Social commerce, currently projected as a $30 billion industry, is one of the hot topics these days in the world of loyalty marketing. To be successful, brands using social commerce need to make it a natural facilitating connection, according to Mary Ku, head of commerce at Facebook.
“Social commerce happens naturally,” Ku said during a session titled, “Power Panel: Social Commerce,” at the recent Money 20/20 Conference. “Social commerce is about discover, decide, and then purchase. What’s great about social commerce is to get that first discovery trough these apps. As a brand, you thrive in that environment.”
Gene Alston, head of business development, Pinterest, said his company’s approach to social commerce is providing customer information to the merchant.
“The merchant has to fulfill and deliver and we’re a facilitator,” Alston said. “We always think of ourselves as being a great place for discovery for these merchants.”
Cristina Cordova, head of business development, Stripe, said a customer’s initial discovery portion of the entire journey is exciting.
“That initial discovery where a person goes from never having heard of a brand before to having some brand affinity,” she said. “It’s not trying to get that loyalist. It’s about re-igniting that customer experience and helping people through that entire purchase funnel. You have to make it natural. It has to flow within the ease of the apps and with the people who use then.”
Brennan Loh, head of business development & strategic partnerships, Shopify, said it’s important to “put yourselves in the shoes of an entrepreneur. The biggest challenge for us is to get that sense of conviction and commitment. You want that first sale.”
What’s more, Loh said, is that part of the challenge in the small business community is to “make it digestible and provide the cost benefit. Social commerce is meant to connect people and simplify the customer journey.”
Loh pointed to WeChat, a cross-platform instant messaging service developed by Tencent in China, and first released in January 2011, as the best example of social commerce today. WeChat is one of the largest standalone messaging apps by monthly active users.
Another challenge is inventory.
“The challenge is Amazon has set such a ridiculously high bar,” Loh added. “Today, four business days (for delivery) and you’re flipping out and calling support. The fulfillment and inventory problems are a tall order. It’s an enormous opportunity and it’s a phenomenal problem. How can a small business function at the same rate as Amazon at a fraction of the price?”
Ku said social commerce boils down to connecting consumers to all the different products and services they would use daily.
“We are really looking at social commerce from a much larger lens,” she said. “You look at it across the spectrum. It’s people interacting with small businesses. So much has changed since our initial efforts. We’re trying to create the most seamless experience we can for our customers. How do we pull all of these experiences together that are most useful for that customer at that point?”
Facebook wants to provide merchants everything they can to service that social commerce transaction.
“We also give the merchant the ability to get marketing around it,” Ku added. “We’re really trying to think through customer expectations and make sure the merchant has what it needs to fulfill that relationship. We want to give merchants choices in how to fulfill that transaction and we see a ton of it happening naturally.”