Question

Essay: the effects of Social Media on E-commerce. (2000 words)

Answer 1

The affirmation of social media platforms has drastically changed customers purchasing habits and the way businesses develop their e-commerce sites. Indeed, e-vendors no longer invest money individually on advertisements on their e-commerce platforms; rather there is a fierce online competition among companies promoting their goods and services on social media platforms. On the other hand, customers use social media to generate content and to network with other users so as they can gather and share as much information as possible about prices, product quality, customer service and e-sellers reputation. In addition, it is believed that social media facilitates social interaction among customers, leading to increased trust and intention to buy. In this essay, we will point out how social media influences the e-commerce decision making by initially reasoning on theoretical concepts about online customer's behaviour along with the factors affecting their purchasing choices, and then by illustrating useful statistics which shows how social media marketing has exponentially grown over the last decade.

The development of social networking sites (Facebook, Twitter, Instagram) in recent years, has drastically changed both customers online purchasing habits and the way businesses promote their products and services. The wide range of applications the Internet provide users, has been allowing them to communicate virtually by exchanging opinions and purchasing experiences online, without necessarily interacting face to face. In this sense, all these functionalities, supported by the Internet connection, play a critical role in implementing effectively online interactions by providing the basic infrastructure, without which it would not be possible to perform any sort of online communication.

For these reasons, nowadays social media represents an opportunity for firms to increase popularity of their e commerce sites, increase brand awareness among online customers, increase sales, facilitate word-of-mouth communication and ensure social support to online customers. Moreover, social media has introduced the development of new marketing strategies focused on building trust and affect customers intention to buy within the most reliable social platforms. In fact, it has been proven that customer loyalty in a social network is an influencing factor in posting information which is related to advertisers.

Nowadays, Social Media Marketing is undoubtedly one of the most prominent means to build and maintain long-lasting relationships between companies adopting e-commerce infrastructure and users accustomed to sharing opinions, suggestions and purchase experiences by connecting to social networks. Before illustrating some statistics and data confirming the key role of social media in improving the effectiveness of an e-commerce platform, it is worth pointing out some theoretical concepts which allow us to understand the reasons why growing number of companies have been increasingly investing money and time on Web Marketing tool, along with the opportunities and challenges involved in it.

The most obvious explanation behind the phenomenon of how social media affects business is that social media is a free marketing tool that allows companies to engage customers all over the world. TV ads, radio spots, and print media still play a role in modern advertising, but nothing beats free.

However, cost only represents the tip of the iceberg. Some other benefits of using social media and e-commerce include:

1. Two-way communication

When delivering your message via television or radio, you might have to wait months to see if your campaign works. Social media allows for instantaneous input from users.

2. Segmentation by geography, demography, and interest

Fading are the days of generic advertisements on broadcast television. It is now possible to A/B test highly individualized messages for equally individualized audiences.

3. Multiplier effect

With a click of the mouse, users can resend the original "message" to thousands of friends or followers. One might have to spend millions of dollars to create a memorable radio jingle, but a low-cost social media campaign can go viral overnight. Because the referral is coming from friends and contacts, the message benefits from a level of social proof that few corporate advertisements ever enjoy in the world of traditional print media.

American shoppers spend a tremendous amount of time surfing the web — both on computers and on mobile devices. Obviously, having an online presence is essential if you want to attract this traffic, but given the sheer number of hours that these very users spend on social media, it would be a mistake not to invest in popular platforms like Facebook, Twitter, or Instagram.

Getting started may seem haunting, but keeping in mind that the largest cost is time — not money. Paid campaigns can be created and stopped at any time, but an organic following is likely the most promising audience.

Social media is a free and effective tool that can help you connect with millions of potential customers all over the world. If you need help accepting payments in your e-commerce or brick-and-mortar store, we can help.

Despite not being a direct sales channel, social media can support e commerce in the following ways:

• Promote brand awareness. One of the chief benefits social media provides is its ability to help retailers build brand awareness. A survey conducted by online marketing tools vendor Wishpond found that 89 percent of respondents said social media marketing generated more business exposure.

Due to its viral nature and ability to quickly and easily spread a message, brands that commit to regular posting of relevant content on social sites grow their base of fans and followers, and have ongoing interaction with them should, over time, expect to see an uptick in awareness.

• Help overcome customer reluctance to purchase. While customers still express some degree of confidence in advertising messages, that pales in comparison to their reliance on word of mouth, especially when it comes from trusted sources such as family and friends.

According the most recent Nielsen Trust in Advertising report, 84 percent of those surveyed said word of mouth was the most influential factor when deciding on a purchase. Consumer opinions posted online ranked third at 68 percent.

If “trust” is a potent factor in convincing consumers to purchase a product, through its focus on building relationships and fostering interaction, social media can serve as a channel to help consumers overcome their reluctance.

• Improve customer loyalty. In a day when customers are one click away from doing business elsewhere, the importance of increasing customer loyalty and lifetime value cannot be overstated.

By building relationships with new customers and strengthening relationships with existing ones via social networks, it stands to reason both will increase.

• Provide marketing insights. Even retailers who choose not to pro-actively participate in social media can benefit by listening to the groundswell of opinion expressed by consumers on such sites.

If it’s true that people trust recommendations and advice from other people online, then it behooves merchants to make a practice of hearing what these folks have to say about their brand, products and services.

Conclusion

Even though social media has not proven to be an direct sales panacea, the ability to build brand awareness, overcome reluctance, increase customer loyalty, provide marketing insights, and improve Search Engine Optimisation makes it a worthwhile channel that merchants can use to influence purchase behavior over the long term.