Social Commerce has hit some setbacks as of late. It is be the next logical step of e-commerce, with the proliferation of smart phone set to explode on a global basis it seems like an obvious next step. Yet the concept hasn’t taken off the way that many people have expected.
In 2011 something profound happened. The number of smart phone sold exceeded the number of PC’s sold. In February 2012 Smart phones in the US represented 46% of the market up from 35% at the end of 2011. It is predicted that Tablet sales will outsell PC’s within 3 years. Apps sales grew into a $10 billion industry growing at 100% per year. When you combine mobile, social, photos, music and gaming the growth is profound. Instigram have 25+ million users. Drawsomething became the number 1 app in 79 countries with 12+ million users, generating $100,000+ of revenues a day all within in 6 weeks of launch. AOL took 9 years to get 1 million users, Facebook took 9 months. Global internet users will double over the next few years and most of that will be mobile.
However, Apps apart, social e-commerce has not taken off. Companies and brands have been keen uptake and attempt social e-commerce programmes, but while platforms such as Facebook were perfect for this trend to gather pace, consumers do not appear to be as keen. Before long, certain brands began shutting down their Facebook services due to a lack or return, which in light of the firecast growth in mobile internet connectivity could be deemed hasty or a warning sign depending on how you viewed it.
It also raises another question, does the age profile using social media have the spending power? As the age profile grows the spending power will improve. So one assumes this will not be an issue.
However, it doesn’t mean that social commerce is a failure now, instead it has resulted in sites realising that you need to do more than just tack on a Facebook page and expect the revenue to begin rolling in. New ways of engaging with users and different payment models are being explored as it enters its latest phase. As consumers are getting accustomed to immediate discovery and the lower prices associated with e-commerce, a new host of start-ups are appearing, ready to begin round two.
Current e-commerce system needs to be shaken up considerably for the opportunities in mobile if nothing else. Facebook could be well positioned to take advantage of this, and it certainly needs to be if it’s to retain its relevance and stronghold over the market that it has enjoyed over the past few years. Google, Microsoft, mobile operators and others are all looking at this space. But the one certainty is all companies big and small need to embrace social ecommerce now to create and maintain competitive advantage. Those who don’t will get a nasty surprise.