The Near-Term Evolution of Social Commerce

1Executive Summary

Social commerce involves businesses using online collaborative tools — social networks, real-time feeds and user-generated contributions, for example — in order to sell products and services to consumers. The space is now more dynamic than ever: Hundreds of startups like Groupon, Zynga and CrowdStar have emerged, and it’s also attracting the attention — and cash — of online giants like Google, Amazon and Apple. And with so much attention at hand, social commerce is poised to experience rapid growth over the next few years.

This report examines the factors propelling the sector’s growth, how it will evolve over the next one to three years and what that means for those companies involved.

Three social commerce categories have now emerged: recommendations and reviews, group buying and shopping communities. We examine the different factors for each strategy, and offer recommendations for businesses and retailers, from implementing loyalty programs to considering just what consumers are willing to purchase in these online settings. We also examine the likely possibility of fragmentation, due to a proliferation of local markets, and potential inhibitors to the industry.

Relevant Analyst
P1040724

David Card

VP Research Gigaom Research

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