Why Social Commerce Isn’t Exploding Yet

So should you venture into the world of social commerce or shouldn't you?

Shoppers and sellers alike are increasingly wondering whether they should jump aboard the social commerce bandwagon and why they’re struggling to figure out just how to do so.

This is no surprise. Whether you’re a shopper or a seller, there are real reasons for the strangely hidden nature of social commerce at the moment, and these reasons may help you to decide whether social commerce is right for you. Here are some of them:

  • Social commerce isn’t well-defined: Nobody’s sure just what social commerce is yet. The buzzword is big, but making a consensus list of examples is hard. Is it limited to trading on social networks like Facebook Marketplace, or does it include local buy-and-sell applications like OfferUp? How about crate-and-community subscription products like Watch Gang? Does it include any service that uses Facebook Login to collect shopper behavior data? Or is social commerce actually anything that involves posting and clicking on social network links—something most people already do regularly? Questions like these make searching for social commerce a bit of a waste of time right now, especially if you’re already satisfied with your e-commerce experiences.
  • Social commerce is hard to find: Many of the new platforms that are being called social commerce aren’t yet easy to find or access. Take any group of 100 people and ask them to show you around eBay or Amazon and every one of them will—without thinking. Take those same people and ask them to show you Facebook Marketplace and many—if not most—will struggle or demure. Access is still limited to particular platforms, apps or communities, and there’s often no “front door” to their social commerce features even when you find them.
  • Social commerce still presents a steep learning curve: Traditional e-commerce has the shopping experience down to a science. A few clicks—everything always tends to go smoothly—and you’ve made and received your desired purchase. This familiarity and convenience go out the window in social commerce right now. For shoppers, social commerce today is a lot like the e-commerce experience of the 1990s—unfamiliar apps, improvisation and much uncertainty. This is bad news for sellers, too, as they want the purchase process to be as easy—rather than as obscure—as possible.
  • Social commerce offers worse selection and a smaller audience: Traditional e-commerce has become tremendously convenient. As a shopper, if you have accounts on eBay and Amazon, you can buy just about anything that’s for sale anywhere on earth. The same can’t be said for social commerce, where product and vendor selection are still limited. And if you’re a seller, you’ll quickly note the chicken-and-egg problem here: Less product availability and visibility means fewer shoppers, but fewer shoppers means fewer sellers to offer product availability. Right now, sellers’ time is probably better spent selling where most of the actual shoppers are.
  • Social commerce is less professional and trustworthy: eBay, Amazon and most other marketplaces have spent years refining their systems of ratings, their methods for handling returns and order tracking, their policies and their methods for measuring buyer satisfaction—all to ensure a great experience. Most independent website owners have similarly invested sweat and dollars to try to compete with this level polish, and they want their investment to generate a return. In social commerce, things are still rougher than this. Strong professionalism and trust measures just don’t exist yet in social commerce. As a result, shoppers are more likely to suffer through less-than-ideal transactions, and sellers are more likely to encounter dissatisfied buyers for unanticipated reasons or reasons beyond seller control.
  • Social commerce creates privacy concerns: It isn’t lost on many shoppers that social networks collect a lot of data and exist primarily to share this data in various ways—and that this likely applies to purchasing decisions, too. While those at the vanguard of social commerce are excited by the prospect of using shoppers’ purchasing data to drive yet more purchases, for shoppers, this sounds an awful lot like, “I’ll have even less privacy in my life, including about the things I buy.” Shoppers are still resistant to pure social commerce plays for this reason, and sellers should similarly be careful about just how freely they embrace the social commerce ethos—everyone needs to be sure that everyone’s privacy is protected along the way.

Shop and sell sensibly and patiently, just as you always do

So should you venture into the world of social commerce or shouldn’t you?

If you’re a shopper, the answer to this question is an easy one. If you’re satisfied with your current e-commerce experience, with whatever percentage of social commerce that includes (and by whatever definition of social commerce you’re using), you have little to gain and multiple things to lose right now by consciously deciding to try social commerce out.

The best advice is probably just to follow your nose—if you happen to wind up face-to-face with a Facebook Marketplace product that you’d like to buy or a crate club that you’d like to join, great—weigh the pros and cons, make a decision and be prepared for a few hiccups. If you find a site that’s integrated with Facebook in some way but that offers goods you can’t live without, then by all means, shop away.

But there’s certainly no reason at the moment to go out looking specifically for social commerce just to be part of the in club. If you’re a deal hawk looking for the best prices or interesting products, you’ll probably find them on your own without trying to target social commerce platforms specifically. Let your purchasing habits, your common sense and your wallet lead you to the right choices.

If you’re a seller, the answer to this question is slightly—but not much—more complicated.

First off, how’s your regular e-commerce business doing? If there are fundamentals you’re still working on, then focus on those first. Yes, social commerce may represent some number of new shoppers, but the market today is a limited one (although competition is also limited at the moment). Social commerce methods (sharing on social networks, using social media logins to help you to know your shoppers better and so on) are a far better bet, but evaluate these moves on the merits, rather than out of a misguided desire to “adopt social commerce” as a platform or strategy.

Do what you would normally do—focus on satisfying your customers and growing your business effectively—and the rest will take care of itself, including any social commerce practices that you may decide to adopt.

Social commerce isn’t there yet

Although the points above might make it sound as though social commerce is a bust, the truth is more nuanced than that.

As was the case with e-commerce 20 years ago, social commerce is in its infancy. What social commerce is today is likely not what it will be tomorrow. There will be a lot of opportunity in social commerce for some sellers, and there’s a big, bright social commerce future ahead for many consumers—but it’s also true that social commerce just isn’t there yet.

How will you know when it’s time to jump on the social commerce bandwagon?

By some definitions, you might already be there and just not know it. And by any definition, if you focus more on what you’re doing (shopping or selling) and less on whether you’ve seized on the latest technology trend, the rest will take care of itself.

Kevin North is CEO of e-commerce analytics provider Terapeak.

Image courtesy of Rawpixelimages/Dreamstime.