E-commerce merchants are no strangers to social media, but the involvement of social networks in the sales process has deepened over the last couple of years. Social networks want to keep users within their ecosystem rather than sending them to external eCommerce stores. To make that possible, all the major social networks have introduced direct purchase technology to their platforms.
In many ways, that’s great for retailers and customers: retailers leverage the massive audience and network effects of social media platforms, and shoppers can buy in a couple of clicks without ever leaving their favorite corner of the internet. But for retailers, there are also potential drawbacks — it implies giving up a lot of control over the sales process.
For over a decade, canny eCommerce retailers have used social networks to promote their products, both through paid advertising and the creation of compelling content that helps build an audience and garner shares. But the end-goal of social commerce was always to move shoppers from the social network to a dedicated eCommerce site for the final purchase.
With the introduction of Twitter’s Buy Now button, Facebook’s Buy Button, and Buyable Pins from Pinterest, among others, the dynamic has changed. The entire shopping experience, from promotion to sale and post-sale interaction can take place on the social network. A dedicated eCommerce store becomes almost superfluous.
The benefits for social networks and their customers are clear. Social networks inch closer to their goal of eating the internet. Shoppers get a shopping experience that is often superior to that offered by eCommerce sites. And retailers themselves benefit from a huge pool of happy customers.
It’s not all good news for eCommerce retailers though. As publishers have discovered to their cost, a reliance on a third-party platform for revenue isn’t always rewarding in the long-term, even if there are clear short-term benefits. A substantial proportion of eCommerce sales are generated through cross-selling and upselling. Merchants have developed both to a fine art. Suggesting the right products to customers at the right time can enhance average cart values by a huge margin.
But to leverage those benefits, eCommerce retailers need to control the shopping experience and the data it generates. That’s not easy on a third-party platform like Facebook, where the interface and data are entirely under the control of a third-party. Facebook is interested in giving its users an experience that benefits Facebook. That’s not always in the best interest of eCommerce retailers.
I’m not a critic of social commerce in its current form. I’m excited in particular by the development of instant messaging eCommerce. Facebook users recently gained the ability to make purchases within the Messenger app. The company’s bot platform has been enthusiastically embraced by retailers. And that’s all good: the more channels we can sell into, the better it is for eCommerce.
But I do want to inject a note of caution. The big social network platforms could easily eat the lunch of small retailers with a tweak to advertising or content algorithms. The only way to be truly independent is to maintain an eCommerce storefront over which you have complete control.
BY GRAEME CALDWELL