Social Electronic Commerce can be understood as the mechanism which emerged from the intersection of social networks and ecommerce. It can also be referred as to the subset of ecommerce. Here, the companies use social interactions to allure customers on digital platform. On social media, the users can easily interact about the product or service description and whether they like or dislike the products of the organisation (Whiting and Deshpande, 2014). The present social ecommerce sites like Facebook, Twitter, Google+, Instagram, etc. are used by the businesses nowadays to share the information about the products and services. The customers are free to provide their reviews which can be negative or positive about the offerings of the business.
This literature Review will include the discussions on the problems and opportunities related to social ecommerce which is blooming in the present business environment. Various opinions of the authors will be discussed referring secondary sources and the differences or similarities in their opinions will be highlighted.
The scope of the project is broad due to the discussions on various concepts related to social ecommerce. The concept is nowadays in trend and gaining much advantage due to much involvement of the users on Internet and on social media websites.
The main objective of the project is to discuss the problems faced while using social ecommerce and the opportunities it have. The paper investigates the concept of social ecommerce and its potentials in future. It also discusses the challenges it faces.
Social ecommerce is an important and emerging platform for the shoppers. It is because of the increased use of social networking sites like Facebook, LinkedIn, Instagram and more. The social interactions made on these websites develop the intentions of shoppers to buy through these platforms (Liang, et al., 2011). Social media is a group of applications which allows the users to exchange content with each other. The term social commerce was first introduced by Yahoo in the year 2005. . Social ecommerce is an internet based social media which allows people to participate in the marketing and selling of the business offerings through social media channels. So basically social commerce is all about social interactions and the contributions of the users. The rising popularity of social media platforms has also influenced the behaviour of the consumers (Paquette, 2013).
There are various opportunities for social ecommerce. As per the study conducted by GigaSpaces (2011), 92% of the executives from the leading retailers are focussing on the social ecommerce websites and applications. The study conducted showed that 71 per cent of the users prefer buying online after liking the brand. It creates opportunities for the businesses because it helps in analysing the social behaviour of the consumers and this is how brand relationships are created and maintained. The statistics shows that 75% of the online consumers in US have their profiles on Facebook and 65% are currently active on that.
With the increase in the use of Mobile and ecommerce, social media has been revolutionised and so the shopping experiences of people. The advertisements and marketing efforts made on social media are relevant to the users. It helps in boosting sales especially for the online retailers who want to sell their products and services through social media platforms. The retail industry is at boom because of ecommerce and social ecommerce is providing them an opportunity to take it to the next level. This dramatic change has been experienced after the emergence of smartphones, social media platforms and increased use of internet. Social ecommerce is basically used by the retailers to increase the awareness of the population about brand. The social media giants have gained popularity and introduced new functions with an aim to build up an excellent shopping experience (Collin, et al., 2011). Some of the social ecommerce opportunities which could be an opportunity for most of the retailers are discussed below:
Facebook is the most used social media website which connect people to people and business to people. In the year 2015, Facebook announced that it is continuously putting efforts to make it convenient for the shoppers to shop through the website. Facebook announced that it is adding a separate shopping tab on its website so that it can be made convenient for the shoppers to shop from there and it will also be an opportunity for the retailers to feature their products over there. It is also testing to put a buy button on the page of News feed which will let the buyers buy the products from the particular retailer without leaving the page (Sashi, 2012).
This will help to keep more people engaged in the social media ecommerce platform. There is also a feature called carousel Ads which let the advertiser’s upload few images of their products and can also show links over there. This is an opportunity for the retailers to draw more attention of the users without slowing down the internet connections because these images are of smaller size than the videos. There are already separate pages on Facebook for business. Facebook, moving one step ahead, launched its own marketplace for peer to peer shopping. In this, the people can put their own items for sale and the nearby users can locate it (Alalwan, et. al., 2017).
It is seen that the online shoppers are more likely to buy from Instagram than from Facebook. In Instagram the relevant links of the websites are placed below the images and they are not clickable. The only place where the user can access the website by clicking on the link is the description or bio of the profile. In 2015, Instagram started showing the sponsored advertisements where some of the brands are showing the ads. This is how the businesses can access their target audiences and can boost up the sales of the business. After experiencing the popularity onf Instagram the company decided to make most of its potential.
The company is continuously making efforts to expand its advertising program. It provides an opportunity to the businesses to reach most of the consumers. Instagram provides three options for placing ads to the businesses. These options include Mobile app installs, website clicks and videos. The advertisements can be viewed as an image, video or carousel add in which series of images can be shown. Instagram is creative and that is why it gives an opportunity to the businesses to interact with the customers which is not possible on other platforms (Edosomwan, et. al., 2011).
Pinterest is a mobile application where the content can be searched across the web. Pinterest introduced Buy it buttons on the pins from where people who intent to purchase the product can visit the website and purchase the particular item. It is the ideal platform for expanding the business and to boost up sales of the company. The buyers can search and purchase the products from this application without leaving the page. The pins have to be created for which the companies have to pay through Apple pay or credit card. These pins increase the brand awareness and also the engagement levels so that more traffic can be generated to the website (Celine, 2012).
Twitter is an online platform where the news or social networking is done online. Here the users interact through messages which are known as Tweets which can only contain 140 characters. The website has performed many tests after which it has introduced ‘Buy Now Button’ where retailers could sell their products with the help of tweet. Twitter can track the location data so that it can create content for the local people to show or advertise the products or businesses meeting the needs of local users. Twitter creates a great opportunity for the online businesses and it allows them to create new audience, to build creative promotions and advertisements and to focus on the existing customers. It also assists the business in driving the traffic to the website of the company (Castells, 2015).
Over the past two decades, the customers are changing and are diverting more towards online channels. At first ecommerce disrupted the traditional model of retailing but now the social channels of retailing are taking over ecommerce and creating a good opportunity for the retailers. The social platforms, sharing sites and messaging platforms have created a vast network of socialisation in which the customers spend more of their time to share, experience, like and shop. The population have dramatically experienced the shift towards social media in recent times. Social media is most common among people especially young population.
The social ecommerce creates new opportunities for the businesses. It gives the ability to connect with the customers and also open new markets for the businesses. It can be said that the businesses have $100 billion social commerce opportunity and it is growing. The research by Forrester states that the online retail sales in US will grow to more than $530 billion by the year 2020 with the help of social ecommerce (Bharadwaj, et al., 2013).
The opportunities given by Social media to businesses have been discussed well but on the other and, many authors believe that it creates challenges for the business. It is a big challenge for the retailers to manage and influence the customer experiences. Also, selling online creates many challenges for the retailers like it is very cumbersome to manage the digital wallets and t manage the checkout processes by the company. It is clear from the study that 405 of the customers leave the products in cat because of the cumbersome and lengthy processes of purchase decisions and the completion of process. The study further reveals that the online revenue will increase in future and this is how the social ecommerce economy will grow (Hassan, Shiratuddin and Ab Salam, 2015).
One of the biggest challenge in front of the companies is to choose between the global strategy and local strategy while forming strategies and promoting on social media channels. Either the company could adopt ‘One Size fits all’ approach or it becomes very challenging to figure out what needs to be done. The company needs to carefully plan and integrate the global and local strategies in order to reach and attract the audiences (Tuarob and Tucker, 2015). For e.g. Starbucks Coffee manages to combine its core values with the locally crafted messages for the audience.
The companies also face the challenge of maintaining brand reputation on social media because people are free to comment, give their views and provide feedbacks which mi9ght hamper the reputation of the brand. Also, the employees of the business have to be clearly guided to draw a line between posting funny and attractive posts and offensive ones. Another challenge for the companies while promoting the business on social media is resolving the issues and crafting the best response on the issues created by the customers. Sometimes the companies get angry or negative reactions from the customers for which the brand needs to give appropriate response. It is very challenging to build a continuous and ongoing relationship with the customers so that the customer loyalty can be built. Another challenge is switching of brands by the customers.
It is very hard to gain loyalty on social media platforms because the customers have too many choices and they can easily switch the brand because of price issues, quality, and reviews by the customers or any other reason. This could seriously affect the business of the brand. The brands also face the challenge of getting their products and business ideas replicated. The other businesses could steal the ideas or replicate the products which can be sold at lower prices to gain the customers attention and turning the potential customers into the positive ones (Tsimonis and Dimitriadis, 2014).
The businesses face the challenge of high competition on the social media as there are number of brands present on this platform to make the most of the opportunities they get from social media. This high competition affects the overall profitability of the business. Another challenge of social media is excessive use of technology (Siau and Erickson, 2011). This means that social media includes new techniques and new changes every now and then because of which the people are not able to adjust with the same. The number of online users has increased in recent years but still, most of the users are not active. Most of the nations are not developed or in developing process where people do not even have access to technology or internet. This limits the access of the business to people for making them aware about their offerings and to sell them (Rad and Benyoucef, 2011).
To approach social ecommerce and to transform it into revenue generating channel, the businesses should take certain actions:
Creating an appropriate strategy: The Company should form a strategy for approaching social ecommerce platform: every business sells different products and services and have different target audiences. So, the retailers should focus on their capabilities and spend time in making strategies which help them in choosing right online platform and how to take it further (Baethge, Klier and Klier, 2016).
Making connections with the customers: the companies create the ability to make good connections with the customers with the help of social media. This should be done though surveys or polls so that product development could take place or further actions can be taken by the company.
Built on social analytics: Retailers should build their social analytics capabilities so that they can easily track down the needs and requirements of the customers and respond accordingly. The companies which understand the needs of the customers can bring improvements in their offerings and also increases the chances of their success (Kwahk and Ge, 2012).
These actions can transform the business of the company and can provide the benefits of being active on the digital platforms.
Conclusion
It can be concluded that social media ecommerce is the mechanism through which the businesses can promote and market its products and services to increase the sales of the company. Social media ecommerce have several opportunities as well as problems. The businesses which work on social media platform have opportunities of enhancing their sales volume, expanding the markets and of innovating their products and services as per the requirements of the customers. The problems of social ecommerce are that it can hamper the reputation of the business and there can be the difference between the local and global strategies of the business. It can also create high level competition for the businesses and the other problem can be inactive users on internet. At last, the strategic actions are discussed which can be taken while adopting ecommerce on social platforms. The companies should create appropriate strategy before entering into social ecommerce and should built excellent social analytics so that the company can run on the basis of needs and requirements of the customers.
References
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