booz&co.: Turning “Like” to “Buy”
As consumers around the globe spend more time on social media of all kinds, it is inevitable that some of their posts and comments relate to what they are going to do at the mall and what products they like. Many consumer-oriented companies have already responded to this shift by setting up Facebook fan pages or Twitter feeds. These can be great ways of engaging with and influencing customers, especially since the individuals on a social networking site are usually connected to other individuals whom they trust and respect. So, in the best case, a company that has something appealing to sell can, through an initiative involving social media, provide an impetus far superior to traditional advertising—recommendations from the most influential people of all, the prospective buyer’s friends and family.
But company influence through social groups and traditional marketing models is stopping well short of the emerging opportunity. For many customer segments, shopping in the physical world has always been social: I can go to the store with you and put an item in your shopping basket, saying “This is perfect for you.” Now, some companies are using social media in a similar way: as a place where they can transact business with their customers and where customers can shop with each other. E-commerce is coming of age. These trendsetting companies are focused on products and services that benefit from the unique characteristics of social media, including the opportunity to get quick feedback from multiple friends and family members.
The market for social commerce has been embryonic to date, but that will change over the next five years as companies race to establish stores, pushing up social commerce revenues sixfold, to US$30 billion globally. As this growth surge happens, social commerce will take its place alongside stores, telesales, and the more traditional Web to emerge as a significant sales channel in its own right.