Ethics andSocial 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 MitraIllustration Credit: Anindya Kundu

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.

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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.

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Left: George Washington on the $1 bill

Credit: Peasap

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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 Learn Your Secrets.” The New York

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 About Why We Buy. Crown

Business, 2008.

“Turning “Like” to “Buy” ”: Social Media Emerges as a Commerce

Channel.”. Booz & Co., 17 04 2011.

“Social commerce statistics.”. Bazaar Voice, n.d. Web.