Social commerce – where the act of shopping becomes seamlessly embedded in the creation, sharing and consumption of social media content – has always been the pot of gold at the end of the social media rainbow. According to McKinsey, word of mouth drives 20-50% of purchase decisions, so enabling people to buy in the same venues and contexts where they're chatting with their peers makes total sense.
Unfortunately, it's had a less-than-salubrious history. Facebook has found it particularly hard to nail. First there was 2007's short-lived Beacon plug-in, which published users' creditcard activity in their friends' news feeds. Presumably intended to inspire copycat purchases, it actually inspired shame, lawsuits and divorce threats. Then came in-page F-Commerce stores, which were prohibitively expensive for brands and an utterly disjointed experience for consumers. Finally, last year's mobile app, Facebook Gifts, offered users a chance to share real and physical gifts from retailers. Users promptly declined, and the service has been dramatically scaled back after only eight months.
There have been a few good examples of brands building social elements onto their own ecommerce sites – see Levi's Friends Store – and some interesting experiments in group buying from the likes of Groupon and Living Social. But the anticipated wholesale transformation of online retail by social media has failed to take place. Mostly, that's because the people with the technology have failed to understand the behaviour. Social commerce has the potential to be powerful, not because we want to share what we've bought, but because social content and conversation inspires us to buy. If you can make it easy for us to shell out in the very midst of our moment of emotion – the joy, envy, hope, hunger, lust, relief, or even guilt which we experience when we see a picture of a gorgeous interior, read a tweet about a brilliant book, or watch a how-to make-up video-then you're quids in.
This is why Pinterest has been so successful. An unashamed arena of aspiration where brands are more than welcome (and not edited out of user feeds, as with Facebook), Pinterest requires users to make at least two clicks on an image before it leads out to a shopping site. Nonetheless, shoppers referred by Pinterest are 10% more likely to follow through with a purchase than visitors from other social networking sites, and an estimated 47% of US online shoppers have made a purchase based on a recommendation from Pinterest.
Why? It's pictures. On Pinterest, there are no elaborate storefronts, no sales bumpf or lengthy reviews – the whole site is one big aspirational catalogue, where our peers filter, curate and endorse the products they love.
It looks like investors have scented an opportunity. This summer Fancy, a Pinterest imitator which allows users to purchase any product direct on-site, raised $53 million from the likes of American Express and actor Will Smith, and is now said to be valued at $600 million. And the excitement is transferring to moving images too. 'Hotspotting' – a technology which allows viewers to click on and directly purchase any object in a video – is gaining traction, particularly with fashion brands.
But what if you don't have a visual product? If Chirpify can live up to its claims, hashtags are the other big social commerce hope. Having already pioneered a system whereby consumers can buy or sell products in-stream on Twitter, Instagram and Facebook, using keywords and hashtags such as 'buy' and 'gimme', the Portland-based start-up is now launching 'actiontags' for brands. Effectively turning hashtags into hypertext, actiontags allow brand followers and fans to click on commands such as #buy and #vote in order to do, instantly, just that. Founder, Chris Teso, believes that 'hashtags are the new URL', and considering that they're simple, flexible, cross-platform and increasingly dominant in pop culture, he could certainly be right.
This August, Twitter appointed ex-Ticketmaster CEO Nathan Hubbard as its new head of commerce. It's clear that social's big players know that the time, and the technology, is finally ripe for social commerce. But as new and more sophisticated developments unfold, it's important for brands to remember one thing. You can build mechanics that make purchasing your products as easy as pie, but if your content and conversation don't inspire emotion, we just won't bite. Technology won't distinguish you – passion will.
The conversion of social media to sales, whether it's achieved through a click, an actiontag, or some yet-to-be-discovered in-stream wizardry, will only come if you make us feel something first.
