The real social in social commerce

November 3, 2011
Posted by: Peter Friedman, Founder, Chairman & CEO

Yesterday I came across Heidi Cohen’s thought-provoking collection of 19 social commerce definitions. While it may seem that 19 definitions is enough, I have a slightly different slant to add to the mix, along with a social commerce hierarchy.
Social commerce is offline or online shopping facilitated by or otherwise involved with social media. For centuries people have liked to shop with friends — or at least share their shopping intent, experience, or results with friends. Social commerce is the application of social media to that dynamic. Our experience has demonstrated that social media can drive substantial increase in transactions. We see 4 levels of social commerce hierarchy:
1) A simple post to coordinate or notify about a shopping experience. Examples include a simple tweet, Facebook status post, Foursquare location check-in, or even text messaging.
2) Product reviews. Though not always truly social in the sense of user-to-user dialogue, the intent to share is there, and sometimes a social thread develops. Examples include Amazon product reviews and Yelp.
3) A conversation. Message forums go here, along with sustained Wall post series, and other such venues, in which a real dialogue occurs related to shopping — before, during, or after the fact. Examples include travel forums, travel booking sites, or topical forums on retailer web sites, such as scrapbooking and cooking.
4) A society of relationships built on the fusion of social media and commerce together. Here, complex people-to-people relationships develop among shoppers, sellers, or both. The community, associated relationships, and in turn, the associated commerce experiences (online or offline) all become a core dynamic of the participants.
Like most aspects of social media, social commerce is less about the features, and less about the direct integration with something else — in this case, transactions. From a simple post on Facebook, to an entire multibillion-dollar social commerce society, it’s more about the underlying people-to-people dynamic.