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4 Reasons Why Buyers and Sellers Shouldn’t Dive Head First Into E-Commerce



gettyimages 490444688 4 Reasons Why Buyers and Sellers Shouldn’t Dive Head First Into E Commerce

Social commerce sites, like Facebook Marketplace, simply aren’t as big or well-known as the major e-commerce marketplaces. Justin Sullivan/Getty Images

Industry experts are buzzing about “social commerce,” but a lot of sellers are hesitant to invest the time and money needed to pursue it. Sellers in this camp may be wondering why they feel so dubious about social commerce and whether or not they should be investing more.

Social commerce may not be right for everyone (yet). Here are some good reasons for the mixed reception of social commerce at the moment.

It’s Hard to Find and Ill-Defined

Nobody’s sure what social commerce is yet; the term has been used to refer to everything from ad retargeting on social media sites to person-to-person trading via Facebook Marketplace to community-oriented crate subscriptions to using Facebook logins on e-commerce sites and using this to collect analytics data on shoppers.

Targeting “social commerce” can easily leave a seller confused right now, and many of the newer platforms that are associated with it—like Facebook Marketplace—have only a fraction of the shoppers that regularly visit eBay or Amazon. Access is limited to platforms, applications, or communities that just aren’t as big or as well-known as the major e-commerce marketplaces.

It’s Harder for Most Shoppers to Use

Even when they stumble across social commerce, many shoppers aren’t ready to embrace it yet. Traditional e-commerce has the shopping experience down to a science in which seller ratings are clear, buying and paying are easy, and fulfillment happens quickly and is eminently trackable. Not so with many of the most cutting-edge social commerce platforms. There, the experience is a lot like the e-commerce experience of the ’90s—steeped with unfamiliarity, improvisation and uncertainty.

This isn’t just bad news for shoppers; it’s also bad news for sellers. Every seller knows that one of the keys to success is reducing friction and enabling impulse buying. Both shoppers and sellers want the purchase process to be easy, rather than as obscure. Social commerce doesn’t offer this ease across the board yet.

The Shopping Experience Isn’t as Strong

It’s not just the purchasing experience in social commerce that lags behind e-commerce more; the shopping experience does as well. Product and vendor selection are still limited. Browsing and searching are often more difficult, particularly given the far lower product and vendor selection. Of course, this is a chicken-and-egg problem: less product availability and visibility means fewer shoppers—but fewer shoppers means fewer sellers and, by extension, products.

Meanwhile, shoppers have a harder time evaluating the products and sellers that are there. The Amazon catalog and the eBay community have produced marketplaces that are, by now, very professional. Images are high-quality, seller ratings are clear and fairly comprehensive, product reviews are immediately available, return policies and expected shipping times are evident, and most problems can be solved using on-platform workflows that require just a few clicks. In short, it’s easier to make comparisons in traditional e-commerce—of products, of sellers and of offers—and there’s often a higher level of accountability.

Many Shoppers Aren’t Into It

Many shoppers associate terms like “social” with sites and networks that collect their data and exist primarily to monetize and share it. So, while some sellers are excited by the prospect of leveraging this trove of data to increase qualification and conversion rates, many shoppers instead see social commerce as yet another risky online behavior that endangers their privacy. It will take time for this attitude to change, and sellers that look or sound “too social” could end up losing traffic and sales as a result.

Run a Good Business, Just as You Always Do

Right now, sellers’ time is better spent selling where shoppers are, using tried-and-true methods and marketplaces.

How’s your regular e-commerce business doing? If there are fundamentals you’re still working on, focus on those first. Social commerce is probably not the most efficient way to try to turn around a struggling business at the moment. Sure, there are new shoppers to be had, but there are a limited number of them compared to the massive amounts that exist on the biggest marketplaces right now.

The best bet for sellers is to simply run good businesses, to focus on satisfying customers, and to grow effectively. The rest will take care of itself, including any social commerce practices that sellers decide to adopt on the merits—rather than because they believe that social commerce is the “next big thing.”

It’s not that social commerce is bad or will never take off. But the reasons above explain why many sellers are dubious and why social commerce has a bit of a hill to climb. As a whole, e-commerce is exploding, works very well, and has delighted countless shoppers. Social commerce is foggy, harder to use (for buyers and sellers alike), and isn’t quite there yet.

That’s not to say that social commerce is out of the question forever—merely that there are other options that are more likely to deliver value for sellers right now.

 

Ultimately, social commerce is still in its infancy. Social commerce today is likely not what it will be tomorrow. Down the road, there will be a lot of opportunity in social commerce for many sellers, and there’s a big, bright social commerce future ahead for many social commerce consumers as well. In the meantime, there are sales to make and businesses to run.

Kevin North is CEO of e-commerce analytics provider Terapeak.




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