Originally published 5 March 2012
Lately I’ve been having a lot of conversations with clients about social commerce as an aspect of social business.
With social networking, and Facebook in particular, such a dominant activity online, it would seem like a logical next step for any brand with a well-established community. Yet recent stories of high profile brands shutting up shop on Facebook are bound to make businesses think carefully about whether or not it’s the right thing to do.
Social networks, by their very nature, exist to facilitate relationships between people. This means any business that wants to introduce a commercial aspect to its presence on a platform, must ask what role the transactions it is asking the community to participate in have to play in the relationships being established online.
In other words, it’s a matter of thinking beyond creating a storefront and instead identifying the social value of the brand – the innate quality that inspires people to talk to you, talk about you and make you a part of their social experiences. The implication is that brands need to revaluate the essential principles of their business models for a more social context. This is no easy challenge and those brands that have concluded social commerce experiments over the past few months have most likely been asking themselves similar questions in evaluation.
This is where the difference lies between a social media business and a social business. To be successful, a brand must think beyond launching an established retail model on a social platform and instead be prepared to be transformative in its approach to business.
Faisel Rahman set up Fairer Finance – a social business in the truest sense of the term – to help people who are financially excluded get access to financial services in his native East London. He has been able to successfully apply the principles of microfinance he implemented in Bangladesh for the World Bank, to help poor communities in the developed world – an innovative solution to an old and seemingly intractable problem.
Key to Faisel’s success is being present in, and connected to, the communities where the business operates. By doing so, Fairer Finance can truly understand the needs of its customers and the factors affecting their lives and then develop services accordingly.
It’s this kind of innovative thinking, willingness to question accepted ways of doing business and commitment to community that will make established businesses successful in creating a new, social dimension to their commercial activities, whether online or off.
Social commerce is in its infancy. It takes a long time to establish a successful bricks and mortar store and even longer to grow a thriving marketplace. With continued experimentation and innovation I expect we’ll soon see new models emerge.