Should your company opt for e-commerce or social commerce?
It's not accident that the successful restaurants in your town (no matter where that happens to be) are probably located in close proximity to each other. Competition is a healthy thing. After all, did you know that the Latin background for the word "compete" means come together. As in, it takes more than one company or business to build a viable market.
On the Internet, of course, you won't necessarily have a guaranteed neighbor to help with building visibility for your company's e-commerce storefront.
Sure, search algorithms are getting smarter every day in their quest to help individuals find products and services that are local to them. But it probably makes sense to place your business in better context. That's why, for example, so many antique dealers flocked to eBay in its early days and why there are specific marketplaces organized across the Amazon platform.
But increasingly, I think that smaller companies will find it beneficial to congregate at sites that are far more attuned to their needs. The quintessential example of this (at least so far for me personally) is probably Etsy, the marketplace built up to support the local crafts movement.
Recently, I had a chance to speak with the CEO of another niche marketplace, one that cropped up to support the burgeoning market for hunting, fishing and outdoor gear. That site, called Wide Open Spaces, hopes to use social media exposure to drive sales for the relatively fragmented community of retailers and manufacturers that serve this space.
"We want to help that guy who makes lures out of his shop in Texas," said Denis O'Dwyer, founder and CEO of the Austin-based company behind the site.
Why in the world would a small company want to use a social commerce site like Wide Open Spaces rather than focusing exclusively on its own e-commerce strategy?
This isn't a small market: as of 2011, some federal government statistics suggest that about 37 million Americans were involved with hunting or fishing. Each sportsperson spent about $2,400 annually on their sport -- an estimately $90 billion per year according to another datapoint cited by O'Dwyer. That has translated into a community of about 125,000 members for Wide Open Spaces, as of the time I interviewed him earlier this spring.
Why in the world would a small company want to use a social commerce site like Wide Open Spaces rather than focusing exclusively on its own e-commerce strategy? Here are several benefits, which are specific to Wide Open Spaces, but represent the core value proposition behind social commerce sites in general:
- Access to a qualified community of buyers: O'Dwyer calls email the "original social channel." Wide Open Spaces uses it regularly to offer deals of anywhere from 20 percent to 50 percent off the products and services on the site. Retailers and manufacturers pay the site a percentage on each transaction, depending on their sales commitment.
- Social marketing exposure: One of the biggest gripes among small business owners is that they don't have enough time to nurture social media such as Twitter or Facebook. Wide Open Spaces actually will handle this for its brand partners, writing blog posts on the network and promoting suppliers on Pinterest and Facebook. (Twitter hasn't caught on as quickly, according to O'Dwyer.)
- Built-in distribution: Of the approximately 350 "brand partners" that currently use Wide Open Spaces, O'Dwyer said approximately 225 are small businesses that would otherwise find it difficult to find shelf space with a distributor or retailer.
Considered in this context, it might not be a bad idea for your company to affiliate itself with a social commerce marketplace for its particular industry, especially if it would like to increase its mix of e-commerce to real-world revenue.