The rise of social media is shaking up the traditional ecommerce model, with consumers helping to dictate price and availability of products via new ‘social commerce platforms’. Fadi Shuman, co-founder of Pod1, looks at a new kind of social buying in e-commerce.
A new trend is taking off in e-tail and I’ve decided to call it ‘social commerce’. This new online business model is essentially based around people’s enthusiasm for online voting and with its strong social element, it is going to be vital for up-and-coming brands and manufacturers.
One of my favourite examples is a West London based company called Made.com. The site allows new and established designers of high-end furniture to display their designs to an online audience, who then decide by vote which items they would like to see in the website’s ‘available to buy’ collection, with the most popular then becoming available to order. The amount of people voting also affects the cost of the item, which through enough votes can push down the retail press considerably.
This model gives the designers/manufacturers stability; they can produce these items secure in the knowledge that they already have a sale. They make a profit, the site makes a profit, the consumer has a good experience and an original designer piece of furniture at a reduced cost – everyone’s happy.
Another example nakedwines.com is a site, which invites consumers to ‘sponsor’ 22 winemakers to make wine exclusively for the site members, which they can then purchase at a reasonable price and then vote for their favourites. It introduces new growers and vineyards to the wine community, the consumer is offered the chance to buy the “wine” while it’s still on the vine at a lower cost, or pay more in each stage of it’s development through to its shipping date.
These websites are also, by and large, targeting up and coming, independent manufacturers and brands. It’s a great way of accessing new and exciting products before they become established and inaccessible to those of “average” income.
In the same way that retailers can now by-pass the expense of opening a store by launching an ecommerce site, this model is another example of how online is providing opportunities for entrepreneurs and new businesses that they have never had before. Even without marketing or advertising, brands involved with these websites can have direct access to their target audience.
It is something that can only happen because of the internet and the time we now live in: most people have broadband, we trust online more, we have a more socially motivated world where people want to be empowered by having a say in what they consume and to voice an opinion on how they feel about a product or brand. People aren’t as eager to be told what to like and would rather “discover” their own brands. This new format appeals to our characteristic vote for the underdog. People like the idea of giving their money to a small independent retailer as opposed to giant corporations that will give them the same quality but charge them three times as much.
This is a really positive direction for e-commerce and it’s really taking off - potentially anything that can be manufactured (even cars) could end up having a platform like this. But more than being innovative, it is quite simply a “nice” way of doing business.
By Fadi Shuman
co-founder
Pod1
http://SocialBusinessToday.net - The Best in Social Business
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