Social e-Commerce: What You Need to Know

This is probably a familiar scenario: you’re looking at Facebook or Instagram, and you notice a post from one of your friends which prominently features his latest purchase. Let’s say your friend Jack has just bought a pair of noise-cancelling wireless headphones. You might have been thinking about getting a pair for yourself for months– your commute on the subway is so loud, you can barely hear your music. Jack’s purchase has inspired you, so you open up a new browser tab, search for the headphone brand he just bought, and identify the best deal on them. From there, you’re a few clicks away from those headphones being in your mailbox next week.

The example above is an illustration of social e-commerce. “Social e-commerce” refers to shopping on the Internet which is inspired by the purchases of your social network connections. A purchase might also take place on group shopping sites. Group shopping sites sell discounted goods and services, but only if a certain number of people commit to buying them. Let’s go back to the example of Jack. You and Jack frequently use Groupon. One day, you’re browsing Groupon for the best deals, and you see that Jack has bought a package for a sushi dinner at one of the hottest places in town. You think about how much you love sushi, and how much you enjoy a good deal. Luckily for you, there are still packages left for purchase on Groupon.

Social e-commerce is also known as social shopping and social commerce. It shouldn’t be a surprising phenomenon, as a study carried out in January 2015 revealed that the average social media user logs 1.72 hours per day on social media platforms. That number represents about 28% of all online activity.

That statistic, as well as anecdotal evidence, has led Google, Pinterest, Twitter, Facebook and Instagram to announce the addition of “buy” buttons to posts featuring products. It’s great news for social shoppers, but don’t expect smooth sailing ahead for either the social media sites or for e-tailers. For starters, Facebook and the like are going to need to integrate inventory and payment systems of many different vendors. Secondly, social media sites (and the search engine giant Google) will have to convince users to buy through their platforms. Although people might be excited about the idea, they might not trust their credit card information to the same site on which people constantly post pictures of cats. Thirdly, vendors will become less interested in partnering with social media sites if it means that consumers don’t buy many items at once. It’s not profitable for retailers to sell one item at a time, especially if it’s not expensive.

In spite of the challenges, social e-commerce will continue to gain traction because of social media’s role in our lives. As long as people are posting pictures of their latest headphones, their friends will want to know where they got them, and how they can get them, too.