2013 was a big year for social commerce. If Facebook’s IPO in 2012 made social commerce “real” then Twitter’s IPO this year further established the potential of the social commerce market. It also brought some credibility back after Groupon’s challenges as a public company. However, while social media giants like Facebook and Twitter are poking around the edges in social commerce, the rest of the market (and there are a lot of us) is trying to figure out what’s next? What I suspect the majority of us will agree on is that the social commerce market will breakout in a big way in 2014. Here are 5 things to keep an eye on:
1. Will anyone be able to influence where shoppers buy?
At the end of the day, if all social commerce startups do is become affiliates of Amazon or acqui-hires for Facebook, that’s probably not the next billion-dollar idea. To truly disrupt, social commerce startups will need to influence in 2014 not only what people buy but from where as well. Whoever can capture the combination of the “what and where” to buy will be a truly disruptive force to reckon with.
2. Will Facebook do ANYTHING interesting here?
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Many have asked me if Google will do anything interesting in social commerce given my time there. Based on what I’ve seen as an interested observer, along with the trajectory of Google product search and the clear focus on Google+, I’m not convinced social commerce is a top priority for the Googleplex in 2014. If I had to pick between the two, more likely it’s going to be Facebook. It’s conceivable that Facebook could build a virtual store of all the products your friends like. Is this something Mark Zuckerberg wants to bite off (they’ve alluded to it in the past) or are they content taking advertising dollars and driving traffic to Fab.com, BeachMint, Nordstrom and every other retailer? Most likely, Facebook will wait to see if a really disruptive social commerce company breaks out, attempt to replicate and then eventually buy it. That said, given the size of this prize, one could see Facebook taking a stab out front on its own platform in 2014.
3. Will retailers try innovative approaches other than share buttons?
According to Internet Retailer, around 80% of the top 300 online retailers have “Like” buttons on product pages and more than half have Pin buttons. Will any of them try to do more than that? Will Amazon ever post social updates other than currently running discounts!? Most likely, they’ll take a wait and see approach unless Facebook’s “pay to play” admittance forces their hand. To date it has been the most logical strategy given the speculative nature of the market and the required lean agility and rapid experimentation needed to take part. Both of which are not naturally concentrated in the retail ecosystem. It’s more likely that these retailers will cautiously experiment with several hundred startups following in Bazaarvoice’s shoes with new B2B social commerce solutions in 2014.
4. Will Pinterest be the next Social Commerce IPO?
When people talk about big pre-IPO companies in the valley, Pinterest often comes up in conversation. Although it is kind of a misnomer, the designation makes sense for Pinterest. It’s the third biggest source of social referral traffic outside of Facebook and Twitter and it’s growing the quickest. More impressively, the absence of any public info on material revenue didn’t stop Pinterest from closing a massive $225M round in October at an eye-catching $2.5B valuation. In truth, it’s likely that Pinterest is making many millions in referral and affiliate fees already without really trying. If the company decided that it needed to show more growth in revenue prior to a public offering it would be pretty easy to turn the faucet on. With the enviable position of being the platform that hosts more than 70 million users, which declare their interest for retail products every day, monetization won’t be hard.
Brands looking to reach these targeted shoppers with a high propensity to buy could pay Cost Per Engagement (CPE) dollars that are north of what Facebook and Twitter can charge. If it does IPO, another social commerce public offering will clearly have a major impact on investment into the market in 2014 as well.
5. Can Someone Find the Sweet Spot Between Social and Mobile?
I’m talking about beyond the power of push notifications and the fact that mobile is the center of everything. How does social commerce uniquely leverage mobile? Could someone figure out a non-obvious but truly disruptive way to use stuff like location, photos, video, contacts, payments, etc. to make shopping awesome?
If someone really cracks it on mobile (e.g. think Uber level awesomeness in transportation applied to retail), all bets are off. Things like unified loyalty cards with integrated payments and real-time expert or friend’s shopping advice seem to have a lot of game-changing potential. However, if it were that easy, someone would have already broken out by now. Most likely, the solution is sitting in front of our eyes. It just needs that magical cocktail of amazing execution, timing and luck. I’m betting we’ll see someone crack it in 2014!