Tag: mobile commerce social media

Mobile commerce sites grow loyalty through social media

These smartphone friendly websites are using Facebook, Twitter, Google+, and others to build relationships.

According to the latest research, mobile commerce websites are increasing their use of social media marketing because of the advantage it provides in generating a sense of a personal relationship between their customers and their brands.

The researchers in this study referred to the trend as “swift guanxi” due to its areas of effectiveness.

The term has been used because the “guanxi” concept is from China and is “broadly defined as a close and pervasive interpersonal relationship” as well as “based on high-quality social interactions and the reciprocal exchange of mutual benefits.” This, according to the researchers from the study, Robert M. Davison, Carol Xiaojuan Ou, and Paul A. Pavlou.

The researchers found that using mobile commerce in this way was highly effective for building loyalty.

Mobile Commerce - Loyalty via social mediaWhen they spoke of swift guanxi, they were talking about the ability to ease interactivity, loyalty, and repeat transactions when using social media for mobile commerce purposes. The data used in this study was gleaned from the leading online marketplace in China, TaoBao. They looked into the way that computer mediated communication (CMC) technology could be used for this purpose and convert shoppers who would otherwise have made a single purchase and never return, into a long term customer by way of personal rapport.

It had previously been assumed that shoppers had a preference for impersonal transactions. However, this mobile commerce study shows that both consumers and retailers have an inherent liking for the type of relationship that can fall under the guanxi label, even though the degree of that interaction may vary from one culture to the next.

According to Pavlou, “Nobody would argue that personal relationships are unimportant, but it is unfathomable that people in the U.S. would engage in such extensive communications and personal interactions for a small transaction.” He was referring to the fact that in China, for instance, a very small transaction where only a few dollars were spent could be the result of a communication that could take well over three quarters of an hour.

Mobile commerce continues to show signs of evolution

Mobile Commerce EvolutionMobile commerce is becoming more social

Commerce continues to evolve as more consumers become tethered to their mobile devices and place more importance on social media. This evolution first began in the 80’s with the advent of the Internet and e-commerce. The proliferation of mobile technology brought about mobile commerce, which has only emerged within the past few years and is still considered to be in a state of infancy. Now, however, commerce is showing signs of a new evolutionary step, one called “participatory commerce” or “Pinterest commerce.”

Participatory commerce continues to gain some traction

Participatory commerce, as a term, was first coined by Mark Pincus, CEO of Zynga, in 2005. The term became somewhat popular in 2010 to describe the business model of FashionStake, a retail startup that was acquired by Fab.com in 2012. The term itself refers to a sales model that allows consumers to participate in the design, selection, and funding of certain products they are interested in purchasing. In some ways, this model is similar to popular crowdfunding platforms like Kickstarter, where individuals funding a project have some control over how that project will take form.

Retailers find value in social networking

Participatory commerce began being called Pinterest commerce in 2011 during the social network’s unexpected rise to fame. The retail industry was quick to see the possible benefits that Pinterest represented and moved to leverage the social network to their advantage. While Pinterest does not allow for online sales, it has proved to be a valuable platform through which retailers can expose consumers to new products and encourage online shopping.

New forms of commerce becoming increasingly social

The term is not widely used and is often considered to be an unnecessary subcategory of mobile commerce itself. It does, however, draw attention to the growing role of social media in the mobile commerce sector. Sites like Pinterest already hold a great deal of influence over consumers and retailers are becoming more adept at using these platforms to connect with mobile consumers in various demographics.