EthicsandSocialCommerceSocial actions are a core part of shoppingonline and the resulting social datais eagerly collected ...
The rise of commerce has always been tightly aligned with certainmutually beneficial, economic principles for the buyer as...
Kulizadiversity is not Pinterest’s forte or even in its interest. When $80 is theaverage amount for purchases initiated by...
41Social Technology Quarterly 06Social Technology Quarterly 06
KulizaLeft: GeorgeWashington on the $1 billCredit: Peasap
Social Technology Quarterly 06have been convinced that who they are socially, is who they are reallyand knowing that will ...
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Ethics and social commerce

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This is an article by Saswati Saha Mitra, a Consumer Behaviourist. This article was published in issue 06 of the Social Technology Quarterly.
Summary: Social actions are a core part of shopping online and the resulting social data is eagerly collected and leveraged by companies. Social commerce, thus, needs to be cognizant of the ethical issues in order to continue to attract customers in the future.

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Ethics and social commerce

  1. 1. EthicsandSocialCommerceSocial actions are a core part of shoppingonline and the resulting social datais eagerly collected and leveraged bycompanies. Social commerce, thus,needs to be cognizant of the ethicalissues in order to continue to attractcustomers in the future.by Saswati Saha MitraIllustration Credit: Anindya Kundu
  2. 2. The rise of commerce has always been tightly aligned with certainmutually beneficial, economic principles for the buyer as well as theseller: whether it is the barter system where two parties exchangedgoods and services with equal perceptible value or whether it is themoney economy, where paper was assigned legal tender status. Ineach epoch, commerce has flourished only when there has been theapproval of two or more parties based on a code of ethics that hasgoverned the transaction. Today, commerce is moving in the directionof social commerce, an exciting phenomenon to watch out for.Social commerce is the latest buzz in consumer industries. StrategyConsultants, Booz & Co., estimates the global market value of socialcommerce to be about $9 billion in 2013, growing to $30 billion by2015. Such figures are high enough to lure anyone who has somethingto sell, want to jump into the bandwagon. The mature ecosystem ofsocial networks provided by Facebook, Pinterest, and Twitter alongwith the equally potent e-commerce platforms of Amazon, EBay, andPayPal, make it possible to unleash the potential of social commerceto an unprecedented degree.Social commerce after all makes total sense. Everyone appreciatesthe inputs of friends and family in major purchase decisions. Frombuying a shirt to booking an apartment, people in one’s network havea key role to play in the decision making process. This so-far-known-but-invisible hand of influence is what social commerce seeks tomake visible, tap in on an ongoing basis and of course, monetize.Communities
  3. 3. Kulizadiversity is not Pinterest’s forte or even in its interest. When $80 is theaverage amount for purchases initiated by the site, Pinterest is clearlynot for all. It has its own brand image to live up to. Brands participatingin Pinterest know this. Companies are rapidly developing innovativeengagement strategies, integrating the Pin It button across all webspaces they can exist on, from networking sites to search engines.Brands offer new visual stimuli everyday and provide a 2% reward ofthe selling price to the purchase enabler in a service similar to Fancy.This is a very high degree of personalized and networked pressureworking on you to make you buy.An essential part of any commercial relation is honesty. Both partieshave to be honest to the product as well as the transaction for it to bea success. In most e-commerce networks seller reputation and peerreview are instrumental in helping new buyers reach their decisions;be it the small, local players such as Zalando, MouthShut or giantssuch as Amazon and EBay.Detailed reviews are muchappreciated. Skepticism andsuspicion are bound to surfacetowards extreme reactions.Some social commercediscussion forums regularlyreveal the unreliability of suchratings and reviews. Sellerson Amazon are known to offerbuyers discounts to removenegative comments, therebykeeping their overall ratings high.This may be improved customerrelationship management butit can also be interpreted asbuying the buyer’s silence. Tobring in transparency socialcommerce platforms today havea lot to achieve. It is essentialconsumers are provided platforms to express their thoughts withoutbrands attempting backend tweaking or influencing. Also, there is aneed for curation of quality reviews, prohibition of fake profiles fromsellers or their competitors from skewing the nature of feedback.The social network culture of grabbing user data is one of the biggestchallenges to the growth of social commerce. The motive is to offerbetter customer experiences but at the cost of sharing personal data.Every Facebook app that one uses, asks for unanimous access topersonal information. The Apple App store requires one to releaseone’s credit card data. New e-commerce sites request log-ins viaFacebook or Twitter giving them access to one’s networks, contactsand other relevant social data.The cautious say there is no apparent need for all this data but peopleThe rise of commerce has always been tightly aligned with certainmutually beneficial, economic principles for the buyer as well as theseller: whether it is the barter system in which two parties exchangedgoods and services with equal perceptible value or whether it is themoney economy, that assigns legal tender status to paper. In eachepoch, commerce has flourished only when there has been theapproval of two or more parties based on a code of ethics that hasgoverned the transaction. Today, commerce is moving in the directionof social commerce, an exciting phenomenon to watch out for.Social commerce is the latest buzz in consumer industries. StrategyConsultants, Booz & Co., estimates the global market value ofsocial commerce to be about $9 billion in 2013, growing to $30billion by 2015. Such figures are high enough to lure anyone whohas something to sell, want to jump into the bandwagon. The matureecosystem of social networks provided by Facebook, Pinterest, andTwitter along with the equallypotent e-commerce platformsof Amazon, EBay, and PayPal,make it possible to unleash thepotential of social commerce toan unprecedented degree.Social commerce after allmakes total sense. Everyoneappreciates the inputs of friendsand family in major purchasedecisions. From buying a shirt tobooking an apartment, peoplein one’s network have a key roleto play in the decision makingprocess. This so-far-known-but-invisible hand of influenceis what social commerce seeksto make visible, tap in on anongoing basis and of course,monetize.Social commerce is new. It only seems right to help consumersunderstand the rules of the game before they become a core partof it. Based on what is on offer, one has to negotiate to arrive at theright juncture which will enable this new format to succeed. So how isbusiness being done socially?Consumers navigate through a burgeoning amount of influencingdata. Peer influence, creating groups for mutual ‘benefit’ and unlimitedrecommendations and advices form the nucleus of social commerce.People leave on unlimited number of platforms an indelible track ofinvaluable personal and financial data.Each of these platforms has a unique appeal. Visual analysis ofPinterest shows how the perfect world is soft, cute, homely andtailored. Members have the ability to create their own boards but realPeople leave onunlimited numberof platforms anindelible track ofinvaluable personaland financial data.
  4. 4. 41Social Technology Quarterly 06Social Technology Quarterly 06
  5. 5. KulizaLeft: GeorgeWashington on the $1 billCredit: Peasap
  6. 6. Social Technology Quarterly 06have been convinced that who they are socially, is who they are reallyand knowing that will help serve them better.Assuming that social networkers and shoppers are generous enoughto gift all their data to the cause of consumer analysis, the risk of thedata falling into wrong hands is a primary concern.A recent article by Mat Honan on Wired reveals how criticallyconnected all our internet presence is and how easy it is for those withwrong intentions to take over someone’s complete online and offlineidentity. A hijacked Facebook account is one thing but a hijacked bankaccount is life threatening. In the future, the two will be interconnected.So is social commerce unethical? Visible examples from currenthigh traffic platforms are enough to raise warning signals among thediscerning. The segment is nascent; therefore it is easier to innovateon its processes to emerge as transparent, consumer friendly andethical in its commitment to consumers in the longer term. Some keyissues that need to be redressed include managing the consumptioncycle, establishing transparency in peer recommendation, andallowing consumers to take charge of their data.In 2012, Target came under serious criticism for its acute consumeranalytics which could predict pregnancy even before the informationwas made public by the person concerned. This should tell consumersthat industry analytics today are sophisticated enough to predict alot about users. Instead of using the data to single-mindedly drivepurchase behaviour, brands that will use consumer data responsiblyto moderate the consumption cycle and only push for purchase atnecessary intervals, will gain significant consumer-trust. Instead ofthe Pinterest model of “everything is so beautiful”, a balanced modelof need and purchasing power, adjusted recommendations will helpbring out the more democratic and humane side of social commerce.Peer recommendation in the age of Facebook has been quitevoluminous. One likes Zara, so one recommends friends to like Zara.One wants to network on Glassdoor, so invites others too. Suchexpansive peer recommendation must change if social commerce isto be meaningful and succeed in the long run. Using smart analyticsand filters, social networks will now need to enable their users torecommend in a more intelligent fashion. After all, we do knowwhat our friends really like. So, instead of disturbing every singleone of them with everything and nothing, it is the users themselves,if adequately enabled, who can help brands become even morefocused in reaching their target consumer base.Users are quite surprised by the long-tail effect of their data on theinternet. Not many are aware that Facebook has the permission toshare data even after profiles have been deleted. One of the crucialfactors that most social companies need to be held responsible for istheir terms and conditions. The miniscule sized writing and unendingpages of conditions are reasons enough for even the most carefulof users to decide to skip and agree to anything in their rush toexperience the service. Such conditions are critical when there is acommercial angle associated with it. Brands that will cut through thechaff and seek permissions to use and share specific data from theirconsumers, in simple and comprehensible terms, will not only enablethe consumer to be in better charge of their data but will themselvesemerge as highly transparent business practices. This is an enviablepositioning that most companies ought to strive for.Jimmy Wales, the founder of Wikipedia once said, “Commerce is fine.Advertising is not evil. But it doesn’t belong here. Not in Wikipedia.”On similar lines, social commerce is fine. Advertising is also welcomein social commerce but unethical behaviour does not belong here.Ethics are a crucial factor in shaping brand loyalty. The terms andconditions set with consumers today will shape the future of socialcommerce. Martin Lindstorm in Buyology, analyzed mirror neuronsand cautioned consumers that the next generation of marketingstrategies will vie not for consumers’ sight but directly for their brainand via their most trusted peers. At a time when both the radical andthe emotional side of consumers are targeted, consumers have theright to demand utmost ethical behaviour from their favourite brands.ReferencesDuhigg, Charles.“How Companies LearnYour Secrets.”The NewYorkTimes Magazine 16 02 2012.Honan, Mat.“How Apple and Amazon Security Flaws Led to My EpicHacking.”.Wired,06 08 2012.Lindstorm,Martin.Buyology:Truth and Lies AboutWhyWe Buy.CrownBusiness,2008.“Turning “Like” to “Buy” ”: Social Media Emerges as a CommerceChannel.”.Booz & Co.,17 04 2011.“Social commerce statistics.”.BazaarVoice,n.d.Web.

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