Current stories about the wave of store closings by large national large retail chains discuss ecommerce’s impact in a monolithic way. References abound to the so-called Amazon Era, or the Amazon Effect. But Amazon is a complex, multifaceted player in the evolution of ecommerce, as its recently launched initiative in the social commerce space demonstrates.
While this Amazon Influencer Program was launched quietly into beta test in March, it represents a clamorous new phase in the emergence of a major global digital phenomenon that brand marketers are paying close attention to.
As described by the company, the Amazon program is “exclusively designed for social-media influencers with large followings and a high frequency of posts with shoppable content.” These select influencers get their own URL access into the main site. They earn fees based on the “purchases they drive through their social media platforms.”
While the entry of Amazon is significant, our research shows it to be but one among many participants in this growing global social commerce field, one that encompasses a wide range of individual-based and peer review platforms. The key common denominator is the intersection and even merging of two major areas of digital activity and innovation: social media and shopping.
In both cases, the impact has been transformative — creating new types of interpersonal formats, interactions, celebrities and business people. In the U.S. one finds not only a major corporation like Amazon, but also individuals, like YouTube beauty-influencer Michelle Phan. She is active with her 9 million followers and beauty-sampling company, Ipsy, which Forbes valued at about $500 million in 2015. Similar entrepreneurial operations of various sizes can be found worldwide, from the UK to Latin America to South Africa.
But overall, some of the largest and most sophisticated of these individual entrepreneur-based social commerce practices are in China. They are state-of-the-art in comprehensive integration of both the social and ecommerce components — and also big business. For example, there is a Chinese woman named Cherie, 26 with 1.64 million fans following her on the Weibo social network.
Cherie’s business brings in an estimated $15 million to $32 million annually in revenue, based on posting her photos online with different fashion styles, purchasable at her Taobao ecommerce site. There are no gaps in the transition from viewing to buying.
The Amazon development, in fact, is akin more broadly to overall developments in China. Commerce platforms are adopting content practices to engage people and content platforms are adopting commerce capabilities for seamless buying experiences.
For mainstream brands, these social-commerce entrepreneurs are introducing a new set of marketing concerns and opportunities for branding, message control, product quality and distribution. Their continuing success opens a new venue for tighter relationships between influencers and brands, as long as the trend is correctly identified.
The trend is not just about online “celebrities” with large followings or sales transactions taking place outside of corporate or retail channels. It’s both, combined. In turning their personal brands into ecommerce storefronts, these entrepreneurs are becoming their own combined and integrated social network and ecommerce channels.
While the social commerce trend is worldwide, there are country-to-country variations, given differences in underlying technologies and social infrastructure, as well as culture and traditions.
Among the factors global brand marketers need to consider: if the influencer is someone well-known in the market before expanded into this area or is an online celebrity; whether they sell only their brands or a range of products; if they transact the sale directly through their own site or a third-party site; whether they also tie in to promote their products lines with established retailers. And, of course, knowing their particular approach to content.
But despite these complexities, these social-commerce innovators represent channel opportunities for brand marketers. These online celebrity trendsetters generate high levels of social engagement and embody a distinct character and charm that attracts fans. They are trusted for their expertise and lived-in understanding of styles and products. But tying in with them can be elusive.
Their appeal is independence and authenticity; they tend to be most interested in their own brands. For marketers to be successful, they need to recognize how they can attach to the social commerce entrepreneur’s own business, helping to build that influencer’s brand; enabling fast-paced content creation; providing audience, trend and conversational insights; turbocharging message distribution; and assisting with commerce fulfillment.
The success of these social commerce practices cements relationships between online influencers and brands. Many marketers have already made great strides to partner with social influencers for content development.
But the evolution toward social commerce provides a further opportunity to drive a greater link between marketing and sales and offer a route to justify the ROI of social.