Chapter 2:
Introduction to Social Commerce
Social Media:
Social media is a powerful force of socialization, enabling interactions, communication, and
collaboration on a massive scale. It can be defined as “a group of Internet-based applications that
build on the ideological and technological foundations of Web 2.0, and that allow the creation
and exchange of user-generated content.”
The Major Parts of Social Media
The details of the three parts of social media are:
1. Media components and applications: These include text, audio, images, and video. Social
media uses a wide variety of content presentations, known as rich media .
2. Social network sites and services: These are websites that are platforms for social media. They
enable people to meet in communities of shared interests, hobbies, or causes; these are referred
to as social network sites . Starting with well-known names such as Facebook and LinkedIn,
there are thousands of social network sites around the globe. It also carries any website that
enables users to create public profiles within that website and form relationships with other users
of the same website who access their profile and are “community-based”.
3. Social media activities: Many activities can be performed using social media. The major ones
are:
● Sharing: Sharing content among users (e.g., in discussion forums, chats, or video and
photo exchanges; e.g., on Snapchat). It is the extent to which users exchange, distribute,
and receive content.
● Presence: Finding where your friends are at a given time. It is the extent to which users
can know if others are accessible.
● Conversations: There are many ways to have conversions using social media tools,
ranging from Twitter to Facebook to Whatsapp. It is the extent to which users
communicate with other users in a social media setting.
● Relationships: Users can relate to each other in many ways. For example, you can join a
group in LinkedIn or follow somebody on Twitter. It is the extent to which users can be
related to other users.
● Reputation: Users like to know the social standing of others. t is the extent to which users
can identify the standing of others, including themselves, on a social media setting.
Identity:
● Disclosing who you are is an integral part of many social networks. Having a profile is
essential to build relationship. It is the extent to which users reveal their identities in a
social media setting.
● Groups: Given the large size of social networks, many social media platforms offer
smaller communities. It is the extent to which users can form communities and subcommunities.
Social Media Marketing (SMM)
A major area of application of social media is social media marketing (SMM) , which is the
process of conducting marketing activities, such as marketing communication, engagement, and
advertising. The major objective of SMM is to attract the attention of potential buyers through
social media tools and platforms (Media 2014). In SMM, marketers create content for this
purpose by themselves, or by using user generated content.
Web 2.0 Tools and Applications
A software application (app) , also known as Web application , is a piece of software (usually
small) that is run on the Internet, or on an intranet on your workplace computer, or on your
wireless device, such as a smartphone or tablet. Apps are designed for end-users.
Representative Characteristics of Web 2.0
User-Generated Content
User-generated content (UGC) , also known as consumer generated media (CGM), refers to
media content that is produced by end-users and is publicly available. It is also used to describe a
wide range of applications, content creation, and other activities. Examples include reviews,
recommendations, problem solving, marketing communication (such as user-generated ads),
news, word of mouth, and entertainment. Some social media sites are entirely populated by
UGC, such as YouTube (videos)
Social software
Social software encompasses a range of software tools that allow users to interact and share data
and other media.
Microblogging
Microblogging is a form of blogging that allows users to write short messages, post an image, or
embed a video, and then publish them on a forum. These messages can be delivered as text
messages from mobile devices, as instant messaging, through e-mail, or just posted on the Web.
The messages are delivered in real-time or close to it (e.g., commentary during a sporting event).
Social network
A structure that describes social relationships and flows of information and activities among the
participants in a community. The structure is made of nodes that describe the participants
(people, computers, other objects). These nodes are connected by lines that describe the
relationships and activities in the community. The nodes in a network are connected by one or
more interdependencies, such as ideas, values, visions, ideologies, financial interest, friendship,
or similar interests. The structures can range from simple to very complex.
Social network services
Social network services (SNSs) (also known as social network sites), such as Instagram or
Facebook, provide and host a free Web space for people to build their public profile. They also
provide communication and support tools (e.g., blogs, forums, polling, e-mail, and chatting
capabilities), and apps that enable different activities. Social networks are peopleoriented. Today,
corporations have a great interest in the business aspect of social networks, for professional
reasons as well as for networking and for promoting products and services.
Social networking
Social networking refers to the execution of any social media activity, including having a
presence in social networks. It is the act of exchanging information, private or public, through
various forms of network technology, such as the Internet, cellphones, and other devices and
services, using social media tools, apps, or networks. Social networking includes all social media
activities, regardless if they are done in social networks or in any other website (e.g., corporate
portal). Social networking is viewed as being all about people and relationships, basically
describing the activities conducted in social network sites.
The Social Networking Landscape
The Major Capabilities and Services Provided by Social Network Sites
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Users can construct a Web page where they are able to present their profiles to the public.
Users can create a circle of friends who are linked together.
The site provides discussion forums (by subgroup, by topic).
Photo, video, and document viewing and sharing (streaming videos, user-supplied
videos) are supported.
Wikis can be used to jointly create documents.
Blogs can be used for discussion, dissemination of information, and much more.
Some social network sites offer community e-mail and instant messaging (IM)
capabilities.
Experts (including paid and non-paid) can be made available to answer members’
queries.
Consumers can rate and comment on products and services.
Online voting may be available to poll members’ opinions. Some sites provide an enewsletter.
Some sites provide an e-newsletter.
Some sites support conference (group) chatting, possibly combined with (document and
image) sharing.
Users can chat both by text (Instant Messaging) and voice.
Message and bulletin board services are available for posting information.
Some social network sites provide storage for content such as photos, videos, and music.
Users can bookmark their self-created content.
Users can find what is going on in others' networks, or in topics of interest.
Users can shop, relying on advice received from friends and other shoppers.
Crowdsourcing
Crowdsourcing is a platform for using collective intelligence for conducting social decision
support and other social commerce activities. Crowdsourcing is usually managed over the
Internet.
Crowdsourcing utilizes the wisdom of crowds to collectively execute tasks such as solving
problems, innovating, or completing large projects by dividing the work among many people. In
the crowdsourcing process, the initiator recruits a crowd (e.g., customers) to create content,
accomplish a cumbersome task (e.g., additions to Wikipedia), or conduct research and
development. This is based on the idea that many heads are better than one. The collective
intelligence of large groups is assumed to be able to solve complex problems at low cost
The Process of Crowdsourcing
Crowdsourcing can be viewed as a collective problemsolving or a work-sharing process and
usually is conducted on the Web. In a typical example of crowdsourcing, problems are
broadcasted either to a known crowd (e.g., employees or business partners) or to an unknown
group of participants (e.g., expert problem solvers or consumers).
The communication usually starts as an open call for solutions. The members of the crowd are
organized as online communities, and members submit individual solutions. The crowd may also
discuss the solutions and may vote for a final short list. The final selection can be made by the
crowd or by management. The winning individuals in the crowd are compensated, either
monetarily or with special recognition or acknowledgement of a job well done. In other cases,
the only rewards may be the intellectual satisfaction.
Benefits of Crowdsourcing
● Problems can be analyzed or solved at comparatively little cost. (Payment can be
determined by the results; however, sometimes there is no monetary payment, just praise
or accolades).
● Solutions can be reached quickly since many people work on the needed research. In
addition, product designs may be expedited.
● The contributing crowd may reside within the organization, so talents may be discovered.
By listening to the crowd, organizations gain first hand insight into their customers’ (or
employees’) desires. There is built-in market research when the crowd is composed of
customers.
● Crowdsourcing can tap into the global world of ideas. The crowd may include business
partners, customers, academicians, etc.
● Customers tend to be more loyal if they participate in a company’s problem solving
process.
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Crowdfunding
Crowdfunding is an Internet platform for collecting small amounts of money from many
individuals (a crowd). The money is collected for several possible purposes. Most common ones
are:
● Equity funding:This is one way for funding start-ups. The contributors get shares of the
company. The recipient of the funds can get an idea off the ground very quickly.
● Equity funding: is done by intermediaries such as Kickstarter.
● Rewards crowdfunding: “entrepreneurs pre-sell a product or service to launch a business
concept without incurring debt or sacrificing equity/shares.”
● Contribution to a cause: People raise money as a philanthropy activity for individuals in
need and for civic projects.
Virtual world
A site for online communities situated in a computer-generated setting, where users socialize and
work with one another through the use of avatars. Objects, jobs, homes, and businesses are
created in a 3D environment, and are owned by the residents. It is an interactive environment,
which is fun and satisfying.
Virtual worlds (also referred to as digital worlds or metaverse ), usually structured as interactive
3D virtual environments, and are created for users to inhabit and interact. Users feel as if they are
actually within the environment because they have the ability to control certain features of the
virtual world. Virtual worlds, according to Wikipedia, initially appeared in massively multiplayer
online games; however, they are not limited to games. Players can create a character that travels
between buildings, towns, and even planets and stars, as well as conduct activities there.
Several different types and purposes of virtual worlds
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The worlds can be used by many users who access them via an online interface.
The interface is mostly 3D, which is more engaging than 2D.
All interactions are in real time from anywhere.
Most of the content is user-generated. It is facilitated by tools provided on the sites.
The virtual world is always in motion, regardless of the presence of its residents.
Socialization is encouraged. Tools are provided for engagement and for creating groups
and socially oriented activities.
● Communication among users can include text, graphical icons, visual gestures, video
clips, sound, and so forth.
● Use of avatars is a common way to represent the residents of the virtual worlds.
Avatars
Avatars are interactive, animated, computerized characters that are graphical images designed to
look like people and are programmed to exhibit human behavior. Avatars have unique names and
can move around. Advanced avatars can “speak” and display behaviors such as emotions,
gestures, and facial expressions. They can be fully automated to act like robots. Avatars are
designed to gain the trust of users.
The purpose of avatars is to make the human– computer interface more realistic. They are also
interactive conversational characters . They are being used extensively to support users’ Internet
chat with companies (e.g., Live Chat), representing the company’s employees or “help desk.”