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4 Emerging Social Commerce Tools for Retailers

By Michael Olson | Posted on June 01, 2011

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When Howard Schultz came on board with Starbucks in 1982 and, after visiting Italy, advised the company to evolve its business from coffee beans and accessories to coffeehouse culture and espresso by the cup, the idea was initially met with rejection from company founders. Given Starbucks’ meteoric rise over the next 20 years, the rest is history, with the lesson that businesses need to be cognizant of market trends and embrace new revenue channels that promise growth.

social commerce cart

Similarly, retailers now ignore social channels at their own risk, and a number of recent market trends have coalesced to make social commerce a top of mind objective. A majority (58%) of all consumers now research products online before purchasing, and half of those consumers publish comments or reviews online about the products they buy. Global eCommerce revenue figures continue to grow at a faster rate (19%) than the economy as a whole. 650 million users have flocked to Facebook to interact and share with friends. These developments have created a fertile ecosystem both for retailers seeking to cultivate new revenue streams and for platform vendors providing solutions to enable social commerce.

SocialTimes Pro examined these topics in depth in its recent report, “Social Commerce: How Facebook Stacks Up Against the (Current) Competition”. The author, Tameka Kee, consulted Janrain’s Tore Steen among a panel of experts from other companies making a splash in the social commerce space. The report details several strategic points of emphasis for retailers seeking to leverage social to grow conversions, including credits, social identities, ratings & reviews, and mobile check-ins.

It sparked some stirring conversations around the Janrain office, so I thought we’d offer our take on the following:


Core to Facebook’s progression purely from a community site to an engine for commerce transactions was the 2009 launch of Credits, its virtual currency. Sold at 10 credits to the dollar, users can purchase virtual goods within social games or other apps while on Facebook. Beginning July 1, all social game developers will be required to accept Facebook Credits as a currency in their games, and special incentives will be offered to companies that accept Facebook’s method of virtual payment exclusively.
The introduction of Credits brought many retailers to Facebook’s doorstep in a new context. Beyond brand building, product promotion and customer service, Credits was seen as a way to now facilitate commerce transactions within a social environment.
While the introduction of Credits has certainly helped reinforce Facebook’s position as an enabler of social commerce, universal buy in from retailers may be difficult to achieve. Some companies, such as deviantART, sustain their own vibrant virtual economy in part by enabling purchase of physical goods with their own brand credits. Coupled with the fact that these retailers can circumvent Facebook’s 30% commission for Credits transactions and thus retain higher margins, it comes as little surprise that the concept of virtual currency beyond Facebook’s borders is gaining traction among retailers.

Social Identities

Retailers may try to encourage creation of user accounts on their site for several reasons. They may wish to learn more about their consumers for targeting or personalization, build relationships and foster retention through special offers and promotions, or unify customer intelligence and track behavior across multiple commerce channels such as online, in-store and catalog.
But traditional acquisition methods can be a headache for consumers, who often are averse to completing lengthy registration forms and may provide inaccurate information if asked to do so. This is where social login emerges as a viable solution. By leveraging a consumer’s existing social identity and expediting the registration process to one or two clicks, retailers can simultaneously encourage the use of real identities during checkout, collect richer demographic and social data on their consumers, and reduce shopping card abandonment.
A December 2010 study by Blue Research confirmed that social login is preferred over traditional account creation or guest checkout.

consumer research preferred signin methods

The study also revealed that these consumers who prefer to use their social identities to interact with sites across the web (labeled as fans below) are more valuable to retailers. They tend to buy more often online and are more likely to rely on their social networks to influence purchase decisions.

consumer research ssi users

Furthermore, these consumers are nearly twice as likely to make a purchase on a site that automatically recognizes them.

consumer research likely to buy

So, we’ve entered a climate in which online consumers prefer to use their real identities from a social network to access sites on the web, and those who do so are far more lucrative buyers. The question then becomes which social identities to support for registration and login. While Facebook is a natural option, our data across the 350,000 websites using Janrain Engage for social login demonstrates the value of choice. Specifically among retail sites, Facebook is the most popular social login provider, but half of all consumers prefer to use an identity from Google, Yahoo! or other networks. Retailers that only support Facebook may be leaving as much as half of their potential audience in the cold.

retail social login

Ratings & Reviews

Ratings & Reviews platforms like Viewpoints, Bazaarvoice and PowerReviews help retailers integrate customer feedback and community features directly into their websites.
Over a decade ago, experienced such pervasive growth in part because it made user-generated content core to its shopping experience. In short, Amazon recognized two facets of human behavior that are intrinsically social – product research and shopping – and sought to replicate those behaviors in an online context, through ratings and reviews.
Despite Facebook’s sheer volume of users and abundance of user-generated content, ratings & reviews are finding a home on retailers’ own websites. Why? The ability to structure consumer reviews around product pages and other points of purchase on a site yields increased conversions, and ownership of data is a critical consideration for retailers that seek to engage their audience through personalization, recommendations or loyalty programs (more on this later).
Retailers also reap significant SEO benefits by housing product reviews on-site. 25-35% of traffic to large e-commerce sites is organic search, and Google favors fresh content (which is often user-generated) in its search results. Most retailers will assert that traffic directly to product pages produces the highest conversion rates, and blending product descriptions and marketing copy with consumer reviews on these pages creates optimized content that search engines simply can’t resist.
The report notes that these social commerce tools may also offer a suite of analytics that are more germane to retailers, who tend to be focused on transactional metrics such as conversions, sales or acquisition costs. Facebook Insights, by contrast, tends to deliver data on engagement metrics such as likes, fans and interactions.

These factors strengthen the case for on-site social integration, but Facebook still plays a huge role in directing traffic and influencing brand awareness for retailers, primarily through ads. With $4 billion in projected revenue for 2011, Facebook ads are effective at driving consumers to product pages within a retailer’s site, where the seller can then track user behavior, influence conversions and measure performance indicators with their more robust analytics tools.

Mobile Check-ins

By now, we all know that mobile is the burgeoning platform for social activity on the web, and shrewd retailers are harnessing this channel to uncover new revenue streams – primarily through check-ins. The incumbent players, Foursquare and Gowalla, were joined in 2010 by Facebook, which launched its Places feature in August. Even local reviews sites like Yelp, which can leverage its 3.7 million monthly mobile visitors and close relationships with local businesses, have entered the mix.

Facebook’s inherent advantage over these competitors is its scale. But regardless of which check-ins provider a retailer partners with, mobile check-ins offer numerous benefits. A “check-in” status update posted to a user’s social network feed exposes a retailer’s brand to that consumer’s social graph and provides a form of social proof – if one of my foodie friends spends her Friday evening at that new French fusion restaurant in town, maybe I ought to try it out as well.

mobile check in

But integrating check-ins can also have a direct impact on customer lifetime value. Retailers that offer badges, discounts or special offers to users who frequently check-in facilitate repeat business and loyalty. Game mechanics, when also applied to other value-added activities such as making a purchase, writing a review or referring a friend, make it possible to incentivize desired behavior, reward influencers, and keep customers coming back for more.

For social commerce to become an industry mandate, the metrics must shift beyond engagement to real dollars, because at the end of the day, playing in social only makes sense for retailers if it moves the sales needle. Integrating credits, social identities, ratings & reviews and mobile check-ins into your eCommerce strategy are an effective way to drive purchase behavior. Your customers are ready to start utilizing these tools to engage with your brand and product offerings. Are you ?

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About the author

Michael Olson

Michael Olson

Senior Product Marketing Manager

Michael Olson joined Janrain more than five and a half years ago and has experienced the explosive growth of the digital marketing technology landscape. Previously, he managed demand generation programs at Janrain. Currently, as the Senior Product Marketing Manager, Michael drives go-to-market strategy for product launches as well as positioning and messaging to communicate the value of customer profile management solutions to companies. Michael's writing has been featured in publications such as GigaOM, Adotas and iMedia Connection.

View all posts by Michael Olson