How can brands and retailers make money from social media?
Social Commerce, the fusion of social media with e-commerce, may just be the solution. With the mainstreaming of social networks, brands are establishing storefronts on Facebook, tweeting deals on Twitter, linking to social shopping sites, and integrating social media tools into their e-commerce platforms. And they are seeing impressive returns.
With insights from consumer psychology and the experience of brands including Adidas, Apple, Burberry and Levi's the white paper "Social Commerce: Monetizing Social Media" by Dr Paul Marsden, social media strategist of Syzygy Group, provides an introduction to the emerging trends of social commerce and social shopping; what they are, how they work, and why they should be part of your digital marketing strategy.
Table of Contents
02 EXECUTIVE SUMMARY
03 INTRODUCTION: SOCIAL MEDIA SNAKE OIL
04 SOCIAL COMMERCE: AN ANTIDOTE TO SOCIAL MEDIA SNAKE OIL
04 SOCIAL COMMERCE DEFINED
07 WHY SOCIAL COMMERCE?
09 SIX DIMENSIONS OF SOCIAL COMMERCE
13 WHERE TO START: LEAD STRATEGY
14 MEASURING SOCIAL COMMERCE SUCCESS
15 FROM TOOLS TO STRATEGY: BRAND BUILDING WITH SOCIAL COMMERCE
15 THE SOCIAL PSYCHOLOGY OF SOCIAL COMMERCE
21 CONCLUSION: FUTURE TRENDS
22 SOCIAL COMMERCE RESOURCES
Objectives and Core Themes
The primary objective of this publication is to provide a strategic framework for businesses to move beyond experimental social media marketing by effectively monetizing social media through the integration of e-commerce. It addresses the transition from hype to practical business application by exploring the fusion of social interaction and online purchasing.
- Defining social commerce as a distinct subset of electronic commerce.
- Categorizing the six primary dimensions of social commerce tools.
- Implementing a structured LEAD (Listen, Experiment, Apply, Develop) strategy.
- Leveraging social psychology and universal heuristics to shape consumer choice.
- Aligning social commerce initiatives with business performance metrics like ROI.
Excerpt from the Book
THE SOCIAL PSYCHOLOGY OF SOCIAL COMMERCE
The essential social psychology of social commerce is simple; social commerce harnesses the human capacity for social learning; learning from the knowledge and experience of others we know and/or trust. This social learning faculty is part of our social intelligence, the ability to understand and learn from each other and profit from social situations.
Now the relevance of this to social commerce is that social psychology, the branch of psychology that deals with how people think about, influence, and relate to one another, has found six universal biases in our social intelligence - making certain decisions - including purchase decisions - more or less likely.
In a nutshell, social intelligence works through a mental process of ‘thinslicing’ - a style of thinking (psychologists call it heuristic-thinking) that involves ignoring most of the information available, and instead using (slicing off) a few salient information cues, often social in nature, along with a set of simple, but usually smart mental rules of thumb (known as heuristic) to make intuitive decisions.
The opportunity for brand-led social commerce is to harness one or more of these social intelligence heuristics to build choice-shaping associations that make purchase decisions more likely.
Chapter Summaries
EXECUTIVE SUMMARY: Provides a high-level overview of social commerce as the fusion of social media and e-commerce, outlining key business benefits and psychological drivers.
INTRODUCTION: SOCIAL MEDIA SNAKE OIL: Discusses the transition of social media from inflated marketing expectations toward a more grounded, results-oriented business reality.
SOCIAL COMMERCE: AN ANTIDOTE TO SOCIAL MEDIA SNAKE OIL: Explains how focusing on the monetization of social media through e-commerce provides the necessary business foundation for long-term value.
SOCIAL COMMERCE DEFINED: Establishes a formal definition of social commerce as a subset of electronic commerce that leverages social interaction to enhance the online purchasing experience.
WHY SOCIAL COMMERCE?: Analyzes the benefits from both business and user perspectives, including trust, utility, and the acceleration of the customer journey.
SIX DIMENSIONS OF SOCIAL COMMERCE: Categorizes social commerce tools into six distinct toolsets, ranging from Social Shopping to Social Ads & Apps.
WHERE TO START: LEAD STRATEGY: Outlines a practical, four-step roadmap (Listen, Experiment, Apply, Develop) for businesses entering the social commerce space.
MEASURING SOCIAL COMMERCE SUCCESS: Explores metrics for evaluating success, comparing ROI with reach-based and reputational measurement techniques.
FROM TOOLS TO STRATEGY: BRAND BUILDING WITH SOCIAL COMMERCE: Highlights how social commerce can be used strategically to influence brand perception beyond immediate transaction metrics.
THE SOCIAL PSYCHOLOGY OF SOCIAL COMMERCE: Details how human social intelligence and six specific heuristics can be leveraged to drive predictable consumer behavior.
CONCLUSION: FUTURE TRENDS: Identifies emerging trends, such as sCRM and Curated Social Marketplaces, that are shaping the future of the industry.
SOCIAL COMMERCE RESOURCES: Provides an extensive list of relevant platforms, blogs, and industry reports for further research.
Keywords
Social Commerce, E-commerce, Social Media, Monetization, ROI, Social Shopping, Ratings & Reviews, Social Intelligence, Heuristics, Brand Building, Consumer Behavior, Customer Journey, Digital Strategy, sCRM, Social Media Optimization.
Frequently Asked Questions
What is the core purpose of this work?
The work aims to provide a business-focused framework for monetizing social media by integrating it directly with e-commerce, moving beyond superficial engagement metrics.
What are the primary themes discussed?
Key themes include the technical definition of social commerce, strategic implementation via the LEAD approach, measurement of ROI, and the application of social psychology in digital retail.
What is the ultimate goal of the research?
The goal is to help marketers and businesses establish a hard business case for social media activities by facilitating more effective online purchasing through social interaction.
Which methodology is proposed for adoption?
The book proposes the 'LEAD' strategy, which stands for Listen, Experiment, Apply, and Develop, to help firms navigate and scale their social commerce initiatives.
What does the main body cover?
The main body covers a thorough breakdown of the six dimensions of social commerce and analyzes six social intelligence heuristics used to influence purchase decisions.
Which keywords characterize the work?
The work is characterized by terms such as social commerce, ROI, social intelligence, heuristics, and brand-led strategies for digital environments.
What role does the "Technology Hype Cycle" play in the introduction?
It illustrates how expectations around social media marketing in 2009 were inflated and explains the industry shift toward the "Slope of Enlightenment" in 2010.
How do the six universal heuristics function?
They act as mental "shortcuts" or rules of thumb (like Popularity, Authority, or Scarcity) that consumers use to make quick, intuitive decisions in the face of uncertainty.
What is the significance of the "3Rs" in measurement?
The 3Rs (ROI, Reputation, and Reach) represent the primary framework for evaluating the effectiveness of social commerce, with ROI being highlighted as the most critical for business justification.
What are the "Future Trends" mentioned for the industry?
The author highlights sCRM (Social CRM), Mobile Social Commerce (incorporating augmented reality and QR codes), and Curated Social Marketplaces as the next frontiers.
- Quote paper
- Paul Marsden (Author), 2010, Social Commerce (english), Munich, GRIN Verlag, https://www.grin.com/document/146286
