There’s so much more to social commerce than a Facebook store

Comparing HMV’s and Penguin Books’ social commerce efforts exposes major disparities in brands’ grasp of this complex tool.

The new media industry may be obsessed with new ideas, but it’s got a poor track record in coming up with names for them. “Social media” is a great example; leaving aside the fact that all media is social, any definition that pulls together such a disparate group of channels as blogs, micro-blogs, social networks and media-sharing sites under one heading is confusing things more than it is explaining them.

This is just as true with “social commerce”, which arrived in our vocabulary last year and also covers so much ground as to be virtually meaningless.

The issue was highlighted for me by a couple of things I read recently. The first was a column in NMA by social media consultant Ilana Fox. In it she was fiercely critical of HMV’s recent decision to open a Facebook shop, a move which she saw as a waste of time and a distraction from the company’s real problems. She also made it clear that she didn’t see a Facebook store as real social commerce, compared to using social media to create conversations around its products.

HMV is one of a number of retailers to have opened a Facebook store recently, and the rationale is similar in each case. The social network offers a compelling mixture of massive reach and niche targeting; one person responding to Ilana’s column described having a Facebook store as opening a shop on the busiest high street in the world. The move also takes on board a long-standing piece of etail wisdom the importance of reducing the number of clicks between a potential customer and their purchase. A Facebook store offers people the chance to buy something they may just have been talking about, without leaving the social network.

But I don’t think Ilana’s wrong about using Facebook as a transactional site. Shortly after reading about HMV I read the Strategic Play feature about Penguin Digital that will appear in Marketing Week’s Digital Strategy supplement next week. In it, Penguin Digital MD Anna Rafferty outlines the company’s key concept of discoverability; of helping readers who don’t know what they want to read next to find a book. To achieve this the publisher uses a lot of traditional marketing techniques But it also employs the techniques that characterise deeper forms of social commerce, such as online communities and user-reviews.

The difference between these two approaches was highlighted by a recent visit I paid to HMV’s main website, which tries to follow Amazon’s model by offering customers the chance to review products. For the artists I was browsing, however, this seemed to have been largely unsuccessful.

Then a couple of weeks ago NMA published some exclusive research we’d commissioned from Lightspeed into online music buying habits. One startling statistic that emerged was that, when it came to finding new music discoverability broadcast media were the most popular sources of information. Radio scored best, being used by 42%, then TV with 16%. A further 16% took recommendations from friends, but only 6% used music sites and 4% used social networks. What this suggests is that, although sites like Last.fm and Spotify have been grabbing the headlines, they have yet to make significant inroads into radio’s dominant role in music discovery. More importantly, music sites have clearly failed to take advantage of people’s passion for music and their willingness to talk about it and turn it into the kinds of resources that drive discovery in the way that Penguin is doing.

In the old days, of course, they didn’t have to. The value chain was such that the labels and the acts themselves did the promotion and the retailers handled sales. But now every brand owner is also a media owner, an idea that the music industry has been slow to catch up on.

What’s more, every brand owner is also a participant, willing or otherwise, in social media. The opportunity exists for any music retailer to create the environment in which fans can discuss their existing passions and where, as a result, they can discover new ones. There are risks, of course. Not all the comments will be favourable, but retailers who have embraced user-generated reviews have discovered that diversity of opinion suggests authenticity, a vital commodity in the online world.

Obviously what works for one company or one sector won’t automatically work for another, so experimentation remains vital. HMV’s Facebook store may work or it may not and the Lightspeed Research figures look less than encouraging but whatever happens the company will have learned something about how its customers use social media. The important thing is not to mistake a Facebook store for the full panoply of social commerce.