Social Media vs. Social Commerce: What is the Path to Conversions?

With our continually developing language of ecommerce, it’s easy to confuse the terminology of social media with social commerce. Connecting and engaging with our networks using social media platforms is a different activity than eCommerce that happens directly on a retailer’s website or webstore through this channel. Let’s add some clarity to the dialog. eCommerce websites generally are owned, managed and understood to be the direct source where a retailer sells their goods and services online.  As potential customers, we intentionally take action and go to the site for the purpose of shopping. The retailer’s available customers are limited to those they are able to market to and entice to land on the site, continue to shop and hopefully convert. Large retailers such as Walmart have millions of online customers while most retailers are depending on far fewer.  Alternatively, these retailers can also choose to set up webstores within social media platforms, replicating portions of their online website assortments.

As I teach in our Introduction to Digital Retailing course, when we examine the history of social media sites, we find they were not born for the purpose of selling merchandise. Because we are social beings, most of us are genetically wired with a predisposed need to connect with other humans. In the days before electronic commerce and access to all of our personal technology devices, we lived in much closer physical proximity to each other. Families and friends often lived in the same communities for generations, creating natural, real-world connections.  As we moved away from these core community nuclei and as technology simultaneously enabled our virtual connections, we naturally gravitated first to Friendster, then Facebook and later to Twitter, Pinterest, Instagram and Snapchat. According to Facebook, over 1.86 billion people use their platform monthly. Many other countries with large populations such as China and India also have social media platforms where millions of users logon to communicate and connect.  For retailers such as Macy’s or Neiman Marcus, why wouldn’t they want to try to reach all of these customers with their merchandise?

Here’s the challenge. Typically, the customer’s reason for spending their time on social media is found right in the name – to be social. It is not necessarily to shop or buy something. Let’s imagine a real-world visual analogy, where I’ve met a friend at a restaurant with the specific intent of catching up on each other’s lives. In the middle of our conversation, a woman selling the shoes I browsed online yesterday stops by our table, holding the shoes and a 10% off coupon and inquiring if I might like to consider buying them now. After I tell her no, ten minutes later, a man stops by with brochures for vacation packages I searched online earlier that morning. During this same time frame, my friend has also had two sales people stop by her side of the table while we continued to chat. Not only is the retailer at risk of irritating me with the interruptions, they’ve also left me wondering how they tracked and followed us to the restaurant. Additionally, they have paid the visitors to follow us and present their offers.

Social commerce is commonly described as using social media platforms to engage those specific audiences to take an action that results in an online ecommerce sale.  This could be by linking back over onto the retailer’s own website via an ad or product link to complete the transaction or by completing the sale on the subset webstores available on platforms such as Facebook and Twitter.  As many social media websites aggressively seek to monetize their large customer bases, they continually experiment to find the magic formula that will add value for themselves and the eager retailers, while not alienating the audience. It could be argued that one of the best to date to bridge this challenge is Pinterest, which has created a natural and much smoother transition between social and commerce online experiences.  At the present time, social commerce is still in the infancy, experimental stages, which is exciting. It is primed for the next out-of-the-box creative thinker to discover the secret conversion formula. At its core, social media is still about connecting and feeding our human relationships.



Posted by Linda Mihalick on: 
Mar 16 2017