The growth of social media and the emergence of social commerce
Social media plays an enormous role in all facets of modern life. With over a billion social media users worldwide, and over 900 million users on Facebook alone, social media has become a must for any company interested in engaging with their audience. Individuals rely on it to make decisions: according to Buddy Media founder Michael Lazerow, social media influences 90% of purchasing decisions. With electronic commerce on the rise, social commerce has emerged as a way for companies to achieve ROI through social.
Image 1: Social media is everywhere you look
What is social commerce?
Social commerce has multiple definitions, but at Moontoast we stick to the core premise: commerce that takes place in the social space. To succeed, companies engaging in social commerce must leverage both their own social networks and the networks of their customers. Social commerce includes consumers in the selling process, allowing people to share their opinions and purchases with others in their network, and ultimately creating a more effective sales channel at a lower cost.
Image 2: Consumers make more effective salespeople than companies
Despite holding the position of largest social network, Facebook does not currently provide the most effective channel for increasing sales. While some companies like Starbucks and American Express have been able to generate brand interest through their Facebook presence, Facebook was created as a consumer-to-consumer platform. One way companies like Eventbrite have managed to increase revenue using the social giant is through having customers share their purchases organically, rather than paying for ads or sponsored stories.
To further engage with fans in the social space, other brands have started conducting the entire sales process within the Newsfeed or other social channels. As we mentioned in our eBook, The Social Commerce Opportunity, placing messages in a highly visible space and limiting the number of steps in the transaction leads to better results: one company was able to increase conversion rates on Facebook 300%!