What is social media effect on commerce?

If Social Media has no effect on Online Purchases, is it still important for on online company to have a Social Media Presence?

  • This questions is based on the Mashable article: http://mashable.com/2011/04/27/social-media-retail-purchases/ The article talks about the report by Forrester Research and GSI Commerce. It looks like they found that social media has little effect on retail purchases online. But even if there is no direct sales from Social Media, does that mean Online Retail Companies should stop using Social Media?

  • Answer:

    Those of us in the Information industry have long considered Forrester to be a bastion of nearly useless data. Nothing personal to them, but they see the same facts I do and manage to come up with completely different conclusions. Look at the social media they were analyzing and you'll see that none of it has any connection to sales. This kind of analysis is why loyalty programs are so horrible. Companies are deaf, dumb and blind to the idea that relationships take time and need a proven track record of reliability and response before we can be best friends. Every company wants to be my best friend right now as long as I give them money. It's not sustainable - it's not even sane. If I prove I'm interested in your business by showing up, then it behooves you to show interest in me and my needs. Keep your stickers, badges and 5% discounts. Treat me like I'm someone who means something to you!

Erica Friedman at Quora Visit the source

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Other answers

This Mashable article caught my eye yesterday as well - probably because the headline itself seems calculated to stir controversy and get folks like us yapping away in our blogs and on Quora! Anyway, my problem with the Mashable article is that lack of followthrough around what could constitute "social media." Right away the author feeds you this little anecdote: "...data indicates that less than 2% of orders were the result of shoppers coming from a social network." Really. No kidding. I coulda told you that without spending a dime on research. Big deal! So here's my question:  Aren't product reviews a form of social media? Ya think THOSE might be important to the purchase funnel? And, while we're at it, what about product or service video demos? And blogger opinions? How about third-party comparison sites? These making a dent? Now that people are getting more comfortable spending thousands of dollars at a shot with online purchases, I bet they're making a BIG dent (no research here, just speaking from personal experience). Social media and social networks are not the same thing. A network is a connecting point where media is shared, seen, and discussed. It is not media unto itself. So let's not get confused by BS headlines. Here's the real takeaway for brands and businesses: Don't spend all your time and money on your FB and Twitter pages. Spend more time developing meaningful content and interactions that can be socialized (as in shared or responded to).

Jeff Miller

A report written by someone (Sucharita Mulpuru) admittedly biased against social media isn't something I'd put a lot of weight on, even if they are a part of Forrester. Having said that, the overall question brings the immediate answer of: what about customer service? Even if you could absolutely, positively say - without a doubt - that social never brought your business a single sale (including by referral through SM), you would be completely ignoring your current customer base. People use social. It's a fact. (http://www.gsicommerce.com/blog/post/5_minute_rewind_e_commerce_2010/) They use social to talk to their friends, to make new ones, start business deals, conduct business and complain/compliment a company's service/product. If you categorically ignore social and it's benefits in terms of KEEPING customers, I fully believe you're ignoring a large part of the evolving business process.

Gabriella Sannino

I agree with Jeff - I think the title of that article was meant as a bit of a challenge to everybody who normally scans Mashable for social media-friendly content. Another thing the article overlooks is how big businesses can use social media to build brand loyalty. The Skittles Facebook page is probably my favorite example of this (http://www.facebook.com/skittles). They post little one-liners once or twice a day, and run a campaign tied to their brand - Rainbro of the Week. Chances are that nearly all of the people who like that page have already had Skittles at some point in their life. But every time they see a status update, they think about Skittles - both the brand, and the little brightly colored bag, which they also see next the check-out stand at the grocery store.

Stephen K Bass

I believe that it is still important.  A couple things to note RE: the study... 1.] I did not see how social media was being used.  It seemed to be a blanket statement that social media is a waste of time...maybe they do not know how to properly harness the power of social media, or maybe they are not structuring it properly. 2.] While social media may not have a direct impact on online sales...I think there can be a major impact felt indirectly.  Much of social media is about branding.  Isn't branding an important mechanism with regard to online sales?  How about trend setting for future market share?  There is no better way to project market trends for future designs than via social media where you can reach thousands of people instantaneously.  You can get direct feedback and create excitement that might take the product or company viral in nature. When you approach online businesses and purchases from these perspectives, I think it it quite apparent that social media can play a significant part in your business success..no matter whether it is online or offline.  Maybe they need to re-think their approach to their whole marketing objectives...it would be interesting to see how they capture market share.  Thanks for the question.

Martin Casper

As a software recruiter, in customer personalization and analytics, I can see something on Facebook just like driving by a billboard, and in advertsing parlance it created an impression. It take multiple impressions or views to get a customer. I have abandoned Credit cards but the offers keep coming. Measuring Social Media without having an impossible programming link makes measuring and analyzing very hard from a generic site, but very measurable in an optimized site. If Amazon did not embrace Social Media, we would always go back to their site, but it is continuously extending its reach, just like all forms of media.

Charles Rein

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