes ubiquitous, and whether one platform or object will be able to rule the lion’s share of the social commerce field.
So, with all of that, what are your predictions?
Note: The Evolution of Social Commerce: The People, Management, Technology, and Information Dimensions by Chingning Wang & Ping Zhang (pre-publication version)- was a tremendous help in forming the basis of this research, especially in the summaries of the years before 2010. Paragraphs and sentences built from its ideas have been marked and linked (x).