• December 1, 2015
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

E-Commerce Gets Social

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SAP in mid-October expanded its e-commerce offerings with Jam Communities for SAP hybris Commerce, enabling brands to embed e-commerce capabilities directly into their social community pages. The company followed a similar move in mid-August by Salesforce.com to allow companies to embed Buy Now buttons into their social communities built and managed using the Salesforce Community Cloud.

Consumers are increasingly buying products online, and their decisions are often influenced by peer guidance that they find via Web search, explains Sameer Patel, senior vice president and general manager of products at SAP. But while many companies are equipped with strong community pages that tend to drive significant Web traffic, most forums do not allow for an easy transition to their e-commerce platforms, Patel says.

Both SAP Jam Communities and the Salesforce.com Buy Now button aim to craft a more linear path for the buyer, one in which he can naturally make purchases right from within the online community.

Mike Stone, senior vice president of marketing at Salesforce Community Cloud, says such functionality allows social communities to become more than just places for collaboration but a new channel where companies can sell products or services.

That's a good idea, according to Michael Fauscette, vice president of the Software Business Solutions Group at IDC. "Adding in the capability to buy inside [a social community] seems like a natural extension of the interaction," he says. "It's a step toward frictionless commerce, making it easy for a customer to trust, learn, interact, and purchase, all in a single, connected environment."

And while it's hard to say how much money could be forfeited when customers have to leave the social community to buy the items discussed there, few would deny that there's a strong possibility for lost revenue.

"Creating easier ways to purchase prevents the frustration that can come from having to switch environments and experiences to some other Web property or store," Fauscette says.

Conversely, offering that unified experience "is likely to increase sales, if implemented correctly and the experience is positive," he adds. "From a commerce perspective, it's just one more asset to help you influence a prospect in the right way or get him to the purchase decision."

Patel points out another advantage: Giving buying options on social community pages will provide companies with better access to data about customers' tendencies and preferences, he says.

Ray Wang, founder and principal analyst at Constellation Research, sees the SAP and Salesforce.com products as part of a much larger shift in the wider business environment.

"In general, it's now about campaign to commerce," he says. "The only two metrics that matter are click-through rates and conversion rates."

In this accelerated sales environment, customers want to be able to define their own journeys, "and they expect that context is carried across the campaign-to-commerce life cycle," Wang adds.

By keeping the conversation and the sales process within the same community, retaining the context is almost guaranteed, according to Wang.

He does, however, warn that what applies to private social communities doesn't carry over to large social media outlets like Facebook and Twitter. "The goal is to move traffic from a public community into your community so you can provide a complete experience," Wang says. "You don't want to wall the garden, but you want to drive folks into the garden so you can deliver on your experience."

But not everyone is sold on the idea of blending community and commerce. "I am not a fan," says Denis Pombriant, founder and managing principal at Beagle Research. "Adding commerce to a bona fide community confuses the issue so that you have neither commerce nor community. Communities are places where information is vetted. When they become both information vetting and commerce sites, one pollutes the other."

And that could have a domino effect, he adds. "Adding buy options can make everything you get from social media suspect, and if that happens, you might see fewer people bothering to engage with brands there."

Nonetheless, Wang expects that as social communities and e-commerce do intersect, more CRM players will acquire e-commerce technology providers. SAP, for example, acquired hybris, a provider of e-commerce technology, in June 2013.

"In Salesforce's case, they don't have a commerce engine today, but the buy button is a key action that customers expect to have in their CRM system," he adds.

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