Seven Nagging Problems with Social Commerce

Social commerce has become a big buzzword, yet many shoppers and many sellers are holding back on “going social” with their buying and selling. Why is this?

For many of the same reasons it took many years for e-commerce to seriously compete with brick-and-mortar retail. Social commerce is an immature ecosystem and concept, and it will simply take time for it to challenge the well-oiled transacting universe that e-commerce has become today.

The issues are many, and the potential for nuanced discussion is large, but at the big-picture level, here are the six key reasons why social commerce just isn’t happening in a big way yet:

  1. There are arguments about just what social commerce is. Is it Facebook Marketplace? Is it apps like OfferUp and LetGo, which seem just a stone’s throw from Craigslist? Is it subscriptions with active communities on CrateJoy? Is it just ad retargeting on social networks? Is it sharing your eBay listings on your social media feeds? Before social commerce can take off, it needs to develop a gravity center. Amazon and eBay are that center in e-commerce. There’s nothing similar yet in social commerce.
  2. Shoppers aren’t necessarily looking for it. More than 50 percent of e-commerce shoppers famously turn to Amazon first when they shop online. You can bet that eBay takes another huge chunk of that attention. How many eyeballs does social commerce get? You can bet that it’s not the nearly half a billion that eBay and Amazon together report as user bases of active shoppers.
  3. The shopping experience—and selection—are worse. As a shopper, if you have accounts eBay and Amazon.com, you can buy just about anything that’s for sale anywhere on earth. On social commerce, product and vendor selection are still limited, and you have to go out of your way to find them, traversing multiple sites and properties. It’s a chicken-and-egg problem: fewer products means fewer shoppers and less traffic—which means fewer sellers—which feeds the problem. Right now, most sellers are opting to sell where most of the actual shoppers are, which means that’s where most of the actual products are, too.
  4. Shoppers can’t transact on social commerce without thinking. E-commerce has the the sales funnel and conversion process down to a science. Amazon Prime is probably the best example here, but eBay has taken great strides in recent years as well. Shoppers can make major marketplace purchases on impulse, with almost no friction—but the hill to climb to find a product, understand the transaction process, and complete a social commerce transaction is far steeper and less predictable. That means lower conversion rates from sellers—from an already far smaller shopper pool
  5. Transaction problems snowball more easily. On eBay or Amazon, every last detail of the transaction—seller evaluation by shoppers, order confirmation, fulfillment tracking, returns and exchanges, disputes and dispute resolution—are handled smoothly and from a single, central location that can be managed with just a few clicks. Many independent website owners have similarly invested sweat and dollars to try to compete with this level polish, and for good reason—it attracts shoppers like nobody’s business. In social commerce, wild west rules still apply, like they did on eBay in 1999. For many shoppers and sellers alike, this is not an appealing prospect.
  6. Privacy concerns are hard to overcome. Privacy concerns for most shoppers are on the increase in recent years, and it isn’t lost them that social is often shorthand for collects my data and uses it for profit. For many shoppers, social commerce sounds a lot like less privacy, more risk. It’ll take time, infrastructure, evolution, and publicity for these concerns to be assuaged. In the meantime, sellers who imagine that they’ll affect conversion rates are probably right.
  7. Shopping remains a distinct activity. This might sound like an obvious thing to say, but most social media users simply aren’t ready to mix socializing and shopping. They’ve never done it before, and there are no rules or habits in place to drive social media users to think about shopping as they socialize—or vice-versa. Consumers simply don’t yet have a social mindset when shopping or a shopping mindset when socializing. It will be years before they form this association.

If you’re a seller who’s wondering whether or not you should be in social commerce, have no fear. For these reasons, you’re probably not missing much yet. Or, to put it another way, you can probably gain at least as much by redoubling and refining your efforts on the major marketplaces, where most of the shoppers are, and where safety and predictability for shopper and seller alike are much higher.

So for most sellers, the best idea at the moment is to do what you do anyway—satisfy customers, provide great service, grow your business strategically—and adopt any new practices or target any new markets within that framework. The rest will take care of itself.


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