Social Media

Social Commerce Expert Cautions Against Spending Heavily

Paul Marsden is a market researcher and communications specialist in digital marketing. He assists organizations to communicate effectively online by helping them understand digital culture. He is social media strategist at Syzygy, a European-based advertising and branding agency. His recent clients include Nokia, BBC, Publicis, T-Mobile, WPP, The Economist and the U.K. government.

Marsden holds a PhD in psychology and led the research team at the London School of Economics that validated the link but between word of mouth reputation and growth. He has also authored a number of publications including the business book Connected Marketing: The Viral, Buzz and Word of Mouth Revolution.

Based in Miami, Marsden works with marketing and public relations agencies around the world, conducting market research and helping develop and deliver social media marketing and online PR programs for their clients.

One area in which Marsden places particular emphasis is social commerce. He edits a blog called Social Commerce Today, where he tracks the latest news and trends on the topic. Marsden shared his thoughts and insights regarding social commerce in a recent interview.

Social Commerce

Paul Marsden

Paul Marsden

“Social commerce is the new ‘black’ [the new style] in both social media and ecommerce circles. Working as a market researcher, I saw the increasing frustration of brands with social media and return on investment, or lack thereof. With the mainstreaming of social media use, the only way to solve this issue would be to tie social media investment to sales. It seemed inevitable that social commerce was the shape of the future.

“Social commerce is something of a moveable feast, with diverse sites and solution providers tying their flags to the social commerce mast. Areas of social commerce include user reviews and other social plug-ins on ecommerce sites, group buy platforms, flash sale shopping clubs, referral programs, community-driven ecommerce sites (such as Threadless), and yes, social media stores. The common theme is that all help people to shop using their social intelligence.”

What is Social Commerce?

“My best jargon-free definition of social commerce is ‘helping people connect where they buy, and buy where they connect,’ or in more metaphorical terms, ‘social commerce is about placing water-coolers next to cash registers, and cash registers next to water coolers.’

“Personally, I see social commerce as part of a broader trend in ‘shopper marketing’ where brands and retailers increasingly understand people as active shoppers who buy, rather than passive consumers who we sell to.”

Implications for Ecommerce Merchants

“Social commerce is both an opportunity and threat for ecommerce merchants. An opportunity, because social commerce tools allow merchants to harness one of the most powerful drivers of sales: word of mouth. It’s a threat, because those same tools shift the locus of power to consumers who increasingly prefer to trust each other. Social media turns up the dial on the word of mouth component.”

Facebook Commerce

“I would not want to underplay the current Facebook fetish. For ecommerce merchants, a Facebook store is simple, quick and inexpensive social commerce solution. But I would say social commerce is more of a strategic approach than a bunch of tools, and it begins by asking the simple question, ‘How can I help customers connect where they buy and buy where they connect?’ The answer might be a Facebook store, or it might be user reviews, ‘like’ buttons on product pages, or simply a customer forum.

“I recommend a simple four-step LEAD approach to developing social commerce solutions:

  • Listen to what customers are saying, and what competitors are doing;
  • Experiment with small-scale, inexpensive social commerce initiatives and tools to find what works for you;
  • Adapt what works into a permanent feature of the ecommerce experience you offer;
  • Develop the social experience, incorporating new tools as they become available.

“While Facebook’s social plug-ins are quite brilliant, powerful and simple to deploy, by using them the vendor is ceding control, information and to an extent their reputation to Facebook. There’s no right answer to the question, but my general view is that currently the advantages of using Facebook tend to outweigh the risks.”


“Whether on Facebook or the merchant’s own ecommerce site, taking people’s privacy seriously is essential, and vendors should emphasize that they do take customers privacy seriously. There should be a clear benefit to the customer for trading in their privacy, and it should be the customer that chooses to do so. The default setting for privacy should be ‘on.’

“We are seeing the status of privacy changing. Rather than an absolute good, privacy is now a relative good, with people increasingly prepared to trade-off privacy for utility and facility. The key is that any tradeoff made should be conscious and voluntary.”

Mistakes to Avoid

“Be wary of so-called social media gurus, particularly when they say you need to part with large amounts of money. At this point, social commerce is an experimental medium. Merchants should start by listening to customers, to the market, even the competition, then experiment with different low-cost approaches to see what works.

“Social commerce can be a win-win for vendors and their customers, helping them make smart shopping decisions with social technology. It just means that vendors need to sell products worth talking about. The casualty in social commerce is mediocrity. I don’t think anybody will miss mediocrity.”

Paul Chaney
Paul Chaney
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