While e-commerce still represents a small slice of overall retail sales globally, trends in social media and mobile technologies will continue to fuel its growth in the future, said IESE Prof. Evgeny Káganer in a special session with IESE alumni on Thursday, May 11.
During the session, Prof. Káganer described how large established companies, as well as local merchants, can take advantage of social commerce to capture new audiences and improve products and services.
He described the cases of Spotify and Nordeus – two firms that have harnessed the power of Facebook to generate profits. However, the social networking giant isn’t the only platform that can create value, “you can also go through smaller, focused communities,” he stressed. He cited Dell Swarm as another initiative that successfully draws in customers through group deals.
In today’s new social environment, purchasing is driven by online conversations in which customers talk to each other and offer opinions that can resonate with very large audiences. This input can have a dramatic impact on consumers at every stage of the buying process, he said, from discovery to the final purchase.
He also warned companies not to put their social commerce initiatives in the hands of one single department, such as marketing or communications, he said. Instead, they should be cross-functional since they directly involve every link in the value chain. Firms should also have clear objectives when it comes to social commerce and find effective ways to integrate it into existing business processes.