The Seamless Enterprise

Comprehensive news and discussion of enterprise communications and converged network solutions.

Trending Now: Social Commerce, a New Form of Convergence

on April 28, 2011 by Heidi Gigler

E-commerce. Social Media. Social Commerce. Far from mere buzzwords, these terms are backed by millions of dollars of investment, by all sizes of businesses. Just look at the cultural transformation brought upon by the likes of Amazon, Facebook, and Groupon. The marketplace is seeing a convergence of e-commerce and social media into the fastest growing phenomena, social commerce. For enterprises that market B-to-C (Business to Consumer,) experts view social commerce as the next big thing. It is a customer-driven online marketplace where relationships matter more than ever in generating revenue. 

One future prediction, from CMEA Venture Capital’s Sumeet Jain: “It’s a matter of time—within the next five or so years—before more business will be done on Facebook than Amazon.” defines social commerce as a type of electronic commerce that employs social media to promote online transactions. People interact with each other in an online environment, actively participating in marketing, and the result is sales. Keys to the success of social commerce are the elements of trust and familiarity; people trust the recommendations and referrals made by people they know. 

Think of the power of social commerce this way, says Craig Donato on TechCrunch:
If you’re looking for a new product, which would matter most to you:
a) Half of a dozen reviews from people you don’t know.
b) A coupon for 50 percent off.
c) Two friends who use the same product, and are fans?

While all these are positive options, a recommendation from a familiar contact elicits the most trust and confidence.

What about the Success of Groupon and how it is different from Social commerce? First, only 8.3 percent of Groupon referrals come from social media according to Groupon’s success is in its shotgun approach, reaching as many unknown prospects as possible with the goal of generating cost-effective leads. Participants sign up for the service because of the compelling offers, not because of an existing relationship with any one company. Social commerce, on the other hand, is based entirely on relationships. While both methods can be very successful, the difference lies in the target market and the long-term relationship. 

Social commerce matters to the enterprise because it is about companies deepening their relationships with existing customers, who in turn fuel referrals. The premise is built upon a trusted network, in effect a new sales channel. Social commerce excels at driving sales based upon two types of relationships – those between businesses and existing customers, and those between the customers themselves. For social commerce to be effective, a company’s product or service must be meaningful and relevant to the user to be talked about.

The point is social media relationships matter, and the closer the better. For example, says blogger Tamara at, “a Facebook `Like‘ (the closest comparison to a tweet) drives on average $1.34 in ticket sales, compared with a tweet that drives on average $0.80.” While Facebook and Twitter are cyber-communities, it appears that deeper relationships yield more relevant recommendations that result in sales. 

As businesses continue to adopt social media strategies, one not to be overlooked is social commerce. 

Comments (1) Leave a Comment

5/15/2012 6:34:45 AM

Great blog!


Add a comment:


  • Comment
  • Preview

About the Author

Heidi Gigler is passionate about customer loyalty and business development. She has built her career developing strong relationships and product expertise to drive revenue for Fortune 100 enterprises and small to mid-market businesses. Heidi’s career includes more than 10 years in the telecommunications/high-tech industry, with an emphasis on growing the managed services practice at Sprint. As Strategic Alliance Manager at Sprint, Heidi partnered with Cisco, Microsoft, and HP, launching new product solutions to the enterprise and mid-market business segments. Her product experience includes IP and wireless security, managed services, mobility and wireless solutions, and technology integration. Heidi earned her MBA from the The College of William & Mary Mason School of Business, and her BA from the University of Texas at Austin. She is now a freelance writer and development consultant in Austin, Texas and enjoys her free time reading, traveling, and exploring the outdoors.


More news
from sprint

Register here to receive
future newletters
from Sprint.