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.

1. Ethics
and
Social
CommerceSocial 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.
by Saswati Saha Mitra
Illustration Credit: Anindya Kundu

2. The rise of commerce has always been tightly aligned with certain
mutually beneficial, economic principles for the buyer as well as the
seller: whether it is the barter system where two parties exchanged
goods and services with equal perceptible value or whether it is the
money economy, where paper was assigned legal tender status. In
each epoch, commerce has flourished only when there has been the
approval of two or more parties based on a code of ethics that has
governed the transaction. Today, commerce is moving in the direction
of social commerce, an exciting phenomenon to watch out for.
Social commerce is the latest buzz in consumer industries. Strategy
Consultants, Booz & Co., estimates the global market value of social
commerce to be about $9 billion in 2013, growing to $30 billion by
2015. Such figures are high enough to lure anyone who has something
to sell, want to jump into the bandwagon. The mature ecosystem of
social networks provided by Facebook, Pinterest, and Twitter along
with the equally potent e-commerce platforms of Amazon, EBay, and
PayPal, make it possible to unleash the potential of social commerce
to an unprecedented degree.
Social commerce after all makes total sense. Everyone appreciates
the inputs of friends and family in major purchase decisions. From
buying a shirt to booking an apartment, people in one’s network have
a key role to play in the decision making process. This so-far-known-
but-invisible hand of influence is what social commerce seeks to
make visible, tap in on an ongoing basis and of course, monetize.
Communities

3. Kuliza
diversity is not Pinterest’s forte or even in its interest. When $80 is the
average amount for purchases initiated by the site, Pinterest is clearly
not for all. It has its own brand image to live up to. Brands participating
in Pinterest know this. Companies are rapidly developing innovative
engagement strategies, integrating the Pin It button across all web
spaces they can exist on, from networking sites to search engines.
Brands offer new visual stimuli everyday and provide a 2% reward of
the selling price to the purchase enabler in a service similar to Fancy.
This is a very high degree of personalized and networked pressure
working on you to make you buy.
An essential part of any commercial relation is honesty. Both parties
have to be honest to the product as well as the transaction for it to be
a success. In most e-commerce networks seller reputation and peer
review are instrumental in helping new buyers reach their decisions;
be it the small, local players such as Zalando, MouthShut or giants
such as Amazon and EBay.
Detailed reviews are much
appreciated. Skepticism and
suspicion are bound to surface
towards extreme reactions.
Some social commerce
discussion forums regularly
reveal the unreliability of such
ratings and reviews. Sellers
on Amazon are known to offer
buyers discounts to remove
negative comments, thereby
keeping their overall ratings high.
This may be improved customer
relationship management but
it can also be interpreted as
buying the buyer’s silence. To
bring in transparency social
commerce platforms today have
a lot to achieve. It is essential
consumers are provided platforms to express their thoughts without
brands attempting backend tweaking or influencing. Also, there is a
need for curation of quality reviews, prohibition of fake profiles from
sellers or their competitors from skewing the nature of feedback.
The social network culture of grabbing user data is one of the biggest
challenges to the growth of social commerce. The motive is to offer
better customer experiences but at the cost of sharing personal data.
Every Facebook app that one uses, asks for unanimous access to
personal information. The Apple App store requires one to release
one’s credit card data. New e-commerce sites request log-ins via
Facebook or Twitter giving them access to one’s networks, contacts
and other relevant social data.
The cautious say there is no apparent need for all this data but people
The rise of commerce has always been tightly aligned with certain
mutually beneficial, economic principles for the buyer as well as the
seller: whether it is the barter system in which two parties exchanged
goods and services with equal perceptible value or whether it is the
money economy, that assigns legal tender status to paper. In each
epoch, commerce has flourished only when there has been the
approval of two or more parties based on a code of ethics that has
governed the transaction. Today, commerce is moving in the direction
of social commerce, an exciting phenomenon to watch out for.
Social commerce is the latest buzz in consumer industries. Strategy
Consultants, Booz & Co., estimates the global market value of
social commerce to be about $9 billion in 2013, growing to $30
billion by 2015. Such figures are high enough to lure anyone who
has something to sell, want to jump into the bandwagon. The mature
ecosystem of social networks provided by Facebook, Pinterest, and
Twitter along with the equally
potent e-commerce platforms
of Amazon, EBay, and PayPal,
make it possible to unleash the
potential of social commerce to
an unprecedented degree.
Social commerce after all
makes total sense. Everyone
appreciates the inputs of friends
and family in major purchase
decisions. From buying a shirt to
booking an apartment, people
in one’s network have a key role
to play in the decision making
process. This so-far-known-
but-invisible hand of influence
is what social commerce seeks
to make visible, tap in on an
ongoing basis and of course,
monetize.
Social commerce is new. It only seems right to help consumers
understand the rules of the game before they become a core part
of it. Based on what is on offer, one has to negotiate to arrive at the
right juncture which will enable this new format to succeed. So how is
business being done socially?
Consumers navigate through a burgeoning amount of influencing
data. Peer influence, creating groups for mutual ‘benefit’ and unlimited
recommendations and advices form the nucleus of social commerce.
People leave on unlimited number of platforms an indelible track of
invaluable personal and financial data.
Each of these platforms has a unique appeal. Visual analysis of
Pinterest shows how the perfect world is soft, cute, homely and
tailored. Members have the ability to create their own boards but real
People leave on
unlimited number
of platforms an
indelible track of
invaluable personal
and financial data.

4. 41
Social Technology Quarterly 06Social Technology Quarterly 06

5. Kuliza
Left: GeorgeWashington on the $1 bill
Credit: Peasap

6. Social Technology Quarterly 06
have been convinced that who they are socially, is who they are really
and knowing that will help serve them better.
Assuming that social networkers and shoppers are generous enough
to gift all their data to the cause of consumer analysis, the risk of the
data falling into wrong hands is a primary concern.
A recent article by Mat Honan on Wired reveals how critically
connected all our internet presence is and how easy it is for those with
wrong intentions to take over someone’s complete online and offline
identity. A hijacked Facebook account is one thing but a hijacked bank
account is life threatening. In the future, the two will be interconnected.
So is social commerce unethical? Visible examples from current
high traffic platforms are enough to raise warning signals among the
discerning. The segment is nascent; therefore it is easier to innovate
on its processes to emerge as transparent, consumer friendly and
ethical in its commitment to consumers in the longer term. Some key
issues that need to be redressed include managing the consumption
cycle, establishing transparency in peer recommendation, and
allowing consumers to take charge of their data.
In 2012, Target came under serious criticism for its acute consumer
analytics which could predict pregnancy even before the information
was made public by the person concerned. This should tell consumers
that industry analytics today are sophisticated enough to predict a
lot about users. Instead of using the data to single-mindedly drive
purchase behaviour, brands that will use consumer data responsibly
to moderate the consumption cycle and only push for purchase at
necessary intervals, will gain significant consumer-trust. Instead of
the Pinterest model of “everything is so beautiful”, a balanced model
of need and purchasing power, adjusted recommendations will help
bring out the more democratic and humane side of social commerce.
Peer recommendation in the age of Facebook has been quite
voluminous. One likes Zara, so one recommends friends to like Zara.
One wants to network on Glassdoor, so invites others too. Such
expansive peer recommendation must change if social commerce is
to be meaningful and succeed in the long run. Using smart analytics
and filters, social networks will now need to enable their users to
recommend in a more intelligent fashion. After all, we do know
what our friends really like. So, instead of disturbing every single
one of them with everything and nothing, it is the users themselves,
if adequately enabled, who can help brands become even more
focused in reaching their target consumer base.
Users are quite surprised by the long-tail effect of their data on the
internet. Not many are aware that Facebook has the permission to
share data even after profiles have been deleted. One of the crucial
factors that most social companies need to be held responsible for is
their terms and conditions. The miniscule sized writing and unending
pages of conditions are reasons enough for even the most careful
of users to decide to skip and agree to anything in their rush to
experience the service. Such conditions are critical when there is a
commercial angle associated with it. Brands that will cut through the
chaff and seek permissions to use and share specific data from their
consumers, in simple and comprehensible terms, will not only enable
the consumer to be in better charge of their data but will themselves
emerge as highly transparent business practices. This is an enviable
positioning 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 welcome
in social commerce but unethical behaviour does not belong here.
Ethics are a crucial factor in shaping brand loyalty. The terms and
conditions set with consumers today will shape the future of social
commerce. Martin Lindstorm in Buyology, analyzed mirror neurons
and cautioned consumers that the next generation of marketing
strategies will vie not for consumers’ sight but directly for their brain
and via their most trusted peers. At a time when both the radical and
the emotional side of consumers are targeted, consumers have the
right to demand utmost ethical behaviour from their favourite brands.
References
Duhigg, Charles.“How Companies LearnYour Secrets.”The NewYork
Times Magazine 16 02 2012.
Honan, Mat.“How Apple and Amazon Security Flaws Led to My Epic
Hacking.”.Wired,06 08 2012.
Lindstorm,Martin.Buyology:Truth and Lies AboutWhyWe Buy.Crown
Business,2008.
“Turning “Like” to “Buy” ”: Social Media Emerges as a Commerce
Channel.”.Booz & Co.,17 04 2011.
“Social commerce statistics.”.BazaarVoice,n.d.Web.