It's a Kodak moment!

I own a Canon digital camera, but whenever I capture a rare moment it is a Kodak moment for me. While Kodak practically invented digital camera back in 1975, it failed to understand and effectively serve the ‘Click and Share' needs of today's digitally connected consumers. Sadly, Kodak filed for Chapter 11 two months ago. It's a Kodak moment for businesses when it comes to social commerce. Pun intended.

If I told you that 82 per cent of the world's online population visits social networking sites and spends more than 20 per cent of the total time spent online at social networking sites, sharing everything from life events to ‘likes', you would want to set up shop in those networking sites. The question is, should you? Probably, not just yet. Even though the impact of Facebook, due to its 800 million users cannot be overstated, the return on investment from Facebook commerce (f-commerce) has not been stellar, according to a recent Bloomberg report. But, social commerce outspreads Facebook or any other social networking site.

Social commerce is about facilitating connections and conversations that help commerce as well as create opportunities for commerce within the context of ongoing conversations. And, according to Booz Allen Hamilton, $30 billion will be spent via social commerce by 2015. Social commerce can no longer be a curiosity.

However, to take advantage of the opportunity, three things need to happen.

Investment in features that facilitate consumer-to-consumer connections during commerce

Extension of engagement using social technologies to customer service

An eye for innovation in this space

Invest in consumer-to-consumer connections

Ratings, reviews, recommendations and referrals are powerful features that facilitate consumer-to-consumer interactions. According to a survey conducted by Harris Interactive last month, 75 per cent of the people polled said they would be more likely to purchase a product or service that a friend openly endorses. Purchase-sharing sites such as Swipely, Blippy and Buyosphere are turning purchases into conversations by allowing consumers to organise and share their purchases and influence others. Forums and communities are other effective features that create a sense of empowerment amongst consumers.

Group buying is a form of social commerce, but profitability from deep discounts is questionable. While group buying as a business development and customer acquisition strategy makes sense, it does not enable the core premise of consumer-to-consumer connection.

The focus needs to be on the features that will provide maximum return on investment and integration of those features into the brand sites to create seamless customer engagement.

Social technologies in customer service

In a study conducted last year by Zendesk, a Danish helpdesk software firm, 62 per cent of the customers polled said they used social media for customer service and nearly 45 per cent of the surveyed said they contacted a retail business for support. Best Buy, one of the large retailers in the US, uses Twitter to offer tech advice as well as general customer queries in tweet form. It has more than 42,000 followers and has become one of the ‘go to' places for their consumers on the social Web.

Focus on doing more than just being present in the social networks. Be available to interact, solve problems and advise consumers.

Keep an eye on the future

A lot of things are being said and done about social commerce, but we are just getting started on monetisation of the social dynamics. Social is going to be everywhere; even in places where you least expect it, such as an in-vehicle Internet offering that brings Facebook and Google to the dashboard of the new Mercedes-Benz SL Class.

Social technologies that connect customers in the physical stores to the digital world and enable socialisation of their selections with family and friends, social gifting services that allow friends and family to contribute towards a purchase and social currencies such as Facebook credits are some of the trends to watch out for.

No one size fits all

In the end, an approach that works for one will not necessarily work for others. In India, Twitter (given its adoption as of now) may not be your best bet for customer service. Do what works best for you, but remember, the equation is pretty simple:

Customers x Connections x Conversations = Commerce.

(Prabhu Kannan is Director, Digital Commerce Capabilities, SapientNitro)

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