There’s been some buzz about ‘social commerce’ this year, with a great WSJ article a couple weeks back: Retailers Embrace Social Commerce.
However, there’s not really such a thing as ‘social commerce’.
What these companies are doing is executing a ‘distributed commerce’ strategy.To really understand this profound shifft, it's worth watchign Sam Ramji's talk on evolving business models in his Web 2.0 Strategy presentation: Darwin’s Finches, 20th Century Business and APIs.
A key point in this talk is how business is migrating from a direct to indirect model.
The web revolution that gave birth to Amazon and eBay was based on a shift to a direct business model… retailers selling directly via their websites.
Today businesses are figuring out how to execute an indirect model. They are trying to put their product/service/content where their customers are.
To use some retail-speak, the nuance is that commerce is now about more than about 'selling in' a channel, it is about selling ‘through’ a channel.
So where are customers?
Increasingly, consumers are on the move and on their smart phones. They are on tablet computers like the iPad and on game consoles (xbox, ps3) and set-top boxes (roku, etc), and filling their car at gas stations.
Consumers are also spending time on social networks… which brings us back to ‘social commerce’.
Borrowing Sam’s Finches metaphor, retailers are exploring their ‘niches’… reaching out into the places where customers are, and selling in that context.
So a Facebook store is just one niche, one place to reach customers where they are. Gamestop is another retailer with a Facebook store. However, Gamestop is also on mobile device apps and other social networks. They are executing a distributed commerce strategy well. In the same issue as the social commerce article, WSJ reported that Gamestop’s profit rose 6.9% on higher sales.
Another example of distributed commerce is Shopsavvy, a mobile app that searches for products based on location and brings back pricing, availability and product attributes. Retailers want to be included in the shopsavvy app to have their products discovered by consumers in that venue. Shopsavvy itself is exposing its engine to developers who are finding niches of consumers via wine-specific apps, “Lego apps”, etc
In the post-web world, forward-thinking retailers are executing distributed commerce strategies to reach consumers where they are, including on social networks. Where are your customers? And what is your distributed commerce strategy to reach them?