How to engage your online customers' brains
On behalf of : Jayalakshmi Subramanian
Is social commerce even worth discussing? There is a lot of noise being made about social media and how it is the manna from heaven from marketers. While one can safely say that investing in social media might give some monetary returns and returns more in the form of intangibles such as brand building and consumer intimacy, the real question is - Is there any spending happening aided by social media or in other words is Social Commerce a reality now?
To answer this question, one only has to look at the Thanksgiving that just went by and the statistics provided by the retail federation. The retail federation reports that 92 million people shopped, (89 million last year), with the biggest gainers being the online retailers. According to the survey conducted by retailers, almost 50% went online on Black Friday. At the same time ShopperTrak reported that traffic at brick-and-mortar stores was down more than 11% on Black Friday.
So as we can see, online retail is catching up in a big way and undoubtedly social commerce has a hand in these online purchases.
What drives social commerce?
When people buy online, people might do so for a variety of reasons including necessity, convenience, friends recommendations or due to getting better deals online. Retailers too, who want to sell online have aligned themselves to one or more of these reasons while selling to customers.
However, does the strategy of being the cheapest online retailer or the retailer who stocks all the products in the category (ies), suffice? Maybe yes, in the short term; but in the long run, only the online retailers who have invested time and energy in understanding what motivates the customer to purchase and in making the online purchasing "sticky" will survive and continue to make money from social commerce.
How then can one make the online purchasing sticky? The website has to appeal to the consumer in a manner which makes it more meaningful to them. Websites which are typical e-commerce sites would take on a USP of convenience, value (eg. eBay), while social commerce sites will provide a social graph which includes recommendations from known people (eg. Chirpify, F-Commerce). While these kinds of websites are a dime a dozen now, the websites that will survive in the future are the ones that go beyond and offer something meaningful to the lives of its customers - this is now being referred to the evolution of social commerce into "Emotional Commerce".
How to make social commerce viable?
So why should one believe that social commerce which lends itself to people's lives be any better at generating revenue? In his book, "Social: Why Our Brains Are Wired to Connect", UCLA psychologist and neuroscientist Prof. Matthew Lieberman outlines how our brains are wired for reward and punishment and how this can be extended to the social world. He claims that social bonding stimulates the reward circuitry in the brain, while social isolation causes pain similar to physical pain. His ideas and insights from experiments, that people seek pleasure and avoid pain are applied in the social world too. He claims that pleasure is triggered in the "social brain" by connecting and sharing, by expressing empathy and by showing kindness and living harmoniously with each other.
So marketers need to ensure that their brands touch these chords in people's brains by allowing them to share, express empathy or do acts of kindness - have a socially led brand which allows its customers to do one or all of the above to derive pleasure.
And customers being the creatures they are, will continually seek to feel the pleasure again and again...and thus ensure revenue from social sites which offers these rewards. Proof of such emotional commerce being viable is demonstrated by the startup website Fab, now a two-year-old online store for design goods, which has seen margins comparable to Apple - 43% and revenue growth of 500% by 2012 and is today getting raising $150 million from investors to grow globally. The underlying philosophy for the Fab founder, Goldberg, has been the social brain - "People love sharing their latest design find and entire experience is all about design being a social experience".