This is the first of our four part series on the 4Cs of Social Commerce. We'll follow up this discussion of Commerce with subsequent considerations of Content, Community and Context, all of which together in our view represent Social Commerce in its current best-practice entirety.
In the early stages, when the first wave of shoppers went online a decade and a half ago, it was plain Jane ecommerce—neither pretty, nor terribly effective. More and more, as the digital becomes integrated with all aspects and every stage of shopping, its electronic dimensions will become less marginalized. Ecommerce will lose the 'e' to become simply Commerce.
Social Commerce is its most recent evolution—and its most dynamic, satisfying and lucrative. You can still find many primitive sites out there scraping online sales with circa-1998 techniques—true enough. Basic is classic. The foundation is that solid. But not only are later generations of strategies and tactics considerably more robust; consumer expectations are also rising, so that those who stay behind in their safe zone will find sales steadily dwindling. It bears saying, in retrospect, how far we have come!
At first, online shopping felt like a risky proposition at best. It meant having to send your credit card information out into cyberspace, where clever rascals could suck it out of the ether to steal your money. The technology by contemporary standards was primitive. Modems moved at crawl speed. Computers were constantly crashing. Sites never worked. Beach-balling was the norm. In retrospect, the whole experience was painful!
Not that it didn't have its upside too—like, errh,"No sales tax!" (no matter that you were supposed to report the sale in your own state of residence and pony up the sales tax there.)
The internet became available for commercial use in 1991, became the hot new thing in 1994, and within a few years—once security protocols were developed that allowed consumers to have relative confidence in handing over their credit card info—online stores were popping up in unprecedented profusion all across the web. It had arrived!
This first wave of ecommerce had come out of the so-called Information Revolution and, for the most part, it looked like it. Photos were shabby and crunchy (the point was to keep them low-res for fast loading). Generic design templates made everything look homogenously bland, like it was all produced by the U.S. Post Office. Product specs were what mattered—size, color, qty, etc.
Offerings were generally low-priced commodity merchandise—i.e. known quantities, discernible by SKU, with manufacture list price—so we could endlessly research to find the best price on any item. We didn't have price comparison engines yet, but still we could suddenly shop around for the cheapest as never before—anywhere in the Continental United States. Consequently, we no longer felt like the victim of our local brick & mortars, with their unfriendly high margins.
From the perspective of small local businesses, new markets opened up far and wide. For a long time, the web with its sophisticated search engines, felt like an even playing field. (Niche enterprises were especially well served—critical mass was hard to achieve on a merely local basis.) You could now reach a vastly wider audience of potential customers without having to invest in expensive print ads to get eyeballs—or catalogs (paper, printing + postage). Much of the country was sparsely populated. This was the way to access those markets. The emergence of Fed Ex and other expedited shipping carriers certainly didn't hurt.
Companies like LL Bean and Columbia House Records were going strong alongside large retailers intent on accessing small-town America with mail-order catalog businesses. The 1-800-NUMBER was king. When ecommerce emerged, these retailers had something that the flagships themselves couldn't match—mature order-fulfillment systems, warehouses and customer service centers. Thus it was the catalog divisions of major retailers who, in the first wave of the ecommerce revolution, came to own ecommerce across America.
Many saw the challenge as simply as getting the business's mail-order inventory up online. It was a logistical problem. The first order of business was cataloging all that stuff—getting a shot of it and all the product specs—especially tricky because any two things might appear next to each other, so they needed to be presented in parallel fashion. What much of America didn't realize is that it was hardly ever the same merchandise mix as the store carried—usually less sophisticated styles, less fashion forward, and at a lower price point. The fact is that many of the large retailers had become internally siloed, with different divisions essentially operating as entirely different companies with independent selections and promotions.
This early web business was still about squeezing the extra little bit out of the toothpaste tube. It was still a very small percentage of overall sales. At the end of the day, the catalog people never really concerned themselves overly much with branding. Their point of view, for better or worse, was based on solid facts. What they knew was that some items simply sold better than others. What mattered was sticking to the low price points (just like in fcommerce, now), proper placement on the page, getting the item to the customer in time for the holidays —and free shipping! The numbers told them all this. The tricky part with which they concerned themselves was the back-end and order fulfillment.
But not all early web businesses were so small-minded. Amazon's much bigger vision continues to form an important part of the foundation of contemporary Web best practice. A pure web-based business, with no brick and mortar presence nor retail sales staff—the theory went—it could offer consumers better prices. Without expensive catalogs to print and mail, it could offer a bottomless inventory online, where real estate was cheap. Warehouses too could be stationed off in the hinterlands, with far reduced operating costs. In a sense, this was the self-serve automat variety of the classic direct marketing business, circa 1968. It was a compelling model (although ironically Amazon didn't have a single profitable year until 2003).
But the space presented unique challenges. First among them was teaching the customer how to find the product they wanted. Sites quickly learned there were two distinct patterns of shopping—searching to find what you want (if you know) and browsing to check out the options (to discover something exciting and new). To succeed, they had to serve both. Presciently, Amazon pioneered top nav category tabs to organize the immense Chinese encyclopedia of stuff into a manageable menu of options. The basic scheme is still largely in place. On-site product search became a science.
Further, teaching the customer to navigate the complicated mazes of the checkout process was an even greater challenge. Cart abandonment was rampant. Shoppers wanted the stuff, but no matter how they tried, they just couldn't complete the process. Many of even the basic concepts eluded them. It's worth remembering, there were no conventions yet in place. Things like a shopping cart and breadcrumbs were not yet firmly established. Many brands even insisted on their own more branded nomenclature and processes (Tiffany doesn't have a shopping cart!).
For many, the answer was their own User Testing. This often meant the marketing team on the other side of a one-way mirror, gasping in horror at unforeseen user mistakes. When, in reality, we as a digital society were all just beginning to learn, the shame is that many executives at this time lost faith in the intelligence of their customer, resulting in a heritage of painfully explicit sites with every simple, intuitive step so over-explained (notes to Grandma) as to seem baffling in its complexity. Obviously, in retrospect, it was we digital marketers who had to learn. What we hadn't anticipated back then was the immense collective intelligence of the contemporary consumer. It is something we are only beginning to understand.
Fortunately, conventions did take hold. Navigating complicated processes is now for the mainstream consumer second nature. This early eCom generation, with Amazon leading the way, pioneered many of the best-practices still in use today, creating an amazing foundation for future generations to build on. Some innovations like ratings & reviews and personalized recommendations (again Amazon's) are only now coming into flower across the web.
Early eCom sites promised shoppers convenience, selection, and lower prices. To achieve that, they sacrificed the Pleasure of the experience and the fuller dimensionality of People and Places. Not surprisingly, it is precisely these time-valued aspects of classic shopping that next-generation web businesses have been working to achieve ever since—with increasing success along the way.
This is part 1 of a 4 part story about evolution of social commerce, and the 4Cs— Commerce, Content, Community and finally Context. In our next weekly installment, we'll explore Content as it evolved at the next stage. Read the introduction here.
dotbox CEO Ashley Heather is one of the pioneers at the intersection of ecommerce, social interaction and location-aware services. His companies include Musikube and Entertainment Media Works, which brought us StarStyle, StyleLogue and Plinking—in 2004, among the first Social Commerce websites. In his native London, he was the lead digital consultant at Impact Plus and an executive at Ford Motor Company. He is a frequent speaker at media industry events, including iBreakfast, CTIA Wireless, The Digital Coast Roundtable, MoMeMo, Social Media Week and is an Associate Member of IADAS. He can be reached at ashley@dotbox.com.
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