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Social Media E-Commerce: Just Because It Can’t Be Measured Doesn’t Mean It Doesn’t Exist

Written by Evan Schuman
January 21st, 2010

The disruptive potential for social media and E-Commerce is huge, literally because it allows for so many—and ostensibly credible—connections that simply weren’t viable 10 years ago. The influence on purchases is vast. But those influenced purchases are indirect, which drives marketers crazy because they can’t be easily quantified. (Note: This scores social media two very well-deserved honors: Driving lots of sales and driving marketers mad. The first accolade is more profitable, but the second is more fun to watch.)

What brings up this topic is a maddening news release issued by a customization vendor called ChoiceStream. In reporting its own survey, ChoiceStream concluded that “consumers are not as interested in shopping when engaged with social networks. The survey found that while M-Commerce is a hot spot for recommendations in 2010, social networking is not. Of the respondents who belong to a social networking site, only 8.5 percent report that they have ever made a purchase while on the site. And only 27 percent indicate any interest in product recommendations from trusted retailers.”

That so misses the whole point of social networks and E-Commerce. The way it’s supposed to work is: Several friends discuss their lives, work and whatnot on, let’s say, Facebook. One participant starts discussing some clothes she purchased yesterday and how much she loves them. She posts pictures of the clothes and perhaps even a video of herself wearing them. Her friends are hooked, and they want the same pieces.

But instead of clicking right there—the E-Commerce expectation—the friends click away to their favorite E-Commerce sites, be they Amazon, Macys.com, Nordstrom.com or anywhere else, and make their purchases there. The site that gets the transaction see the trail—they’ll notice a lot of referral traffic from a specific and deep Facebook URL—but neither Facebook nor, certainly, a retailer or manufacturer lurking in the online shadows will.

Related Story: Social Unstructured Data Not Unusable

The ChoiceStream comment takes the leap from “they didn’t make the purchase on the social site” to “consumers are not as interested in shopping when engaged with social networks.” Au contraire, you quintessential E-Commerce laissez faire. (Do we get extra points for rhyming in French?) In this case, though, laissez faire means that we shouldn’t interfere in the natural way of a social networking site. Leave them alone, and they’ll produce wonderful sales. But fill the pages with manufacturer and retail links, and you’ll undermine the credible atmosphere that facilitated the purchases in the first place.

You can’t force it, and you can’t track it. Devil’s Advocate question: If it can’t be tracked, how can we be so sure that social media sites are in fact influencing and indirectly causing sales? Ahhh, but it can be tracked. Any E-Commerce directors out there? Check your referral logs and see how many visitors from social sites quickly made substantive purchases.

So here’s a sad-but-true question for all retail marketers. If a tree falls in the forest and no one is around, does it make a sound? Answer: Yes, but only if the tree hadn’t disabled cookies.


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