From E-Commerce to Social Commerce

E-commerce has been around for eons now and most of us can piece together a fairly good definition of it. I’ve been looking into several companies who offer fully integrated ‘ecommerce’ solutions and as I adventured through various glamorous websites I started realizing that e-commerce is ‘so 2010’ and everyone is now raving about Social Commerce. So what is it?

My trusted fountain of knowledge Wikipedia defines it as ‘a subset of electronic commerce that involves using social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services’. Apparently Yahoo introduced the term some time ago to describe a set of online collaborative shopping tools such as user ratings and other user-generated content-sharing of online product information and advice. Given Professor Kagan’s emphasis on the fact we trust our peers recommendations more than companies – social commerce is fast becoming the only way to shop for customers and to shift stock faster for companies.

In the first 3 months of this year alone, $1.93 billion in funding was provided to social commerce start ups. Within this space, group buy businesses(such as Groupon ) and shopping clubs (e.g. Ideeli, KupiVIP) dominate but there are rising stars within social plugins for the ecommerce space and a new class of social reward platforms (social media powered referral programs e.g. MyLikes).

One good example of a social commerce company is Stylitics.com. A friend of mine started the company a year ago and it recently won the Wharton Business Plan Competition. It is a fashion insights company that provides a better way for brands to understand and connect with consumers. Stylitics use social media, games, rewards, and virtual closet features to give hand-picked consumers an easy way to share their styles and opinions with their favorite apparel brands and provide companies with valuable market insights compared to traditionally expensive consumer research methods.

Real time accurate insights in the fashion industry or indeed any industry are hard to come by. There is a lot of ‘social crap’ out there and if these guys find a way to filter it in a meaningful way by attracting insightful, fashion conscious and influential customers – the potential is massive.