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Social commerce and the OWJO revolution

The Emergence of Social Commerce

Social media has been a game changer for ecommerce strategists. Social commerce has arrived with the mass adoption by the consumer of social media outlets such as Facebook. A recent survey of 135 top US retailers and consumer goods manufacturers by research firm Altimeter Group found that 86% of respondents are preparing to launch some sort of social commerce strategy in 2011. Why are 86% of retailers and manufactures restructuring their business strategies? Quite simply because in August 2010 U.S. internet users spent 41.1 billion minutes on Facebook.

While these figures are compelling in terms of validating the huge footfall that social media sites enjoy, what does it translate to in terms of expenditure? A new report on the social commerce market by business consultants Booz & Company estimates the value of the social commerce market for physical goods alone to be $5bn at present, and set to grow to $30bn within 5 years.

Businesses have become increasingly aware of the impact of social networking websites and the opportunity that now exists to utilise social networking to improve upon existing business strategies and relationships.

Social Commerce has merged the act of socialising and sharing with the act of making informed purchases. It unifies and expands upon social networking and ecommerce. Social commerce allows companies to anticipate, personalise and energise the shopping experience in new ways and benefits from the complex interconnections of social relationships to create new demand generating techniques.

Social Commerce is not only using the social networking sites to advertise or sell products, it crucially allows sellers to have insights into a consumer’s preferences and uses these insights to promote community sharing and tailored offers. These insights are used to personalise what is “suggested” or “recommended” to the consumer not what is sold or advertised. The power has shifted to the consumer and as a result companies can now have a more meaningful communication with their consumers.

As companies develop a relationship with their consumers they can also improve customer service, and utilise the direct involvement of the community in their product assortment, category definition and demand shaping activities. Not only does social commerce change the way we buy online, it changes the way companies communicate with consumers and restructures demand and supply chains.

The following sources were referenced in the preparation of this post:

Cecere, Lora. “Rise of Social CommerceSupply Chain Shaman 15 Oct. 2010. Web 16 Oct. 2010.

Morrison, Scott. “Facebook Sees Social Commerce Reaching Tipping PointSocial Commerce Today. Wall Street Journal, 29 Sept. 2010. Web 16 Oct, 2010.

Horne, Mesha. Hill, Christopher. Oaks, Caroline. “2D-Social CommerceCOSC 311 Fall 2010 Web 21 Nov. 2010.

Marsden, Paul. Booz & Company. “The $30bn Social Commerce Market” 25 Jan. 2011.

Walker, Brian K. Forrester. “eCommerce Platforms, Q1 2009” 27 Jan. 2009


One response to “The Emergence of Social Commerce

  1. grahampenrose February 27, 2011 at 2:13 pm

    Check out the latest posts on

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