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ShopVisible Social Commerce Whitepaper 2011

Created 23/09/11
Author Name ShopVisible
Author Company ShopVisible
Body of Topic
Five Misconceptions & Realities About Social Commerce in 2011

In this paper you will learn:

How to define social commerce

The difference between e-commerce and f-commerce

How social commerce provides tangible ROI

Best practices for social commerce

Five Misconceptions and Realities About Social Commerce In 2011

Table of Contents

I. Executive Summary 3
II. Introduction 3
III. Five Misconceptions Regarding Social Commerce 4
Misconception #1 Social Commerce does not provide measureable ROI 4
Misconception #2 Social Commerce Equals Group Buying 5
Misconception #3 Social Commerce is just adding a payment button to my fan page or a copy of my ecommerce site within Facebook 5
Misconception #4 Putting a promotion code for a discount on Facebook is Social Commerce
Misconception #5 Simply linking from Facebook to your website is Social Commerce 6
IV. What is Social Commerce 7
V. The Reality of Social Commerce Today 7
Research Methodology and Findings 7
Best Practices for Social Commerce 8
VI. Conclusion 9
Find Out More 11
Bibliography 12
Author Bios 13
I. Executive Summary

Social commerce is a new form of online retail that creates valuable interactions between marketers and consumers, integrating social networks, viral media, and promotions within the context of social platforms enabling true commerce capability. While many retailers are eager to explore the possibilities of implementing Facebook storefronts, others are skeptical of its place in the marketing mix and more importantly the ultimate ROI on these activities. In the following discussion, we present five common misconceptions around social commerce, and offer some defining characteristics of this new, evolving space.

Steven Emery, HealthPort
Director of Product Management


According to the Annual HIMSS Leadership Survey, “Meaningful Use” is the number one priority of hospital information technology departments for 2011. More than 20 billion dollars in federal incentives are available in the next four years, and billions in penalties will follow. While Meaningful Use is about medical records and electronic health record (EHR) use, a small portion of the program focuses on release of information from the EHR. The remainder of the requirements concentrate on clinical events, and functions specific to EHR systems. As with any new program, the rules are the tip of the iceberg, while implementing them uncovers numerous additional questions, issues, and points of interpretation. This white paper will provide a basic primer on Meaningful Use and then delve more deeply into the specific rules and fine print surrounding Meaningful Use and release of information.

Executive Summary

Meaningful Use refers to a series of requirements and reporting using certified EHR technology. The requirements will increase in complexity, and the thresholds will gradually be raised over the course of three stages. Hospitals and eligible professionals (mostly doctors) can receive significant incentive payments from The Centers for Medicare & Medicaid Services (CMS) for the first four years of the programs (2011-2014) by meeting the Meaningful Use requirements. After 2015 CMS reimbursements will be reduced by 1% annually, up to 5% total, for all hospitals and eligible providers who do not meet the requirements.

Facebook stores do offer promising ROI, particularly given some of the early data around the higher conversion rates exhibited by consumers who are “fans” of a brand. However, comprehensive integrated commerce within Facebook is just in its infancy, and consumer behavior is now being established. Group buying sites like Groupon, demonstrate consumers’ interest and enthusiasm for taking deals and promotions viral via social media. But discounts should not be the only element of a marketers program. Deal sites and group buying should be a piece, rather than the whole pie, of a company’s overall social commerce strategy. Additionally, Facebook stores should not completely replace or reproduce an ecommerce site, but function as a unique experience that leverages the qualities and activities that engage consumers for the very reasons they are there. What we are discussing are true examples of commerce enabled Facebook stores and experiences that engage customers within Facebook, enable them to collaborate and share without ever being taken out of that environment. Facebook fan pages that appear to have shopping capability but ultimately link out of Facebook are a good start, but are ultimately disruptive of the conversation inherent to social networks. The data from our own client research revealed several additional qualifiers of social commerce and give examples of best practices to follow when building one’s own Facebook store.

II. Introduction

In recent months, social commerce has become a hot topic in the marketing world, with marketers adding implementing some form of social commerce within Facebook to their “to-­- do” lists. In 2010 it became clear that fan pages represented a major avenue for reaching a wide and involved consumer base, 2011 is the year of the customized Facebook selling experience. A recent comScore survey of 1,787 adults discovered that 28% of Facebook users have purchased something online via a Facebook link, and that 35% of consumers “would” buy products on Facebook directly.1 Facebook stores represent the next frontier of online shopping.

While many companies have already taken action, there are many pieces and parts out there. A myriad of platform providers have introduced social “extensions” to their traditional ecommerce offerings, ranging from simple fan page tabs featuring external product links, to full-­-fledged customized and all-­-encompassing storefront interfaces. Given the wide array of features existing on Facebook shop pages, we ask: How does one define Social Commerce in 2011? In this whitepaper, we will examine several misconceptions and definitions around social commerce within the ecommerce landscape.

III.Five Misconceptions Regarding Social Commerce

Misconception #1: Social Commerce does not provide measurable ROI

Social media has for some time been relegated to the areas of research, development and experimentation. Until recently, efforts have primarily been aimed at accumulating fans. But now, marketers should be asking: what is the value of a fan? Social commerce is the natural next step in the evolution of commerce and while it is in its infancy, the early data is promising.

Social commerce does have detractors who argue that Facebook commerce investments have unclear returns thus far. However, this is not an indicator that it will not work – but rather, this is the time in which consumer behavior is being formed. Technology is no longer the limiting factor; marketers are now able to access the tools that enable more compelling programs and experiences within Facebook.

Early evidence for social commerce is positive. We have seen conversion rates for Facebook storefronts that double those of the company’s primary ecommerce site. Research also indicates that a consumer is 51% more likely to purchase from a retailer after “liking” their Facebook fan page and 28% of Facebook users already bought a product online via a Facebook link. Lastly, fans spend 117% more than non-­-fans, signaling that brand loyalty has clear revenue effects within Facebook.3 In other words, social commerce storefronts are on track to become key vehicles to ROI generation for retailers.

Misconception #2: Social Commerce equals group buying

Groupon, Living Social, and countless local emulators have enjoyed widespread adoption and success, which many have attributed to the social manner in which deals go viral. It is important to recognize that anything that connects consumers, brands, products and services with one another is part of what is the growing domain of social commerce. However, the group-­-buying phenomenon represents just a single element of what can embody social commerce.

There is no question that social environments and promotions are a virally charged pair. Large- scale retailers such as American Apparel and Old Navy have successfully leveraged Groupon to trigger flash-flood consumer response. Well- established brands strategically display group deals on Facebook and Twitter to further promote their reach. Enlisting customers and providing incentives for them to share, congregate and act based on collective activities is just a small fraction of what social commerce can be.

Misconception #3: Social Commerce is just adding a payment button to my fan page, or a copy of my ecommerce site within Facebook

Technology and social media empower today’s consumers to be increasingly connected and retailers need to effectively move into these social environments to keep up. Thus social commerce should be regarded as a natural extension of an overall commerce strategy. Adding a payment button to Facebook is a start, but should not be the end of social commerce activities. Additionally, simply replicating an ecommerce site – with the exact same product catalog and user experience does not take advantage of the social medium and the reasons why people are there in the first place.

Retailers who differentiate the Facebook stores from the traditional ecommerce websites are engaging in social commerce. Shopping is inherently social and social commerce provides a unique experience that takes advantage of that characteristic. With the rapid development of social commerce technology, marketers have the opportunity to create unique shopping experiences that are interwoven within the social networks. True social commerce gives retailers, friends and fans the ability to share, like, collaborate with friends, and spread experiences and reviews in an environment like Facebook.

At the other end of the spectrum, social commerce storefronts still apply the fundamental tenants of ecommerce that have been hard fought and learned over the last two decades. Retailers who simply add a payment option within their Facebook page aren’t going to see overwhelming results. Customers have certain expectations that are simply table stakes for anyone looking to engage in commerce via Facebook. Effective social commerce initiatives provide a rich experience that is user friendly, easy to navigate, abundant with secure payment and shipping options and PCI compliant.

Misconception #4: Putting a promotion code for a discount in Facebook is Social Commerce

Consumers love promotions and many look to Facebook fan pages for a deal, but social commerce initiatives create much more compelling and valuable reasons to engage with brands. Moreover, social commerce can do much more than offer consumers yet another place to find a discount. The average US adult follows six retailers and does so to see special deals, product news, and to participate in promotional and other in store events.

Promotions represent a small part of the marketing mix and retailers must recognize that if the strategy is simply to post discount codes, that’s all fans will equate with the Facebook page. If the only think you are doing is presenting one discount after another, eventually those posts will just become noise. Retailers must continue to provide content and experiences that are worth sharing.

Misconception # 5: Simply linking from Facebook to your website is Social Commerce

With over 650 million users, Facebook represents an entirely new online landscape, where people are congregating and colonizing based on their shared interests, affinities, and experiences. The average Facebook fan is spending over 50 minutes per day on Facebook – friends and fans are interacting, engaging in conversations and sharing. Taking your consumer out of that context is disruptive.

The objective and opportunity for social commerce is to provide shopping and buying experiences that are within the context of those social interactions. Adding steps to a buying process, more clicks to checkout, and launching of additional browser windows cause conversion rates to deteriorate.

IV. What is Social Commerce?

With misconceptions presented, our focus turns to what social commerce promises for retailers. Social commerce presents the opportunity to create engaging and viral experiences, enables consumers to explore products, share and collaborate with others, and make purchases in a social environment. Social commerce should offer content that is relevant to the social environment and an experience that is unique to the main website due its social capability. Social commerce breaks down the one-to-one relationships forged in traditional customer-to-retailer communication in favor of socially connected instruments that serve to spark social conversations among connected users.

V. The Reality of Social Commerce Today

Research Methodology & Findings

The ShopVisible marketing team conducted a study examining five specific aspects of embedded Facebook stores. To obtain the social commerce data, we analyzed 50 randomly chosen Facebook fan pages that offered users a shopping experience. The brands spanned multiple industries including: apparel, electronics, entertainment, utilities, services, outdoor equipment, and sports franchises. When investigating each storefront, we asked the following questions:

  • 1. Does the store link out of Facebook for checkout/payment?
  • 2. Does the store require user permissions to access it (“Allow” button)?
  • 3. Does the store have shareable or likeable products?
  • 4. Does the store indicate a secure checkout logo prior to credit card entry?
  • 5. Does the store utilize an application or is it within the interface frame (sidebar intact)?

For the purposes of this analysis, if at any point the user was taken out of Facebook prior to adding any item to a shopping cart, we did not consider that a completely embedded experience and is not included in the data.

Characteristic Yes No
Store linked out of FB for checkout 40% 60%
Store required user permissions 16% 84%
Store had shareable products 82% 18%
Store indicated a secure checkout* 69% 31%
Store utilized an application platform 72% 28%(frame)

Source: Base of 50 online retailers. “Five Misconceptions & Realities about Social Commerce in 2011,” a study conducted by ShopVisible LLC.

Best Practices for Social Commerce

The findings obtained from examining the individual storefronts, uncovered several basic best practices that brands should take into consideration when deploying Facebook shopping experiences.

Include like and share features built-in to each product’s description:

Based on the findings, 82% of stores currently feature either a like or share feature (or both) that allows shoppers to post a product to their Facebook wall where they can ask friends about a product before purchasing. We consistently see that consumers trust the perspectives of friends first, other consumers (even strangers) second, and lastly companies recommendations.

The average Facebook user spends roughly 55 minutes per day on Facebook, ”likes” an average of 80 pages and creates 90 pieces of content per month. This suggests that if you provide your fans with meaningful and positive experiences, they will be the most powerful voice and advocate for your brand and products. People like telling their friends when they discover something of interest, why not allow Facebook users simple access to do so?

Do not require any user permissions to access the store:

Understandably, most users on Facebook shy away from pursuing anything that prompts an “Allow Access to Profile” message. Consumers are wary of granting outright permission to their profile information, list of friends, and other data that can be used by the retailer at any time. It’s a clear deterrent, yet 12% of surveyed stores require visitors to allow profile access before even entering the store. Another 4% require users to “like” the brand page before they can browse products.

While retailers might benefit from the information gained from requiring access, they risk aggravating consumers concerns over privacy. Retailers must balance gathering personal data too early in the process with the drop in conversion if the interaction is considered too intrusive.

Indicate your Secure Checkout ID prior to credit card entry:

Making a purchase within Facebook is a relatively new concept for most consumers, but making a purchase online is not. Consumers know what to look for when assessing whether they are in a secure payment environment. Social commerce storefronts should ensure payment authorization and security prior to any sort of checkout entry. However, of 29 stores that featured checkout within Facebook, nine stores (31%) gave no indication of transaction certification from widely recognized VeriSign, DigiCert, McAfee, or TRUSTe on their shopping cart pages.

Protecting consumer data must be treated with the same care and security as a traditional

ecommerce transaction. Trust remains paramount in the evolution of consumers’ acceptance of routinely buying products from companies within Facebook. Stores will need to ensure they maintain PCI DSS compliance, should offer familiar alternate payment methods (like Amazon Payments, Google Checkout and PayPal) which all will help ease the potential concerns customers have over the privacy and security of their information.

VI. Conclusion

In a short amount of time, Facebook has changed the ecommerce landscape and we are just beginning to see the very tip of the iceberg of sales growth and opportunity within social networks. Best practices are emerging; technologies are now available to allow marketers to test, learn and build a whole new set of consumer behaviors and online marketing strategies that are specifically designed around social commerce. By focusing on the development of a socially integrated storefront, brands will undoubtedly see returns in the long run.


We hope you’ve enjoyed this paper on the current state of social commerce. If you’d like to discuss any of the approaches or insights in this white paper, we invite you to call to speak with our team.



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Contact ShopVisible

945 East Paces Ferry Road
Suite 1475
Atlanta, GA 30326





comScore survey, April 2011

Client Connect Survey by ShopVisible, May 2011

comScore survey, April 2011

Client Connect Survey by ShopVisible, May 2011


About the Authors


ShopVisible Marketing Team

Kendrick Woolford, Marketing Manager
Email: kendrickw@shopvisible.com
Twitter: @annkendrick

Lauren Smith, Marketing Coordinator
Email: laurens@shopvisible.com
Twitter: @GFandSouthern

Zach Ritchken, Marketing Analyst Intern
Email: zachr@shopvisible.com




ShopVisible is an on-demand ecommerce solution provider that delivers tools and services designed to streamline and advance retailers’ online businesses. ShopVisible offers unified management of the entire ecommerce ecosystem, providing the flexibility and insight to meet even the most complex business needs. Its rapid development and deployment model ensure speed to market and constant innovation. ShopVisible merges all systems and processes into a single, intuitive interface allowing customers to focus on growing their business instead of wrestling with technology. For more information, visit www.shopvisible.com or call (866) 493-7037.

For more information, visit www.healthport.com
or contact HealthPort Marketing at
800.737.2585 or marketing@healthport.com

TAG’s article library is optimized by Atlanta SEO company Vayu Media, provider of search engine optimization services to technology companies nationwide. Vayu Media develops internet marketing strategies that drive business growth through sales generation and brand awareness.


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