Social Commerce: Understanding the Gap
Johan de Lange, cofounder of transsmart platforms, is a key Moja advisor. Transsmart has built a new type of payments infrastructure. Nope, no new wallet, no new cards, nothing new to add to the many payment options out there. Rather a new way of looking at payments, possibly even trying to make them disappear, make them a non-event, make them so seamless they become unnoticeable. This post was originally published as an article on Johan’s LinkedIn page, and is republished here with permission.
Socially linked customers are the strongest core to any brand community. Families and friends have always pivoted toward the familiar — places they mutually visited before. The same applies to virtual spaces, retail and financial services, and online entertainment. We’ve experienced many shifts in customer behavior that have directly impacted the success of commercial businesses, both online and offline. The big shift was originally from physical locations to virtual ones, accelerated and enabled by brands such as PayPal, Ebay and Amazon. The initial introduction of phones simply enhanced that experience, with retailers or businesses using the mobile channel as a means of campaigning to their customers, or as a security and authentication channel.
Then we realized there was resistance from customers to move only into the virtual commercial space, instead preferring to split their attention between physical and virtual businesses. We speak in ecommerce of the bricks and clicks balance, the strength of a brand to draw customers from their websites into their stores or from their stores to their websites. The reality is that many products simply cannot exist only in a virtual space, and businesses had to consolidate their efforts into one single business strategy that addressed both physical and virtual contact points for their customers. Many amazing hybrid models developed, with brands experimenting with virtual store fronts, store delivery or collection services, and mixed marketing programs that tied mobile phone campaigns to physical stores. These are still growing and accelerating into some very exciting business models — consider, for a moment, augmented reality.
However, the subtle shift that’s been shouting at us for a while now is the growing habit of customers to affect other customers much more profoundly than the brands themselves. Initial indicators of this would be the online comments to posts, web stores using “recommended” or “popular” tags reflecting previous purchases to guide buyers (sometimes falsely so), quickly followed by ratings of businesses through online platforms. Apart from the abuse that stems from false ratings, it showed that customers could directly affect other customers regarding the decision to purchase from a brand or abandon their initial attempt. This was the “social commerce” snowball in my opinion, strengthened by the maturity of mobile technology serving more and more sophisticated content to phone users.
Mobile has enabled brands to reach customers 24/7 and opened up whole new ways of reaching into their wallets, but it has also become a two-edged sword with customers now able to choose to purchase from anyone anytime, and more and more often using other customer data to help them in making those decisions. In as much as brands have access to amazing customer data today, consumers have also learned to use data much more effectively in helping them decide to purchase a product or a service. For the first time in a while consumers have the upper hand in purchasing, pushing brands into service provider roles, most often relegated to the name behind the cheapest product or service on offer, selected through the advice of fellow customers, a process repeated when selecting their payment method too.
Alongside this change in purchasing behavior has come the phenomenal growth of social media brands, pushing more and more consumers into social engagements that both enrich their online and often offline lives as well as keep them chatting with their favorite online connections 24/7. This is a powder keg in the making, especially when we consider the changes in buying habits of consumers as mentioned previously. This has rapidly brought about a new habit among tech savvy consumers, namely, informing their social circle via any social media platform of “specials” or “sales” or “poor experiences” or “bad service.” While a brand would often benefit from some of these actions, the ability to broadcast dissatisfaction and personal recommendations across public platforms such as Facebook, Twitter, and even LinkedIn, puts brand reputations at risk and stresses their customer service to the limit. Ignore at your own peril!
The response from brands therefore should be to inform themselves of their customer base, become transparent to their customers in terms of their efforts to serve them — both the good and the bad — and to bring the brand itself into the social framework of their customers. This can only be achieved successfully by acknowledging customers, changing the brand culture to a truly customer-centric one, and partnering with the customers to build a real brand community. Technology will help to enable and enhance this, but it will never bring about the change itself. Brands have to first change their culture and attitude toward their own customers.
Hopefully this second post has helped readers understand my call for brands to position themselves more aggressively within social media. The final installment to this series on social mobile commerce will focus mainly on the service stack with which to build a successful SMC strategy, using Indaba Mobile as an example of a very successful social mobile commerce platform. We’ll discuss bots and conversational commerce within that post as well, and I’ll continue to use the financial services industry as the target brands for my examples, though it would apply to any industry.
