By Glenford Scott – GSCOTTY.COM
To many social commerce is merely e-commerce with some Facebook plug-ins on the website (Facebook being “social” and e-commerce being well “commerce”) , but it goes much deeper than that. It goes deep into the mystical land of human social psychology.
The importance of social psychology can not be overstated. This branch of psychology deals with how people think about influence and how individuals relate to one another. In Facebook, Twitter, Google+, and every other network, the social economy within each is defined by how people earn and spend social capital. Based on the commerce of actions, words, and intentions (or actions, reactions, and transactions), individuals contribute to their stature not only within each network, but among those to whom they’re connected. The same is true for organizations. You earn the relationships and the resulting stature that you deserve.
So there are in total 6 pieces that put together the puzzle of social commerce that makes it such an intriguing industry. These 6 pieces are 6 heuristic shopping traits that humans follow when making purchases. A social commerce website plays on these 6 traits to induce a shopper to make a purchase. They are as follows.
1. Social Proof (Follow The Crowd)
When a customer is about to make a purchase, they might be in a bit of a jam in deciding what to buy. At this point of indecision they’ll naturally jump into social-proof mode and will end up wanting to buy what they see others buying.
The Classic Experiment: The 42nd Street Experiment (1969). A single passerby was asked to stop in 42nd Street NYC and gaze skyward for 60 seconds. Other passersbys walked past, ignoring him. But when15 passersby were asked to do the same thing, 40% of people on the busy street also stopped to look up, almost bringing 42nd Street to a complete a halt within a minute.
To influence decisions: wish lists, popularity lists, social sharing, reviews, and social recommendations become paramount.
2. Authority (Follow the Authority)
If a doctor says eating something will kill you, your not gonna eat it. As humans we usually depend on an authority figure to guide us in making decisions. With specialist knowledge, experience and expertise, they save us time and energy thinking things through. Marketers play on this with commercials saying things like “9 out of 10 doctors approve” etc
The Classic Experiment: The Shockbox Experiments (1961). A majority (61-66%) of people recruited to participate in memory tests gave each other increasingly severe electric shocks up to and including a “fatal” 450V dose as part of the test, if asked to do so by an authority figure – a distinguished looking experimental scientist (participants receiving the shock were stooges, there was no real shock).
To Influence decisions: referral Programs, user forums, affiliate programs etc
3. Scarcity (Scarce stuff is Good Stuff)
A function of supply and demand, greater value is assigned to the resources that are, or perceived to be, less available (diamonds, oil, classic luxury cars, new pair of Air Yeezy’s). Driven by the fear of loss our minds are hardwired to value scarce resources; we instinctively assign more value to opportunities as they become less available – part out of fear of potential loss (this is known as psychological reactance).
The Classic Experiment: The Cookie Jar Experiments (1975). Participants were asked to rate chocolate chip cookies. Experimenters put 10 cookies in one jar and two of the same cookies in another jar. The cookies from the two-cookie jar received far higher ratings, even though the cookies were exactly the same. (Also of note; ‘Romeo and Juliet Effect’ research that shows teen lovers who are restricted/prevented from seeing each other value their relationship more; and the Plexiglass Experiments that proves toddlers prefer toys that are made unavailable to them (by a plexiglass barrier)).
To Influence Decisions: Deal feeds, group-buy, timers, limited-offers etc
4. Liking (Follow those you like)
Ever bought a shirt because you saw your favourite artist wearing it? white glove anyone?. We have a natural inclination to emulate and agree with people we like, admire or find attractive, partly because it builds social bonds and trust (saying yes is a form of social grooming – the human equivalent to animals picking fleas from each other). There’s an old saying in business, people do business with people they like. And, nothing is truer than that statement in social media.
The Classic Experiment: Nixon/Kennedy Debate (1960). Radio listeners and television viewers were asked to rate the performance of two presidential candidates in a live broadcast debate. Radio listeners rated Nixon’s performance higher, but television viewers did the opposite – overwhelmingly handing the debate to Kennedy. The difference? Kennedy came across visually more likeable, more attractive and fresh-faced. Nixon, on the other hand was looking haggard (just coming from a hospital visit), unshaven and sweaty. (Also of note; research showing physical attractiveness (closely linked to liking) influences things as wide ranging as our salary and our likelihood to be found guilty in court (less attractive people twice as likely to be found guilty)).
To Influence Decisions: Reviews, Referral programs, ask-your-network, user forums, news feeds
5. Consistency (Be Consistent)
When faced with uncertainty, consumers tend not to take risks. Rather, they prefer to stay consistent with beliefs or past behavior. When these do not line up in the decision making cycle, consumers tend to feel cognitive dissonance or true psychological discomfort.
The Classic Experiment: The Big Billboard (1966). Experimenters, posing as members of the “Community Committee for Traffic Safety”, knocked on the doors of residents in an affluent residential area in Palo Alto, California, asking if they could put up a huge “Drive Carefully” billboard on their front lawn, completely obscuring their view. Not surprisingly, the vast majority (83%) refused outright, except for one group of residents, 76% of whom agreed. What this group had in common was that two weeks prior, they had been contacted and asked if they’d put a small “Be a Safe Driver” car sticker on their cars – virtually all had agreed. Once the residents had made a public commitment to a small request, they felt the need to be consistent with the large request, and accepted the big billboard.
To Influence Decisions: social gaming/gamification
6. Reciprocity (Repay Favors)
Perhaps the greatest asset in social capital is that of benevolence. It’s easy to get caught up in a cycle of paying it backward, where we expect to be paid or rewarded for our goods, services, or actions. As human beings, we have an innate desire to repay favors to maintain a balance of social fairness whether or not those favors were invited.Now you know why you feel bad when you receive a fancy gift from someone on Christmas when you didn’t buy them anything.
The Classic Experiment: The Coke & The Raffle Ticket (1971). Experimenters posing as art students joined group museum art tours and found they could sell significantly more student raffle tickets at the end of the tour to other members of the tour, if during the tour they did (unsolicited) favours to tour members – such as buying them a Coke. Tour members felt the need to reciprocate the favour, even though they had not asked for the Coke in the first place.
To Influence Decisions: Deal feeds, group-buy, referral programs