Social commerce uses social media to enable online shopping interactions. It encompasses online reviews, shopping apps, deal sites, and social shopping pages. Social commerce provides tools for each stage of the purchase funnel, including problem recognition, information search, alternative evaluation, purchase, and post-purchase. These tools include social ads, friend recommendations, reviews, and price comparisons. Encouraging social sharing, recommendations, and user-generated content can benefit brands by increasing sales and customer loyalty. However, social media advertising must be truthful, non-deceptive, and substantiated to comply with regulations like COPPA, which protects children's privacy online.

1. Chapter 8: Social
Commerce
MKT-495

2. Social Commerce Definition
 Social commerce is the fourth zone of social media and is a subset of e-
commerce (the practice of buying and selling products and services via the
Internet). It uses social media applications to enable online shoppers to
interact and collaborate during the shopping experience and to assist retailers
and customers during the process.

3. Social Commerce Purpose
 Social commerce encompasses online ratings and reviews, numerous shopping
related apps, deal sites and deal aggregators, and social shopping malls and
storefronts.
 Included in the following:
 CRM/Service
 Retailing/Sales
 Human Resources

4. Social Commerce Tools for Problem
Recognition
 Social ads on social networking sites
 Shared endorsements from friends posted in activity streams
 Curated images and lists on sites
 Location-based promotions

5. Social Commerce Tools for Information
Search
 Comments throughout social channels on a brand’s Wall.
 Queries and responses within social networks.
 Ratings and reviews posted on sites.
 Product and pricing information available.
 Deal directories.
 Wish lists, gift registries.

6. Social Commerce Tools for Evaluation of
Alternatives
 Bar code scanning/price comparisons.
 Recommendations, testimonials, recommendation agents, and popularity
filters.
 Referrals.

7. Social Commerce Tools for Purchase
 Shopping within network options.
 Social stores and social shopping malls

8. Social Commerce Tools for Post-Purchase
 Share opinion posts in activity streams.
 Ratings and reviews on review sites and retailer website.
 Reviews and product experiences posted on blogs.

9. Ways of Encouraging Social Commerce
 Share tools: social software plug-ins that enable easy sharing of products sold
on a retailer’s website to social networks.
 Recommendation indicators: simple buttons that provide an onsite
endorsements of a product.
 Reviews and ratings: onsite reviews and ratings with tools for writing and
rating.
 Testimonials: a form of recommendation that enables users to share a more
personal story about their experience.

10. Ways of Encouraging Social Commerce
 User galleries: virtual galleries where users can share their creations,
shopping lists, and wish lists.
 Pick lists: lists that help shoppers share what they want onsite.
 Popularity filters: filters that enable the shopper to show products by most
popular, most viewed, most favorites, or most commented.
 User forums: groups of people who meet online to communicate about
products and help each other solve related problems.

11. Benefits of Social Commerce
 It enables the marketer to monetize the social media investment by boosting
site and store traffic, converting browsers to buyers, and increasing average
order value.
 It solves the dilemma of social media return on investment (ROI).
 Social commerce applications result in more data about customer behavior as
it relates to the brand.
 Social shopping applications enhance the customer experience, which creates
higher levels of customer loyalty and better long-term customer value.
 Social shopping makes sharing brand impressions easy.
 Brand can keep up with the competition and differentiate in the e-commerce
space.

12. Chapter 7: The Law of
Social Advertising

13. Best Practices for Social Media
Advertising
 Be truthful in your social media advertising:
 Businesses should be mindful not only of the honesty of their own practices,
but of the practices of those whom they rely on to spread their advertising
message on their behalf. Including outside ad agencies, PR and marketing
firms, affiliate marketers, and so on.

14. Best Practices for Social Media
Advertising
 Make sure you social media advertising claims aren’t unfair or deceptive:
 Examples of misleading or deceptive practices include false oral or written
representations, misleading price claims, sales of hazardous or systematically
defective products or services without adequate disclosures, failure to
disclose information regarding pyramid sales, and use of bait and switch
techniques.
 Factors to assess whether an advertisement is unfair include, whether the
practice injures consumers, whether it violates established public policy, and
whether it’s unethical or unscrupulous.

15. Best Practices for Social Media
Advertising
 Substantiate your social media advertising claims:
 This is important because companies face liability not only for the
unsubstantiated claims they make, but also for claims made on their behalf,
including by sponsored endorsers.

16. The Children’s Online Privacy Protection
Act (COPPA)
 Overview:
 Imposes certain requirements on operators of websites or online services
directed to children under 13 years of age, and on operators of other websites
or online services that have actual knowledge that they are collecting
personal information online from a child under 13. It became effective on
April 21, 2000.

17. The Children’s Online Privacy Protection
Act (COPPA)
 Requirements:
 Post a privacy policy on the home page of its website or online service and a
link to the privacy policy everywhere personal information children is
collected.
 Provide notice to parents about the site’s information collection practices
and, with some exceptions, obtain verifiable parental consent before
collecting, using or disclosing personal information from children.
 Give parents the choice to consent to the collection and use of a child’s
personal information for internal use by the website or online service, and
give them the chance to choose not the have that personal information
disclosed to third parties.

18. The Children’s Online Privacy Protection
Act (COPPA)
 Requirements continued:
 Provide parents with reasonable access to their child’s information and the
opportunity to delete the information and opt out to the future collection or
use of the information.
 Not condition a child’s participation in a game, the offering of a prize, or
another activity on the disclosure of more personal information than is
reasonably necessary to participate in the activity.
 Establish and maintain reasonable procedures to protect the confidentiality
security and integrity of the personal information collected from children.