Social media are built on our human need to share information. That includes personal information such as what we’re doing, where we are, who we’re with and (increasingly) what we buy. Now, companies and consumers are grabbing hold of social commerce, but are both parties fully taking advantage of it?

Social bargain-hunting service Groupon is currently operating in 52 cities. Its website boasts users have saved almost $300 million through Groupon’s featured deals. The average deal price on the site has steadily increased from about $25 in November 2009 to $45 in April. More markets are opening their doors to social commerce, and droves of consumers are flocking to the idea.

How social commerce works

On Groupon, if a predetermined number of people purchase the discounted coupon each of them get the product or service at a discounted rate. In the very rare instance that the deal fails to reach the predetermined number of purchases, everyone’s transaction is cancelled and no one gets the deal.



With a similar service, Living Social, users get discounts if they convince their friends to buy the featured products and services. These services are giving companies and consumers the power to leverage online sharing, creating win-win situations in the process.

BUT that’s not all…

What if companies decide to hand over other promotional activities to the social realm? All signs point to the social commerce trend’s continued success, so why not take social sharing past one-time discount coupons?

Purchase-sharing site Blippy lets users broadcast what they buy to their social networks and spark conversations around those purchases. Some people see Blippy as a huge invasion of privacy, but that may be because outside of the conversations, Blippy doesn’t offer any incentive for users to share. That’s where merchants have an opportunity to step in. They need to give their customers incentive to share their location and/or purchases. That incentive can come in many different forms other than pre-purchase discounts as with LivingSocial and Groupon.

Consider the following possibilities:

• An electronics store gives customers more points on its loyalty program for Tweeting purchases automatically.
• A ticket vendor offers free parking for an event to a user who posts his football ticket purchase to Facebook.
• An apparel company with an exclusive product testing club for its most frequent customers gives those customers more freebies to try if they blog or post pictures of the clothing on social networks.

The average Facebook user has 130 friends. So each piece of content shared on the site has potential for a 130x multiplier effect. TypePad just released a study that proved Facebook Like widgets increase blog traffic by 50%. Imagine if the same increase was applied to products or services. And that’s only Facebook. Add that influence to email contacts, Twitter followers, LinkedIn connections, Foursquare friends and other social groups. We’re talking about huge opportunities for vendors to let their marketing run rampant through their customers’ networks.

Want to talk more about social commerce and some of the goodies we’re working on at a&g? Drop us a tweet (@schneidermike or @EricLeist), leave us a comment, or contact us here.