The future of social commerce

01 Oct 2012  |  Paul Armstrong 

Paul Armstrong, head of social at Mindshare, says the future of social commerce will increasingly take place outside of social networks...

Until recently, most brands' social strategies have focused on getting existing brand advocates to sign up to fan pages on social networks, in the hope that this will increase their loyalty to the brand, or generate earned media among their friends and family.

But this route is getting harder to achieve. Facebook is now making branded earned media less visible in users' newsfeeds, and too many consumers have become acclimatised to liking a fan page for the discounts on offer, rather than out of genuine loyalty.

Developments in the area of social commerce are now enabling marketers to evolve their social strategies away from this world of retention programmes, to potentially more lucrative, acquisition focused approaches.

Working with 'The Hive' (Mindshare's own co-creation community of 300 digital natives) to understand what consumers really want from social commerce, we have come to the conclusion that the future of social commerce will increasingly take place outside of social networks.

There are four reasons for this:

1. Transactions on Facebook itself are unlikely to become a huge opportunity - t he consumer experience of shopping in Facebook Stores has been pretty underwhelming.

There's been no clear consumer benefit to shopping in an environment, which generally offers a weaker experience than shopping on the e-commerce equivalent. Concerns about the security of financial details on Facebook are also surprisingly high given how much information users are happy to share on the platform.

This, coupled with a belief among many users that introducing a stronger shopping element will erode its core socialising purpose, makes it hard to see Facebook Stores becoming a huge opportunity for brands and retailers.

2. Integrating the social graph across platforms is a much more scalable opportunity than F-commerce - Facebook Connect and the Open Graph has brought social data to retailers across the web.

However the challenge is this is too fragmented - too many products and not enough friends mean seeing a friend's recommendation on a product is pretty rare. This challenge will be met by more subtle social signals, wants, haves, needs as well as likes.

We'll move to a world where retailers present customised offerings based on our social graph , rather than rely on the serendipity of a friend 'liking' the same product we're looking at.

3. Social commerce will come to the High Street, but slowly - mobile makes the integration of the social graph with high street shopping a reality. For this to work there needs to be a clear consumer benefit, or 'social utility'.

This could be using social to solve a problem (is this product any good?) or meeting a social need when shopping (I'll look pretty cool if I share that with my friends). However this change is limited by technology and is a bigger behavioural change to make.

4. The Interest Graph presents the real opportunity for social commerce - for all its insight, social data is limited in showing what someone is interested in buying. The interest graph (your connections based on shared interests or passions), generates clearer 'buy signals' to help retailers customise their offers. Interpreting a customer's interest graph and tailoring the shopping experience accordingly, will be the new frontier of social commerce.

Mindshare has developed four key principles that leverage social data, platform integration and the interest graph. These principles offer marketers the opportunity to create social strategies, which are more commercially driven and focus around the acquisition of new customers rather than the retention of existing brand advocates. The principles fall broadly into two categories, offer driven and interest graph driven:


1. Use scarcity and exclusivity mechanics to drive timed sales and hype in a social environment. Use fans to create desire with earned media among non-customers.

2. Create 'social referral programmes' where the customer becomes your affiliate and can be used to acquire new customers.

Interest-graph driven

3. Leverage the social curation trend to drive sales by giving people tools to turn earned media into shopping lists, ie creating 'shoppable' earned media.

4. Combine interest-graph data with actual customer data to create 'lookalike' audiences, based on actual interests, who have a high likelihood to convert to sale. By analysing the trail of interest-graph data from existing customers it is possible to target other users who display similar interests using paid media.

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