Abstract
The transformation of the economy to a digital one has partially been influenced by technological innovations and advancements. Through the digital economy people can buy goods and services online as opposed to the traditional brick and mortar stores. Social commerce has been the latest evolution from e-commerce. This paper introduces the concepts of digital economy and social commerce. Further the paper discusses how and why social commerce came to practice. Finally, the paper highlights the impacts of social media, particularly Facebook on business.
Introduction
The world, as we perceive and know it is constantly changing and one of the fundamental drivers is digital transformation. Notably, digital transformation is not merely about the internet but rather the use of latest technology to do what is already done more efficiently. Digital transformation has affected various aspects of the globe including the economy, consequently resulting in the digital economy. At its core, the digital economy refers to all economic activities conducted through billions of online connections among people, processes, data, organizations, and data. The digital economy has its backbone on the pervasive use of IT across all sectors and aspects of the economy. Also, the digital economy has been facilitated by the evolution of e-commerce into social commerce. Social commerce is an approach that combine creativity, collaboration and the social aspect in the buying and selling of goods online (Huang & Beyouncef, 2013). Notably, social marketing is not merely dependent on the use of technology but also other disciplines such as psychology, and sociology among others. Through social commerce, the digital economy is taking shape and impacting how businesses are structured, interact, and how products and services are delivered.
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Social Commerce into Practice Why and how did Social Commerce come into practice
Needless to say, social commerce came into practice following the evolution of e-commerce. Prior to evolution, purchase of goods on online platforms was merely dependent on e-commerce. The increased popularity of social media platforms such as Facebook, Instagram, LinkedIn and Twitter, among others has, opened new opportunities for business models in e-commerce, which led to social commerce (Kim & Srivastava, 2007). Unlike e-commerce that was merely electronic, social commerce uses the above social media platforms to enable consumers and businesses interact online and acquire goods and services. These social media platforms, on the other hand, use the Web 2.0 software to enable both support and interactions between the business and the consumer.
Taking into consideration that social commerce combines both e-commerce Web 2.0, the interconnectedness of the two is critical for the comprehension of how social commerce came into practice. To begin with, e-commerce has numerous designs and features that propelled its combination with Web 2.0. These features include the quality of information, usability, quality of website and service, and playfulness. The quality of information is an important feature because it gives value to customers in terms of relevance, accuracy, and usefulness. Quality information has the potential to influence the attitude of the customer into purchasing a good or service on the platform. Huang & Beyouncef, (2013) reveal that usability involves how easy it is for a consumer to understand the structure of a system including its simplicity or complexity in navigation. These platforms are also usable in terms of friendliness to the customer which consequently results in effectiveness, efficiency, and satisfaction by end users. The quality of the e-commerce websites also shaped how social commerce came into practice in that their performance play a key role in determining purchase decision by customers. Also, the quality of services gives e-commerce platforms a form of tangibility which is critical for consumers to rate the quality of service support as well as review and feedback on their products and services. Lastly, e-commerce platforms are enjoyable to use while shopping for goods online.
On the other hand, Web 2.0 is designed such that it can create global human network where information is provided by fellow human beings and not servers. This design feature has made it possible for social networks such as Facebook to make people its main social exponents. Since social commerce involves interaction and contributions of people on social networks, the combination with e-commerce made it come into being. Another aspect of Web 2.0 is the exploitation of collective intelligence. Through such type of intelligence, the experiences and knowledge of people is pooled into different social platforms and Facebook. The intelligence then becomes the truth on social networks through influence. In other words, Web 2.0 has facilitated information spread through social influence (Liang & Turban, 2011). The combination of design features of e-commerce and social media, driven by web 2.0 resulted to evolution and social commerce. Platforms such as Facebook have since then impacted businesses in numerous ways.
Impacts of Facebook on Business
Facebook has made it easy to locate and buy products and services online. Prior to evolution, browsing of a product was tedious and time-consuming. Research reveals that over 80% of online shoppers have at one point left e-commerce without getting the item they want (Kim & Srivastava, 2007). Facebook has helped drive an increased volume of traffic retail sites such that people can now easily locate the items they are shopping for. In addition, Facebook has also enabled the incorporation of social influence into online marketing which has tremendous benefits to businesses. First, organizations are now able to get customers’ detailed feedback and responses, enables the prediction of trends in the market (Kim & Srivastava, 2007). Also, through Facebook, businesses can identify key influencers and use them to maximize on marketing.
In conclusion, through the digital economy, social commerce is taking shape and impacting how businesses are structured, interact, and how products and services are delivered. Social commerce came into practice following the popularity of social media platforms such as Facebook, Twitter, and Instagram among others. The evolution of e-commerce into social commerce has been facilitated by combination of features of e-commerce and those of Web 2.0. The impacts on business are tremendous including influence on decision-making, driving more traffic, and making it easy to identify highly influential people.
References
Huang, Z., & Benyoucef, M. (2013). From e-commerce to social commerce: A close look at design features. Electronic Commerce Research and Applications , 12 (4), 246-259.
Kim, Y. A., & Srivastava, J. (2007, August). Impact of social influence in e-commerce decision making. In Proceedings of the ninth international conference on Electronic commerce (pp. 293-302).
Liang, T. P., & Turban, E. (2011). Introduction to the special issue social commerce: a research framework for social commerce. International Journal of electronic commerce , 16 (2), 5-14.
