Social Commerce - Influence on Business & Brand Image

Published by MBA Skool Team, Published on August 28, 2016

“Facebook, Twitter, LinkedIn, Google+, Youtube, Pinterest, Instagram, Tumblr, Flickr, Reddit"....and the list goes on. Pause for a second and realize the commonality in these names.

Yes, you could have easily recalled it; these are some well-known social media sites of 21st century which have burgeoned since their advent increasing their followers from thousands to millions to billions and the inclusion process continues. How could have such large-scale adherence of people towards social media passed unnoticed by marketers and trade practitioners. It was just a matter of time before our market strategists realized the potential and thrift of social media being a succinct channel for e-commerce and hence, devised the concept of Social Commerce which can be defined as a marriage between e-commerce and social media.

In 2008, when YAHOO introduced Social Commerce as a tool to increase brand awareness and general marketing, the potential for revenue remained undiscovered. In the successive years as the internet penetration has increased, multiple social-networking players have pitched in and mobile technology in the form of smart phones, tablets, etc. have become ubiquitous; there has been an evolution and revolution in e-commerce through Social Commerce. Social Commerce has become the market buzzword and our e-commerce sites are leaving no stones unturned in exploiting it with the intention of identifying and understanding the multifarious consumer behavior and unprecedented market dynamics.

Image: pixabay

Be it Pinterest, the eponymous photo sharing website where 2 million people pin product-pins per day (20x more than there are daily shoppers at the Mall of America) and the average order value of sales amounts to $50 – higher than any other major social platform; or Google+, the interest-based social network drawing attention of digital marketers on account of its interactivity and cross-platform integration as well as promoting its active users in terms of search ranking; or the social media giant Facebook with its whopping number of users of over 1.23 billion driving nearly two-third of social media visits and claiming about 85% of all orders from social media; everyone has and is in the process of trying to enfold the budding Social Commerce space with something pretentious and unique. Every second player of the internet retail market is on a spree to formulate an exclusive strategy to increase their consumer outreach and prove their worth over others.

A market survey conducted by Business Insider in 2012-13 on the revenue generated by e-commerce players through different social media websites (pie-chart depicted on the left) reveals the essence of Social Commerce and its rampant growth in recent times. The survey also points out the increasing number of social media websites coming up with business models having an increased focus on Social Commerce.

Another market research by Shopify in 2013-14 on the orders originating worldwide from Facebook (bar graph depicted below) reveals the pervasive influence of Social Commerce on multiple shopping categories; be it Photography or Sports or Clothing or Music, each market sector has been touched and efficaciously impacted upon by Social Commerce. Also, the survey brings out the fact that Social Commerce has carried on the very idea of e-commerce i.e. demand fulfillment at one’s doorstep to an entirely new scale covering every section of the society with effectiveness.

These surveys, projections, graphical interpretations indicate the apparent fact that e-commerce is evolving manifold and Social Commerce is one such conspicuous evolution and needs to be explored meticulously by every prospective digital marketer.


Since its inception, experts have conceived multiple interpretations and definitions of Social Commerce. Joelle Musante (Co-founder: Pavyment) very aptly and explicitly defines Social Commerce for the present times as :

“Any Social Commerce shop should have the capability to; share, like, tweet, comment, review and buy on the platform. Because ultimately Its about getting people talking and sharing and buying. Anything less is just traditional e-commerce in sheep’s social clothing.”

Considering the changing online habits of millions of users, Internet Gurus initially anticipated a totally new marketing world based around social media. However, from a purely business perspective it has never really lived up to the expectations that marketers thought that it would owing to the simple reason: Too much focus on "Social" and not enough focus on "Commerce". Our experts failed to realize that the businesses who fund the social media concept won’t play if the social advertising isn’t bringing them customers and hence, an inflow of money. In today’s market scenario, the very established mantra that everything “social” has a soft return on investment has transformed into a notional concept. It needs to be allayed with the hard truth that it's time for our business owners to turn those likes and re-tweets into revenue. Another concerning aspect is the indecorous strategy of social media sites in routing the leads from their social pages to sales-landing pages for a confirmed transaction. Online customers build their perception of the required product by browsing information, reading reviews, watching videos and seeking opinions from their network and hence, need to be channelized towards closure of an initiated sale in an optimized manner. This reflects the vulnerability and susceptibility of Social Commerce towards losing potential customers. With the ascent of visual web (which acts as a repository for shopping ideas and wish-lists), change in demographics of consumers (pertaining to an upswing in the smart phone-savvy youth) and a mammoth set of users becoming active on social media every single day, Social Commerce is growing to its sheer potential and strategists need to be on their toes to harness the power of this marketing concept in the direction of facilitation of sales of e-commerce. This is the sole focus being pressed upon by Musante in her definition.

While formulating the overall business strategy, the stakeholders need to have clarity on the role of social media and should anticipate accordingly for outputs. Using social profiles for direct selling can often hurt the overall brand image and influence the shared content giving it a look of direct sales pitch. Hence, the key to driving sales is by engaging customers patiently through quality content. Generating Word of Mouth through endorsement by an influential niche leader can often prove to be the defining factor in online sale. Moving the customers smoothly to the landing page is only half the work done and the sole purpose of Social Commerce is accomplished only when a hassle free payment process with minimum distractions (excessive information requirements, re-directions, etc.) is served. Adding a shopping cart and wish-list to the will also boost the chances of making multiple sales.

In conclusion, the prospects for Social Commerce are highly propitious in the years to come. With consumer purchasing power and market digitization increasing exponentially, this social media and e-commerce concept is all ready to capitalize on the market requisites and maximize the revenues; the only obligation is to play the game with tact and forbearance.

This article has been authored by Gaurav Anand from IIM Raipur

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