It’s been six years since Twitter almost single-handedly introduced the concept of social media to the Internet. And six years and much fanfare later, there remains much debate about whether social media’s first cousin—”social commerce”—produces any meaningful ROI.
I’m here to tell you: social commerce works. If there is any debate on this subject, it’s likely for two reasons: 1) no one has figured out how to measure the esoteric and sometimes vaporous impact of tweets and likes on buying behavior, and 2) we focus too much on social media tools and not enough on the underlying rudiments of human social behavior.
Which is to say: Twitter is not a “social commerce” engine. Nor is Facebook. They are simply vast ecosystems designed to capitalize on the basic human desire to interact and learn.
Regardless, let’s not forget: all commerce is social.
Why is that, you ask? I’ll explain in a moment, but first some context. The world of retail has become so massive and overwhelming that we now see the emergence of concepts such as the so-called Toothpaste Trance, a phenomenon in which a preponderance of choice drives a consumer to pick certain products at random. This would be funny if it weren’t actually such a huge problem.
Product categories are evolving so rapidly that the average buyer has little hope of keeping up with even one category—much less the entire marketplace of things a person can eat, drive, wear or plug into the wall. So where does a consumer turn to navigate the maze of knowledge? Other consumers.
This is, in its most basic form, social commerce.
Where does a consumer find other consumers? Sometimes in the old ways: talking to a neighbor over a fence or asking a family member at Sunday dinner. But increasingly they’re finding each other on the Web. Sometimes these connections are made via Twitter or Facebook. But these connections are being made in all sorts of places—for example, in the product reviews on Amazon or in the comments section of a personal gadget blog.
Point is, people are talking about products, reading about products, debating about products. Every day. All over the Web.
When today’s consumer initiates a buying decision, whether large or small, they will most likely seek out the opinion of another person on the web. According to Bazaarvoice, 70 percent of Amercians say they look at reviews before taking the next step toward buying. Similarly, eConsultancy reports that 70 percent of consumers trust the opinions of people they don’t know.
This is social commerce in action.
So back to the original question: can online sellers wring ROI from Twitter or Facebook? Well, depends on how you track ROI and how clever you are in exploiting the strengths of social networks. For all their warts and limitations, there’s no denying the reach of Twitter and Facebook. If the average online seller is strategic and patient and acknowledges the limitations of each social network, there is little doubt they will see a return on their time. How much, and at what cost, is something each seller needs to evaluate on his or her own.
But make no mistake: commerce is fundamentally social in nature. Find out where your customers live, then go there and talk to them.