Social media has come a long way with businesses adopting it for connecting with customers and other stakeholders from being used as just a means for individuals to keep in touch with each other, engage with new friends and become part of different communities. As of 2013, we have 1.15 billion total users on Facebook with over 10 million Facebook apps. In India alone, it has close to 95 million users with 75 million of them being on mobile.Two new users join LinkedIn every second and there are over 225 million users of LinkedIn. Close to 29 million companies have created company pages to connect with professionals on LinkedIn. When it comes to Twitter, there are more than 500 million users with 288 million active monthly users out of which more than 25% access Twitter from mobile. Thus the reach of social media has been exponentially increasing day by day propelled by mobile devices and the improving internet infrastructure in most parts of the world. However despite the growing attention and investment of businesses in social media, the promise of e-commerce from social media?social commerce?still remains a mirage.
Although business pundits have accepted that social media undoubtedly has a huge potential to make a positive impact on the business, there are several aspects of social media dynamics which have to be understood and managed effectively. Firstly while most consumers access information on the go, many businesses are yet to make their websites compatible across platforms. Further many of them do not feature social media properties on their websites, thus losing out on the opportunity to engage with the potential customers or their current customers.
According to a global study carried out by Tata Consultancy Services (TCS) with 655 enterprises with average revenues of $15.6 billion, only 10% have benefited directly from the investments in social media. While investments in social media properties are being made, 44% of the companies surveyed by TCS do not measure the return on investment. Another important aspect to be noted is that although consumers use social media to interact with the companies, according to the study, only 27% of research and development/product development and 37% of product management departments read social media comments from consumers on a regular basis. It has also been observed that even if the information is gathered from social media about consumers, it is not shared at the right time with the right functions. All this leads to the question of what is the potential for social media for generating new business and how can social commerce gather momentum?
In order to answer this question, it is important to have clarity on the definition and contours of social commerce over time and trace its evolution till date. The term ?social commerce? was originally coined by Yahoo in 2005 when social commerce meant a suite of collaborative shopping tools comprising of user ratings, pick lists, user generated content etc. Social commerce in the next phase has focused on trying to translate offline traditional buying process into online mode and involve social media to facilitate this. Thus social media sites by virtue of the communities they have been able to build, have been instrumental in supporting the buying process through referrals, experience sharing and reviews.
Such approaches have been adopted by sites such as Amazon where purchases are treated as endorsements. Tweets expressing happiness or dissatisfaction reflect the popularity of the product. Further, discount coupons and vouchers offered off-line or online through social media sites have created buying opportunities. Thus so far, social media sites have predominantly played the role of ?creating opinion or acting as the incentiviser to the consumers. However, now the expectation from social media is to act as the medium or channel for effecting direct sales.
The core to the customer engagement strategy driven by search engine optimisation (SEO) requires optimal design incorporating social media impact. Many businesses have not yet moved away from their objective of getting the attention of the customers and going after ?eyeballs? and continue to focus primarily on ensuring presence wherever the customer is. In addition to ensuring presence in various social media sites to create a connect with the customers and managing the online reputation of the brand seamlessly across various social media channels, today technology provides with a fantastic opportunity to present the products to potential customers by appealing to them using videos and animations.
The starting point has to be in being able to connect with the customers to help them visualise the experience they could expect from the product and this should be brought out seamlessly through videos and customisation. Social sharing and marketing would have to go hand in hand and both the objectives will be well served though a coordinated approach. In addition to the social media sites providing a platform for capturing customer views, a coordinated approach which enables discovery, experience, purchase, reward and after sales service as a single chain of activity, would create higher levels of satisfaction to the consumers. This would require an integrated strategy of bringing together the content from the social media platforms operating in the public domain to the private domain of the business, observing the signals and listening to customer voices. And thus enable the buying decision supported by smart analytics, whether it is while browsing the site or checking out products offline at the store.
We have started experiencing the transformational nature of social media because of its openness and the empowerment it brings to the people. It is time we recognised its virtues to deliver impactful business gains too on the strength of strategy that integrates cognitive science, information technology and marketing principles.
The writer is CEO, Global Talent Track, a corporate training solutions company