What Drives Social? What Drives Commerce?

Social and Commerce are two incompatible contradictions which lie at the two opposite ends of the e-commerce spectrum. That was already one of the core propositions asserted in the paper “Social Commerce: Sales in the Community Age” (Jochen Krisch, Andreas Haderlein, available in German only).

In the paper, the authors have intentionally put less focus on how some existing companies are profiting from social commerce, but instead on which alternative sales models are developing out of the social web and how they are challenging the classic e-commerce models.

Because no matter how some might cling sturdily to the idea, Social will never be a good addition to a traditional e-commerce model, let alone an extension of it. It will always just be an unwelcome distraction to the sales process. That is the reason why it is so difficult to fuse social commerce approaches such as those from Threadless, Polyvore, Etsy or Lockerz into the standard e-commerce thought model.

The e-commerce panel at the TES Conference in Munich last week exposed with an uncommon clarity exactly how contrary the two different approaches are. Pascal Zier from Gourmondo and Stephanie Kaiser from Wooga were asked which metrics are particularly noteworthy for steering their businesses.

Pascal Zier stated in truly classical e-commerce form that he watches above all traffic, conversion and the average order size. And Pete Clifford from Kaisers Tengelmann underlined this again later during the eFood session: social elements just distracts users from purchasing. So it was good that Gourmondo quickly buried their social community ambitions in 2008.

On the contrary, Stephanie Kaiser from the social gaming company Wooga said she looks especially at engagement, virality and monetization to steer her business.

What do we learn from this? Whoever sees e-commerce as an optimization exercise to get maximum revenues out of a set amount of traffic should keep their fingers far from social commerce. If nevertheless social commerce should take a future role in the business, a complete rethinking is required. Because for social commerce, traffic is not the deciding factor but rather engagement. Or as Stephanie Kaiser expressed it: the number of new users is entirely uninteresting. It is just important, how often the users come back.

This is e-commerce thinking for the future, at least for all that are aiming to succeed in the social web.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Comments

[Need eCommerce]

Social commerce is a subset of ecommerce. It involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services. Whereas ecommerce or Electronic Commerece consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks.

Thanks for the post. I like the tabular form of ecommerce and social commerce.

[omega watches]

This is so true. If we combine the elements of social commerce with e-commerce, we can improve sales and conversions.