10 Reasons Why Social Commerce Should Be Your Top Priority

Humans are social by nature. And for the last couple of years, some of the leading online retailers have taken notice. From product reviews to user forums, social commerce involves integrating the best of Web 2.0 and social networking capabilities within an eCommerce website – to create a community of enthusiastic consumers who will buy more, come back often and value greater engagement with the retailer.

If you are an online retailer yourself, chances are, you have at least considered using one or more social commerce technologies on your site. But if you are concerned about giving up control of your marketing message to shoppers who can praise or destroy your brand, and are wondering whether social commerce would do more harm than good, check out these reasons for making social commerce your top priority:

  1. You’ll get to know your customers better. Features like forums and message boards are great sources of customer information. They give you an insight into your customers’ interests and opinions – including what they think of your store and its products – helping you make well-informed modifications to your website.

  2. People trust people like themselves. According to a study by Marketing Sherpa, 84 percent of respondents said they would trust user reviews over a review by a critic. Reviews by industry analysts and company advertisements can sometimes be seen as biased and somewhat impractical, as they typically tell you what the product can do under a controlled scenario, not under everyday circumstances.

  3. You’ll process fewer product returns. User reviews and ratings help consumers make better-informed decisions when shopping for products online. Consumers will be less likely to experience post-purchase disappointment or buyer’s remorse, hence reducing the risk of returns. A recent survey conducted by pet supply store Petco revealed that products reviewed by customers on their site averaged a 20 percent lower return rate than for products without reviews.

  4. Customers will welcome your cross-selling and up-selling attempts. Features like similar product recommendations (known as YMALs for “You Might Also Like”), product tags and purchase trends (buying behaviors after viewing a product’s description) let you present your customers with relevant product options they may not have considered previously. Online shoppers respond well to suggestive selling techniques and, according to Forrester Research analyst Sucharita Mulpuru, product recommendations and similar systems make up for 10 to 30 percent of an online retailer’s revenues.

  5. It increases customer satisfaction. Customers appreciate it when retailers are willing to expose their quality – and that of their products – through user reviews and product ratings. If you are concerned about getting negative reviews, thinking they’ll have a negative impact on your sales, fear not. Negative reviews make online stores look genuine, plus, users are more likely to leave positive than negative feedback. Forrester Research analyzed 4,000 reviews on Amazon.com and found that more than 80 percent of the reviews were positive. In addition, negative reviews were generally considered helpful by shoppers — another sign of a positive shopping experience that results in customer satisfaction.

  6. It also increases customer recurrence. Guidance and research firm Synovate conducted a survey earlier this year where we asked online shoppers to choose what makes them return to a given shopping site. 35 percent of all respondents said they’re most likely to return to a given shopping website if it makes recommendations on products or services for sale. Anything that makes the online shopping experience easier and more enjoyable will make your site that much more memorable to your customers, thus increasing customer loyalty and recurrence.

  7. It helps you initiate free word of mouth. Keep the conversation going outside of your online store with web applications and widgets on social networking sites like Facebook and MySpace. That way, you’ll be using social commerce as both a lead generation and a conversion tool. Great examples of this are Amazon.com’s two Facebook applications called “Amazon Giver” and “Amazon Grapevine”. The applications were built to let users share their wish lists and product reviews with fellow Facebook users.

  8. Your sales conversions will go up. The sense of relief your customers experience when they know there are about to make a well-informed purchase – enhanced by reviews, ratings, comments and other options – make customers less stressed about clicking on the “checkout” button. A recent Coremetrics study found that people who read a review are 30 percent more likely to purchase a product while those who wrote a review were 80 percent more likely to convert, compared to a group that didn’t read or contribute product reviews.

  9. Your customers are demanding it. 64 percent of consumers reported wanting to see user ratings and reviews on online stores, based on a Forrester study of 5,000 online shoppers. User reviews have become an important step in the purchase process of today’s online shoppers, letting them know beforehand whether they’ll be able to deal with any potential product limitations, prior to completing the purchase.

  10. Competitors have their eyes on it, and so should you. According to a 2007 report by Marketing Sherpa, 43 percent of retailers have user reviews on their online stores. This number continues to grow, as well as the number of social commerce features and functions deployed by today’s online stores.


Want to learn more about social commerce? Guidance designs, builds and maintains eCommerce websites, using social commerce and the best of Web 2.0 to create captivating shopping experiences, helping each client become a dominant force in the market. Call us today at (310) 754-4000 or visit our website at www.guidance.com.

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