Chapter 1 Introduction to Social Commerce

Learning Objectives 1.Define social computing and the Social Web. 2.Describe the Social Web revolution. 3.Describe the essentials of Web 2.0 and social media. 4.Define social commerce and describe its roots and evolution. 5.Describe the content of the social commerce field.

Learning Objectives 6.Define social media marketing. 7.Describe Enterprise Summarize the benefits and limitations of social commerce. 9.Understand the process of conducting social commerce. 10.Find research opportunities on social commerce and learn about related resources.

Opening Case: Starbucks Goes Social The Problem – Starting in 2007, the company’s operating income declined sharply – This decline was caused by not only the economic slowdown, but also by the increased competition

Opening Case: Starbucks Goes Social The Solution: Going Social – Exploiting Collective Intelligence: My Starbucks Idea – Starbucks’ Activities on Facebook, LinkedIn, Google+, Twitter, YouTube, Flickr, Pinterest, and Instagram – Early Adoption of Foursquare—a Failure – Social Media Marketing – Starbucks Digital Network

Opening Case: Starbucks Goes Social The Results – Starbucks turned sales around by effectively integrating the digital and the physical worlds – In 2010, its operating income almost tripled and so did its stock price – Earnings doubled from 2010 to 2013 – Sales are lifting due to digital and social media promotions

Lessons Learned from this Case How a large company uses both an enterprise and a public social network – The company uses social media platforms and Web 2.0 tools – A central activity is to involve customers in improving the company’s operations by soliciting and discussing ideas – The major objective is to increase the flow of visitors to the physical stores as well as to the online sites – Using special promotions and rewards, Starbucks has attracted a record number of visitors, considerably improving its revenue and profits

Social Computing and the Social Web Social Computing* The Social Web – Welcome to the Social Web Revolution – F-Commerce

Social Computing and the Social Web Some Interesting Statistics about the Social Web and Social Media – It is predicted that Internet use will quadruple in size from 2011 to 2015 with much of the expected growth attributed to social networking activities – Since March 2010, there have been more Internet visits to Facebook than to Google – As of December 2014, Facebook hosts pages for over 30 million businesses, and has more than 1.5 million advertisers – Video: “Social Media & Video Statistics for 2014” at youtube.com/watch?v=QfVVfB_UHeA youtube.com/watch?v=QfVVfB_UHeA

Fundamentals of Web 2.0 and Social Media What Is Web 2.0? – Web 2.0* What Is Social Media? – Social media*

Social Commerce: Definitions and Evolution Definitions and Characteristics – Social commerce (SC)* – Social Commerce and Social Business Social commerce is the same as social business The business that addresses a social problem IBM’s definition Our working definition – The Evolution of Social Commerce

Figure 1.1 The Foundation of Social Commerce

Figure 1.2 The Major Roots of Social Commerce

The Content of the Social Commerce Field The Landscape and Major Components of the Field Social Media Marketing* – Examples of Social Commerce Applications in Marketing Dell made $6.5 million by selling computers on Twitter since 2007 Disney allowed people to purchase tickets on Facebook Mountain Dew attracts video game lovers and sports enthusiasts via “Dewmocracy” contests

Figure 1.3 The Major Dimensions of Social Commerce

The Content of the Social Commerce Field Enterprise 2.0* – Examples of Social Enterprise Applications Dell, Starbucks, IBM, and many other companies solicit ideas from large groups of employees, customers, and business partners on how to improve their business operations More than 50% of medium and large corporations use LinkedIn and Facebook to announce available positions and to find potential employees Best Buy provides state-of-the-art customer service via Twitter

Figure 1.4 The Foundation of Enterprise 2.0

The Benefits and Limitations of Social Commerce Benefits to Customers – It is easy to get recommendations from friends and other customers – Customers are exposed to special for large savings – Purchases can be matched with specific needs, wants, tastes, and wishes of customers; this increases satisfaction and reduces product selection decision time – It is easy for customers to use the social commerce technology

The Benefits and Limitations of Social Commerce Benefits to Retailers – Consumers can provide feedback on market communication strategy and on product (service) design – Vendors get free word-of-mouth marketing – Increased website traffic, which increases revenue and sales – Increased sales when social influence methods are used

The Benefits and Limitations of Social Commerce Benefits to Other Types of Enterprises – Conduct faster and less costly recruitment with larger reach to a large number of candidates – Reduce costs via innovative methods such as using the collective intelligence of employees and business partners – Foster better external relationships; for example, with partners and channel distribution members – Increase collaboration and improve communication within the enterprise and with business partners

The Benefits and Limitations of Social Commerce The Social Business: An IBM Approach – Social business* 1.Enable an effective workforce 2.Accelerate innovation 3.Deepen customer relationships – Examples of Social Business Implementation Video: “IBM Customer Testimonial: Wakefern Foods Uses Social Business Tools to Activate Their Workforce” at youtube.com/watch?v=bt3_hGaUjX8youtube.com/watch?v=bt3_hGaUjX8

The Benefits and Limitations of Social Commerce New or Improved Business Models – Business model* Concerns and Limitations of Conducting Social Commerce 1.Security and liability exposures 2.Doubts about ability to govern effectively 3.Poor systems integration 4.Doubts about ROI/value 5.Poor organizational technology adoption

The Process of Conducting Social Commerce and Suggested Research Topics The Process of Conducting Social Commerce Illustrative Research Issues

Figure 1.5 The Process of Conducting Social Commerce

Figure 1.6 The Content and Organization of the Book