The Future of Social Commerce: Overcoming the Obstacles to Current Social Shopping Efforts

E-commerce has drastically shaped how consumers shop over the past couple of years, with the latest forecasts predicting e-commerce sales to reach $482.6 billion in North America this year alone. Today, we are seeing a larger push towards social e-commerce, with major social networks and retailers coming together in attempt to create a more seamless shopping experience. Most notably are Amazon’s attempt to extend its shopping cart to Twitter by launching #AmazonCart, the announcement of Facebook’s “Buy” button, and Walmart’s recent acquisition of social shopping site Luvocracy.

While each of these efforts attempt to combine the popularity of existing social channels with new and easy-to-use purchasing options, building truly social communities based on repeat engagement and brand loyalty has remained a challenge. In order to be successful, it’s important for retailers to learn from and overcome the current obstacles facing the social commerce space and identify early on what offerings are most likely to appeal to end consumers.

1. Skepticism and Privacy Concerns

When #AmazonCart was unveiled in May as a way for users to add items to their Amazon shopping cart without leaving their Twitter page, there was understandable skepticism around how the hashtag actually made shopping easier. Consumers are required to connect their Amazon and Twitter accounts in order to use the feature, which many considered a step outside of their comfort zone. Since most people are used to keeping their Twitter accounts public and their Amazon carts private, the possibility of #AmazonCart tweets seen by everyone can be perceived as nothing more than an attempt by Amazon to turn your cart into a free advertising opportunity.

In a similar fashion, Facebook’s Buy button was created to allow users to purchase products directly from brand advertisements on their Facebook page. Despite this attempt to make online shopping more convenient for its users, there is debate around whether Facebook will be a reliable source when it comes to protecting consumers’ data and overall privacy. Given the onslaught of credit card breaches from respectable retailers like Target and TJX Companies, plus the most recent theft of 1.2 billion online passwords from Russian hackers (the largest data breach to date), many consumers are simply unwilling to allow their credit card information to be stored online, let alone by a social networking site with a mixed reputation on protecting user data.

2. Product Promotion Over Enhanced Customer Experience

At the end of the day, Facebook Buy and #AmazonCart are essentially just new advertising opportunities hoping to reach a more targeted audience, but still largely miss the boat on providing an enhanced and more personal shopping experience for users. The problem is that these options focus heavily, if not entirely, on pushing promotional content and impulse buys, which voids the platform from being a community of brand advocates in the end. According to CMO.com, while consumers who connect with brands on social media are being influenced to make certain purchase decisions, social media is not driving a lot of direct sales. The first step to a successful transaction is paying close attention to the shopper, and then figuring out what products they currently need or are likely to buy based on revealed preferences. Many traditional e-commerce sites do the opposite, focusing on the product line over the customer, and as a result are unable to build a loyal customer base.

When Facebook announced the shutdown of its Gifts service on August 12, the decision to weed out peer-to-peer gifting in favor of adding a Facebook Buy button to boost in-app sales was a clear step away from personalized shopping. Twitter’s recent purchase of CardSpring is another example of how pushing products takes priority over gauging real consumer interest, as the main focus of the partnership is to give retailers a new way to offer promotional shopping deals and discounts to consumers already using Twitter. This fails to address brand loyalty since users must choose to link their credit card accounts to merchants in order to redeem the deals, which are recognized only when the card is swiped. Too often, the loyalty ends when the deal expires, and the opportunity for repeat engagement to spill over into social media is lost.

3. Antisocial Social Shopping

Walmart’s acquisition and ultimate termination of social shopping site Luvocracy highlights how many existing product discovery platforms are falling short of offering true social shopping experiences. It is still unclear what Walmart plans to do with its new acquisition, but signs do not point to the building of a truly social retail experience. To begin with, Luvocracy is/was a social platform built on top of shopping preferences, rather than a social shopping experience based on existing communities.

Walmart must have some idea how to capture the power of those crowdsourced shopping recommendations if it will be shutting down the platform and presumably restricting users to “prefer” its own products. While some people are currently using Luvocracy to recommend Walmart products, they are doing so in an environment where they are free to explore other retailers as well. It remains to be seen whether Walmart will command the brand loyalty to make users of its new platform forget about the alternatives.

With Walmart’s latest push to become more social, it is expected that we will be seeing more retailers do whatever it takes to get access to today’s new breed of not only customers, but marketers and engineers who can keep them relevant and ever-present. The key factor in launching a successful social shopping experience — and avoiding the antisocial social reputation — seems to be allowing consumers to connect with an active and targeted community with common interests. Brands like Pinterest and Wanelo are proof of this, securing millions of users by focusing on building communities around trusted tastemakers. Other brands that insist on putting the brand ahead of the community are unlikely to recreate the same kind of organic and viral success that Luvocracy, Pinterest, and Wanelo have enjoyed.

The Future of Social Commerce

Overall, there’s a big difference between solving a problem and simply jumping on a trend — in the case of social shopping, offering a one-click buy button or allowing users to tweet a hashtag at brands to make a purchase doesn’t exactly make the shopping experience more social in itself. Seamlessly blending the speed and convenience of online shopping without losing the highly personalized experience of in-store shopping is imperative for the future of social commerce. For example, curated shopping lists from people you trust are becoming a major trend as social commerce grows, where word of mouth from friends, family and other close networks will be essential to building these lists. Letting these communities grow without fetters and tailoring offerings toward them shows much more promise than trying to recreate them in the image of your brand.

Jack Lowinger is founder and CEO of Cartonomy.


Originally published at insights.wired.com.