Social Commerce – An impact on purchase decisions?

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Credits Picture: Penn Olson

Some weeks ago, someone said (and please comment here as I cannot access my elder tweets anymore) I might be the next and right expert to thing about social commerce of the future. OK, here we go… brief and based on studies as usual.

Many companies ask themselves if social commerce ist he next big thing and what impact it might have on the buying process of consumers. Let me give you two examples to think about social commerce visions with two of the latest studies that I came across in the last two days.

An optimistic view…
The E-Tailing Group Inc., sponsored by PowerReviews, finds in a research that one in two respondents say they spend 75% of their overall shopping time researching for products (compared to 21% last year). Customer reviews have the biggest impact on the decision to buy: 90% respond reviews have an impact on their decision; 60% say they’re the most important factor.

The report The 2011 Social Shopping Study finds that 29% of shoppers are turning to social networks to research products. However, only 18% of retailers in The E-tailing Group’s annual mystery shopping survey in the fourth quarter of 2010 feature customer reviews on their Facebook pages.

“People are willing to take the time to do research,” she says. “They will do anything to find the right price. (…) Social is emerging as a significant way that some consumers research products (…) The real question will be whether social media is adopted by most younger consumers and become a standard way consumers research products.” Lauren Friedman, President, The E-tailing Group

Some essential findings for social commerce future consideration…
– 59% say they read customer reviews (if on social platforms or not is not quantified)
– 42% access question-and-answer features that allow a consumer to pose and respond a/to question(s) to/of other shoppers
– 26% converse in community forums
– 15% view user-generated videos or create their own video
– 13% access a retailer or manufacturer’s Facebook page
– 9% monitor, respond to, or post tweets on Twitter.

A pessimistic aspect…
A representative study conducted by Havas Media and Lightspeed Research of 1.007 UK social networkers finds that 89% of respondents not having bought anything on Facebook. Above that, 44% of people are not even interested in doing so.

However, if the provider or manufaturer offers some special discount and deals, 77% of respondents are more likely to buy via Facebook shops. And targeting then becomes key: 70% of the people said, they would buy things from Facebook tht were based on their interests and prevous shopping behaviour (so business intelligence and data mining are welcome with consumers it seems). Also Location-Based Advertising (LBA) gets some impact then: 55% would even „check-in“ to a venue or stire via Facebook Places or Foursquare promotions.

Exclusivity is a main factor for social commerce according to the study. One quarter (25%) responding they would purchase a product on Facebook if it wasn’t available anywhere else, 22% make trust in a brand they know dependable on their buyiong process, and 17% said, they would purchase if it was easier than shopping via ecommerce solutions. Even, 11% stating they would buy something that was only offered to ‚fans‘ of a brand.

Brand advocates and brandvangelists are essential. The study shows the power of online recommendations and the influence of friends is essential for socail shopping. If friends recommend a brand, 53% of consumers were more likely to look up information about a brand. 17% were likely to buy from a brand if it was recommended by someone they knew.

And crowd shopping for discounts seems to become a trend. More than half of respondents were interested in getting together with friends to buy products in services in groups. 60% of males finding this opportunity compelling, compared with 48% of women. And women are generally speaking more „neutral“ and „negative“ when they see a brand on a social networking site (83%), according to the “Women & Brands Online: ‘The Digital Disconnect’ Emerges” study, from ad:tech Chicago and Q Interactive’s “Women Channel”. Those same female Internet users responded they were more likely to be affected by coupons and discounts (41.6%).

Spot On!
Social Commerce is evolving to play a bigger role in the purchase decision process. And like in earlier offline ages, it is the social graph (friends and influencers) that make the important difference in my eyes. You buy from those people you trust (if they are the middlemen and know about it, or not). The studies show a clear trend: People, especially men while women being more difficult to affect with social branding activities, buy when they are addressed with the ads of the poeple they know and trust in. Brandvangelists are an essential factor that companies and brands need to consider embracing in their customer acquisition tactics when thinking about the future of their web strategy.

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