Opinion: Social networking sites have little influence on e-commerce, says JupiterResearch.
The influence of social networking sites on e-Commerce has been overblown and such sites have very little influence on purchases, according to a report the week of Nov. 5 from JupiterResearch.
"There has been a lot of talk about social shopping," said Patti Freeman Evans, the report's lead analyst. However, that talk hasn't translated into sales.
"Social and community sites still rank low in shoppers' minds as useful places to research and shop for gifts," Evans said. "Only 3 percent of users who plan to buy online this holiday season and 6 percent of those in the segment who are ages 18 to 34 plan to add a wish list or gift list to their MySpace, Facebook or similar Web site page to help their friends and family select gifts."
Still, reluctance to use a specific shopping service from a social networking site does not necessarily translate into a lack of influence. Evans argued that JupiterResearch's polling shows that consumers rarely say the social networking sites factor in at all.
This has some fascinating potential ripples throughout e-commerce. First, let's assume the numbers are accurate. Having worked with Evans repeatedly over the years, I have found her to consistently be the most informed and intelligent e-commerce observer today. Survey results are only as good as the analyst interpreting them, so we're in good hands with Evans. (This has nothing to do with the undeniable fact that anyone with the word "Evan" somewhere in their name usually utters things worth listening to.)
So if we assume Jupiter's right, we need to think through what this means. The assumption for years has been that as social networks grew, the collective wisdom of the group (The "collective wisdom" of groups of teenagers? There's a straight line if I ever heard one.) would influence huge areas of the members' lives, from clothing choices to dating advice to the kind of car they should drive.
Therefore, it was assumed that the most powerful social networking sites would strongly drive purchases.
Before we completely abandon those beliefs, consider the possibility that the conventional wisdom may not necessarily contradict Jupiter's conclusion. Even the best of surveys can't indicate what influences buying behavior. It merely reveals what consumers say they believe they are influenced by. Are the consumers being truthful? And even if they are being truthful, do they truly know what is influencing them?
Let's also broaden our practical definition of social networking. On Amazon.com, an incredibly popular feature is consumer-posted product reviews. That is consistently cited as a strong influence on Amazon sales. Wouldn't that be properly classified as social networking? It's messages from the collective community.
How much of this is a factor of context? The Jupiter report supports the premise that people today don't go to those social sites with the objective of doing e-commerce research.
But what if the next generation of search engines intelligently combed such sites, looking for product discussions and allowed those to appear near those products on Amazon, eBay or, for that matter, RiteAid.com? You'd then be marrying the social networking site advice with the context of a site designed for e-commerce.
There's also the susceptibility aspect of influence. Are consumers saying that they hear all those product discussions at social networking sites but either don't care or do not give it any credibility? Hence, they are literally not influenced by it.
If we look at the other big social e-commerce trend todayconsumer-created videoswe see one common thread: credibility. Or, more precisely, the eternal search for credibility.
The premise is that a large community of consumers will, by and large, give honest, truthful advice and that the community would police itself. In the beginning, though, conartists and salespeople (Is there a difference? Yes. Con artists rarely work on commission.) typically pollute those communications until community policing gets mature enough to work.
Amazon announced Nov. 1 that it has added videos for more than 450 of its top-selling holiday products. The initial videos look to be commercialsand cheap ones at that. But as the community gets involved, will the credibility improve? And will that boost influence?
That's the problem with consumers today. Just when e-tailers have them figured out, they go and do something surprising. Like show signs of having a brain stem.
Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesn't plan to stop any time soon. He can be reached at Evan.Schuman@ziffdavisenterprise.com.
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Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.