Introduction

This chapter contributes to knowledge by exploring the roots of social commerce (s-commerce) and provides an overview of what s-commerce is and how it may develop in the future. As such, this chapter seeks to:

  • explore the origins and roots of s-commerce;

  • examine definitions of s-commerce; and

  • investigate the potential of the s-commerce concept.

S-commerce remains a relatively new phenomenon with research interest in the topic starting to gain exponential increase from 2004 onwards, with the emergence and popularity of social media platforms such as Facebook and Twitter (Wang and Zhang 2012; Lin et al. 2017). To date, the concept lacks a clear-cut definition and can thus be best described as fuzzy, which “possess two or more alternative meanings and thus cannot be identified or applied reliably by different readers or scholars” (Markusen 1999, p. 870; Liang and Turban 2011). The following sections will first review the historic roots and foundations of s-commerce, which allows for providing an explanation as for why it remains fuzzy, before exploring its definitions, and moving on to a future outlook.

The Role of Social Media Today

Today it is almost unthinkable to live a life without smartphones and the internet. We are connected on a 24/7 basis and exchange information on a real time scale with people living almost anywhere in the world. Being online and available implies an opportunity not only to communicate with others, but also to indulge in consumption behaviour wherever we are. This has led to the dot.com business idea booming in the 2000s, which saw the creation of a manifold of companies, some of which are still in existence today (e.g. Leiner et al. 1997; Investopia 2018). Continued research and development activities into wireless technologies and electronic devices, as well as improvements made in the area of electronic commerce (e-commerce) have fostered the creation of mobile commerce (m-commerce) (Senn 2000). Consumers now have shopping platforms literally at the tip of their thumb, scroll through providers’ apps, save their favourite products, add them to wish lists, and indulge further in a buy-now-see-now shopping culture. S-commerce goes even further in that it involves a variety of consumer tools to socialise and share commercial-related information (Lin et al. 2017).

Social media platforms, such as Facebook, Twitter, Instagram, and Pinterest, have further changed the business world (Fraser and Dutta 2008). Companies are no longer broadcasting their messages as a monologue, but are (ideally) actively engaging into a dialogue with their consumers. Businesses can share their videos, blogs, and product information, or even pose questions and polls to encourage responses in an effective and efficient way, reaching a global audience, whilst consumers have the opportunity to share this content or create their own, comment on links, like pictures, or share their concerns instantaneously and in real time. Our world has changed to becoming increasingly transparent, with every action causing an even greater reaction that is broadcasted globally, with everyone watching (e.g. Doherty and Delener 2001; Kaplan and Haenlein 2010).

Origins and Roots of S-commerce

Figure 1.1 provides a visualisation of the key milestones and historic developments leading to the s-commerce concept. The 1970s laid the foundations for s-commerce, with the emergence of the internet or Web 1.0, which was commercialised in the 1990s and gained increased importance in our daily lives (e.g. Leiner et al. 1997; Investopia 2018). It is at the same time that s-commerce was born, with authors (Curty and Zhang 2011; Friedrich 2015) insisting that the roots of s-commerce can be traced back to the late 1990s. Increased investments in technology and its subsequent infrastructure have fostered the creation of Web 2.0 and the development of e-commerce opportunities (Leiner et al. 1997; Lai 2010; Investopia 2018), which allowed Amazon.com to ship its first book, which was purchased online, in 1995 (Olenski 2015).

Fig. 1.1
An illustration of milestones and historic developments leading to the s commerce concept. An arrow with its head downward explains the process from mid 1990 to 2009.

Key milestones in s-commerce development

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In a similar vein, research on s-commerce can be traced back to the late 1990s. Nevertheless, the explosive growth of this field of study only started in 2004, the same year in which Facebook and many other social media sites were founded (Lin et al. 2017). According to Lin et al. (2017), the earliest scholarly publication on social commerce was written in 1999, even though the term ‘social commerce’ was first used in this context in 2007. Since then, it has grown proportionally alongside social media research in terms of a number of publications. Zhou et al. (2013) report an increasing trend of publications on s-commerce from 2003 to 2012. Over the last decade, the number of academic publications on s-commerce has grown exponentially (Lin et al. 2017; Zhang and Benyoucef 2016).

A majority of research focusing on s-commerce is contextualised in the area of information technology (e.g. Shanmugan and Jusoh 2014; Wang and Zhang 2012; Zhou et al. 2013), yet lacks application in marketing and management. Yet, past studies predominantly focus on consumer behaviour, for example on customer experience and web design (Busalim and Hussin 2016). Research on s-commerce is almost always underpinned by social-related theories, which indicates the important role of social aspects brought by the social nature of s-commerce (Busalim and Hussin 2016). This is related to customers and the impact of social interactions on purchasing intention or the decision-making process in s-commerce. According to Lin et al. (2017), dominating topics in the s-commerce remit are organisation, advertisement, and word-of-mouth. Despite its high relevance across the entire decision-making and consumption process, the majority of publications on s-commerce centre on the post-purchase phase (Zhang and Benyoucef 2016).

The Concept of S-commerce

Definitions and Characteristics of S-commerce

Broadly speaking, e-commerce refers to any economic activity that is transacted online and encompasses a wide variety of technologies, including, but not limited to e-mail, telephone, and mobile devices (e.g. tablets and mobile phones), and/or social media (Niranjanamurthy et al. 2013). Social media and Web 2.0 (Lai 2010; Lin et al. 2017) have led to the emergence of s-commerce, and facilitated a shift from product-oriented platforms, which are typical in e-commerce to platforms, to those that are strongly customer-oriented (Wigand et al. 2008; Huang and Benyoucef 2013a). In 2005 Yahoo firstly termed ‘social commerce’, when they created a feature on their online platform that allowed their end-consumers to create, share, and comment on product lists (Wang and Zhang 2012).

S-commerce can be considered “an interdisciplinary subject that concerns business models and strategies, consumer and organization behavior, social networking technologies, analytical techniques, system designs, business practices, research methodologies, and prospective and retrospective assessment of business value” (Zhou et al. 2013, p. 2). A range of current definitions are displayed in Table 1.1 (Definitions of s-commerce), which are discussed below.

Table 1.1 Definitions of s-commerce
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From the definitions in Table 1.1 it becomes apparent that the concept of s-commerce remains fuzzy until today. Definitions consider s-commerce to be “a multi-user-based e-commerce” (Yamakami 2014, p. 285), “technology-enabled shopping experiences” (Shen and Eder 2011, p. 29), or “a various types of commercial and social activities” (Liang et al. 2011, p. 69). Aside from the differences, when looking at s-commerce as an emerging category of e-commerce (Kim 2013), four themes seem to be common ground to characterise s-commerce, namely social media, interactivity, extension of commercial activities, and new participants in online commerce.

Zhang and Benyoucef (2016) state that s-commerce combines social mediawith commercial activities. This implies that social networking sites (SNS), such as Facebook, contain more social functions (e.g. like, share, comment, and react), which distinguish s-commerce from e-commerce. Thus, s-commerce is mediated by SNS, not only by electronic platforms as is the case for e-commerce (Marsden 2009a; Wang and Zhang 2012; Zhou et al. 2013; Shen and Eder 2011; Smith et al. 2013; Hajli and Sims 2015). Key platforms that have opened up new business opportunities and business models are LinkedIn, Facebook, and Twitter (Liang et al. 2011).

Contrary to e-commerce, s-commerce is characterised by a high level ofinteractivity (Busalim and Hussin 2016). The use of modern technology and use of Web 2.0 support and facilitate online interactions (dialogues) and user contributions in the process of acquisition through s-commerce (Liang et al. 2011). SNS allow consumers to react to messages broadcasted and thus, fosters greater participation across the entire consumption process (Baghdadi 2013; Sturiale and Scuderi 2013). To reiterate this further, product reviews are communicated in through comments made by friends on SNS (Busalim and Hussin 2016), which implies that s-commerce is a more social and collaborative approach to creating content than traditional online marketplaces as individuals are involved in the information exchange (Lin et al. 2017).

S-commerce brings forward a new range of commercial activities that can be integrated and conducted (Stephen and Toubia 2010; Wang and Zhang 2012; Zhou et al. 2013; Lin et al. 2017), which include not only the information, acquisition, and after-sales process, but also comparing, curating, sharing relevant content on products or services. Examples of the latter activities encompass word-of-mouth, advertising, co-creation, user-generated content, information sharing, and purchasing (Busalim and Hussin 2016). A new customer experience is created and delivered (Lin et al. 2017), which has the power to build closer relationships with customers, to increase sales, and to foster loyalty towards the business (Hajli 2014). Lin et al. (2017) highlight that bricks-and-mortar firms use social media in this context to increase their overall business performance (Lin et al. 2017).

S-commerce further encourages new participants to enter the electronic marketplace. Through the integration of social media peer-to-peer sharing emerges as a megatrend, with organisations such as Airbnb and Uber emerging dominantly in the marketplace (Stephen and Toubia 2010). Yamakami (2014) describes this phenomenon as a multi-user-based type of e-commerce, which goes beyond the traditional company-buyer relationship. This online community building aspect in which peer-to-peer sharing is dominant is a unique characteristic of s-commerce (Busalim and Hussin 2016).

Similarities and Differences to Related Concepts

A key question that thus far remains unanswered is in how far s-commerce differs from e-commerce and m-commerce, as the concepts are closely related. M-commerce is a subset of e-commerce and implies that business is conducted through mobile devices, such as smartphones, tablets, or any other portable electronics (Senn 2000; Sharma and Crossler 2014). It fosters hyper consumption by allowing consumers to shop anywhere, whether this may be on a train, in a café, or on the beach (Meola 2016; Allen et al. 2017; Parker and Doyle 2018).

Similar to m-commerce, s-commerce has evolved as a subset of e-commerce, which harnesses social media platforms and Web 2.0 technologies (Liang and Turban 2011; Huang and Benyoucef 2013a; Sharma and Crossler 2014). Authors agree on the fact that s-commerce can be considered an evolution of e-commerce (Kim 2013; Busalim and Hussin 2016). Yet, it does not rely on electronic platforms only, but integrates SNS and enables a close interaction between the parties involved (Zhang and Benyoucef 2016). Thus, s-commerce could be described as a special kind of e-commerce that incorporates interactions in a social environment such as Facebook or Instagram (Sturiale and Scuderi 2013). Especially social and/or relational aspects become relevant in s-commerce as opposed to simply transactional aspects in e-commerce. This is mirrored by Wu et al. (2015) who consider s-commerce to be personal recommendation behaviour amongst peers, namely word-of-mouth, applied to the concept of e-commerce. This interconnectivity has led to an increased sharing behaviour, which sees consumers being exposed to more deals, discounts, and trends than ever before (Stephen and Toubia 2010). Hajli (2014) highlights that this type of sharing behaviour has changed the relationship between customers and brands in that the bonds are closer than ever before, resulting in increased transactions and subsequent profits. To reiterate this further, a majority of brands have set up social media fan pages (Facebook), Live Stories (Instagram), or Twitter profiles that also direct interaction with customers and real time responses to queries thereby creating a continuous communication flow and innovative way of conducting business (Amblee and Bui 2011; Michaelidou et al. 2011; Hajli and Sims 2015; Lin et al. 2017).

Authors (e.g. Stephen and Toubia 2010; Kim 2012; Zhou et al. 2013; Hajli and Sims 2015; Huang and Beneyoucef 2013b) indicate that a key difference between e-commerce and s-commerce is an observable shift in bargaining power from the seller to the end-consumer, with end-consumers being able to utilise internet-based media to share, compare, like, sell, and buy in a variety of online marketplaces. While e-commerce mostly focused on the company-consumer relationship, s-commerce is multi-user-based (Yamakami 2014). As such s-commerce is different from social shopping, in that the former implies that sellers are connected through a digital platform, whilst the latter suggests that customers are connected with each another to communicate. This implies that the role of the customer varies from being a seller by offering products and/or service through platforms such as eBay, to actively generating content by writing reviews on purchases and creating recommendations (Stephen and Toubia 2010).

Authors (e.g. Liang et al. 2011; Ng 2013) have highlighted three trends that developed within e-commerce and led to the newer concept of s-commerce:

  1. 1.

    Selling through social media, by for example including commercial tools on already existing social media channels

  2. 2.

    Enhancing e-commerce website (e.g. ASOS, Net-a-Porter, Boohoo.com) by adding additional social media features

  3. 3.

    Incorporating social media to enhance overall business performance of brick-and-mortar retailers (offline), to, for example, further develop their customer service

Stephen and Toubia (2010) further insist that sellers create a unique customer experience by creating personalised online shops, which can be interconnected through hyperlinks, and individuals are operating on a commission basis, which provides an incentive to performing well and continuously innovating their online shops.

Implications and Outlook

Strategic Goals and Potential Risks

With new developments as in the case of s-commerce, there are always specific strategic goals linked to them. According to Stephen and Toubia (2010), managers want to make use not only of social value, but also especially of economic value generated from s-commerce. This includes the ability to make informed decisions based on social media data (Busalim and Hussin 2016). Building on increased assistance throughout the consumption process, they aim to increase sales through s-commerce (Lin et al. 2017). Since Web 2.0 and social media lead to more social and interactive shopping experiences (Friedrich 2015), companies seek to improve the relationship quality to their customers. The same holds true vice versa: those companies that have already established high-quality relationships with their customers expressed through commitment, trust, and satisfaction have the potential to enhance s-commerce intention (Hajli 2014). As s-commerce involves the sharing of personal stories and experiences with products and services, companies want customers to be brand advocates (Busalim and Hussin 2016) and thereby use for example user-generated content to increase awareness for the brand.

Nevertheless, there may also be potential risks in the application of s-commerce. If not done effectively, advertisements on social media will lead to higher advertisement avoidance rates than conventional advertising (Kelly et al. 2010). Furthermore, there is a relatively easy entry to s-commerce which in turn can lead to a fierce competition in the industry (Zhou et al. 2013) and make it hard to differentiate one company’s service from the other. Moreover, it must be noted that consumers’ demographics (e.g. gender or age), personal traits such as price consciousness may vary the potential effect of s-commerce on marketing-relevant outcomes such as customer satisfaction or increase in sales (Zhang and Benyoucef 2016). The same holds true for the characteristics of content used in s-commerce as these antecedent factors could vary the impact of s-commerce under different conditions.

Future Developments and the Potential of S-commerce

Extending current trends, the future of s-commerce might be reflected in mobile marketing and, thus, m-commerce, or even virtual commerce (Lin et al. 2017). This would open up new spaces for the application of s-commerce where consumers would enter new types of shopping experiences. Moreover, boundaries between social interactions and new types of commerce will fade and create new chances for close relationships to customers.