Defining Social Commerce: A Tale of Three Conversations

Just stumbled across an article from Read Write Web looking at Social Shopping, Social Marketing and Social Trading, however I’m going to focus on the Social Shopping aspect.

Both from the writer’s and my own anaecdotal evidence there is a slow but emerging shift away from conducting your own research on the net, to asking for the recommendations of friends on Facebook and Twitter.

Here are two fairly recent examples from my friends:

This is leading to two new elements emerging in the commercial equation: impulse and serendipity.

As people chimed in and the conversation took shape, a few friends who hadn’t really been looking for camcorders became interested and purchased the same model I brought

This emerging trend can be seen in these two graphs, first from over at businessinsider.com  and the second from Pew

For some media and commercial sites social networking sites have overtaken Google for referral traffic, and for a number of large mainstream news organisations (CNN, ABC News, Huffington Post) Facebook is providing an increasingly important referrer of traffic although Google still tends to dominate.

So how does this effect the NZ market? For the examples above I looked at media engagement in Nielsen CMI:

Total Media Used (Main Media Used % in brackets)

Clothing & Footwear:                                                     Holidays & Travel:            Home Electronics:

Internet Research I Do: 40.2% (25.5%)                    74.5% (66.0%)                    63.1% (49.5%)

Internet Advertising: 13.6% (3.1%)                           20.3% (6.6%)                      14.4% (2.5%)

Social Networking: 3.1% (0.7%)                                  5.1% (0.9%)                        3.6% (0.7%)

Source: Nielsen Consumer & Media Insight Survey Q2 2010 – Q2 2011

This shows that currently New Zealand is quite a long way behind the US, however I believe this is changing and that eventually in both markets that when researching a product and/or making a purchase decision Social Networking will catch and perhaps surpass the importance of Search.

Final interesting tidbit out of the original article – Facebook commissioned a study by Nielsen which confirmed what we already know: trusted recommendations have a huge impact on the decision-making process, and people were four times more likely to buy something when it was recommended by a friend.

For the full original article, click here

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