6 Ways to Succeed With Social Commerce

There's a question hanging over newly IPO'd Facebook that's generating a lot of discussion: Is social commerce — i.e., having an online store within Facebook or another social site — working? This comes after a few big brands, including Gap, GameStop and J.C. Penney, closed their failed Facebook stores earlier this year. General Motors pulling its advertising from Facebook didn't boost confidence that the social networking site is effective at generating income for businesses other than itself.

Aside from making a black-or-white judgment call, what can be learned from these events? First, let's consider that we're in the very early stages of social commerce. The rules to this game are still being written. Second, let's realize that social networks aren't constructed or consumed like a typical website. It's a different game altogether.

Facebook realizes this and has published some guidelines and examples via its Facebook Studio blog on how to generate engagement. While not specifically related to social storefronts, this information offers insight on social commerce. The core takeaway: Speaking about subjects related to your brand is the best way to generate engagement, not directly promoting your own products or services.

So can we conclude that, perhaps, the big brands whose Facebook stores failed weren't social enough? That they tried too hard to sell and not hard enough to engage? It may be too soon to tell, but those inquiries are valid points to consider in your social commerce planning. Also important to consider: Who is succeeding at social commerce?

Aggregate data from Facebook store-building app Ecwid shows that f-commerce is alive and well in the small to midsize business (SMB) market. For SMBs that have both an e-commerce website and a Facebook store, typically 15 percent to 17 percent of their overall revenue comes from Facebook. Ecwid data also shows the average revenue of each Facebook store rose 40 percent in 2011.

My theory on why this is so points clearly to the idea that smaller businesses may be better at "socializing" and therefore have an inherent advantage at social commerce. Here are six concepts and best practices that can help your business succeed selling on social networks:

1. Recognize that social commerce isn't new. Historically, "social" has always been a part of the "commerce" experience, even before Facebook existed. People have always listened to their friends’ recommendations when researching and buying products, and we tend to appreciate (and buy more from) retailers that speak to us on a personal, one-to-one basis vs. those that talk in overt marketing terms. Social media sites like Facebook didn't invent social commerce. They just amplified it greatly, introducing a convenient, easy and fast way to communicate with friends and others.

2. Fully use today's powerful e-commerce tools. Merchants can now easily create f-commerce storefronts in minutes that integrate directly with their traditional website. By taking advantage of this new breed of software you'll also spend less time on administration.

3. Talk honestly and without marketing slang. Most brands understand that they need to communicate with their customers, but many aren't clear on what the conversation should be. A Facebook page is always a two-way communication; if you're not ready to engage your audience honestly and candidly, you won't be successful.

4. Don't disrupt the conversation flow. If you're going to make the leap from e-commerce to f-commerce, remember not to disrupt the original purpose of social networks — to connect people. You'll want to make the process as seamless as possible, integrating your store into the conversation and allowing people to shop without having to leave Facebook.

5. Avoid overt attempts at selling and focus on community building. Don't just transform your Facebook page into a list of product links. This will turn away consumers faster than you can imagine. Social networks are communication platforms first and foremost, so maintaining a flow of communication with — and between — your customers is key. Try to build a community around your products, engage your customers, encourage fan-to-fan communication and product discussions, then simply offer a convenient way to buy.

6. Harness the power of your biggest fans. The enthusiast base of your audience loves to be recognized, so consider leveraging engaging, community-building applications such as "Fan of the Week." This will help you to harness the power of your most avid customers. Ultimately they're your biggest supporters, so it pays to offer them something special. You'll be rewarded as they spread their enthusiasm to friends.

Forrester Research Analyst Sucharita Mulpuru said it best when she stated, "There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop. But it was like trying to sell stuff to people while they're hanging out with their friends at the bar."

If you're looking for clues to f-commerce success, think social and think small. For right now at least, this is where the results are.

Ruslan Fazlyev is the founder and CEO of Ecwid.