From E-commerce To Social Commerce: A Close Look At Design .

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Electronic Commerce Research and Applications 12 (2013) 246–259Contents lists available at SciVerse ScienceDirectElectronic Commerce Research and Applicationsjournal homepage: www.elsevier.com/locate/ecraFrom e-commerce to social commerce: A close look at design featuresZhao Huang a, , Morad Benyoucef babTelfer School of Management, University of Ottawa, 55 Laurier Avenue East, DMS6142, Ottawa, ON, Canada K1N 6N5University of Ottawa, 55 Laurier Avenue East, Ottawa, ON, Canada K1N 6N5a r t i c l ei n f oArticle history:Available online 31 December 2012Keywords:E-commerceSocial commerceSocial mediaUser-centered designWeb 2.0a b s t r a c tE-commerce is undergoing an evolution through the adoption of Web 2.0 capabilities to enhance customer participation and achieve greater economic value. This new phenomenon is commonly referredto as social commerce, however it has not yet been fully understood. In addition to the lack of a stableand agreed-upon definition, there is little research on social commerce and no significant research dedicated to the design of social commerce platforms. This study offers literature review to explain the concept of social commerce, tracks its nascent state-of-the-art, and discusses relevant design features as theyrelate to e-commerce and Web 2.0. We propose a new model and a set of principles for guiding socialcommerce design. We also apply the model and guidelines to two leading social commerce platforms,Amazon and Starbucks on Facebook. The findings indicate that, for any social commerce website, it is critical to achieve a minimum set of social commerce design features. These design features must cover allthe layers of the proposed model, including the individual, conversation, community and commercelevels.Ó 2012 Elsevier B.V. All rights reserved.1. IntroductionThe rapid development of social media and Web 2.0 has provided a huge potential to transform e-commerce from a productoriented environment to a social and customer-centred one (Wigand et al. 2008). In essence, social media refers to Internet-basedapplications built on Web 2.0, while Web 2.0 refers to a conceptas well as a platform for harnessing collective intelligence (Kaplanand Haenlein 2010). Within this environment, customers have access to social knowledge and experiences to support them in betterunderstanding their online purchase purposes, and in making moreinformed and accurate purchase decisions (Dennison et al. 2009).Meanwhile, online businesses are able to capture customers’behaviours, which gives them insights into their shopping experiences and expectations, and helps them develop successful business strategies (Constantinides and Fountain 2008). Since suchreciprocal advantages have been recognized by business organizations, e-commerce is undergoing a new evolution by adopting avariety of Web 2.0 features, functions and capabilities in order toenhance customer participation (Kim and Srivastava 2007), promote customer relationships (Liang et al. 2011), and achieve greater economic value (Parise and Guinan 2008). This e-commerceevolution is commonly equated with the birth of social commerce. Corresponding author. Tel.: 1 613 562 5800x8036.E-mail addresses: [email protected] (Z. Huang), [email protected](M. Benyoucef).1567-4223/ - see front matter Ó 2012 Elsevier B.V. All rights 2.003In general, social commerce refers to utilizing Web 2.0 ine-commerce (Kim and Srivastava 2007), particularly core Web2.0 features such as user-generated content and sharing of content.The impact of Web 2.0 on e-commerce can be seen in both business outcomes and social interaction among consumers. More specifically, Web 2.0 significantly influences business transactions andthe reliability of business reputation systems (Swamynathan et al.2008). It can also strengthen business relationships with customers, increase traffic to company websites, identify new businessopportunities, and support product and brand development (Michaelidou et al. 2011). It may as well enable businesses to providehigh quality products, place them in a better position to predictmarket trends and maximize the effectiveness of their marketingcampaigns (Constantinides et al. 2008). For customers, Web 2.0can affect aspects such as customer control and value creation.With Web 2.0, customers’ perceptions, preferences and decisionsare not only based on information presented on e-commerce websites, but are also influenced by content generated by people on social networks (Constantinides and Fountain 2008).As indicated by Stephen and Toubia (2009), in the e-commerceenvironment Web 2.0 shifts market power from companies to customers. Furthermore, since their needs are altered by the increasingrequirements for online services and applications, customers arelooking for more social and interactive ways to stimulate engagement. Web 2.0 provides customers with new approaches to interactwith marketers and peer communities at the same time (Constantinides and Fountain 2008). Moreover, the value created by customersis significantly enhanced through Web 2.0 since the collaborative

Z. Huang, M. Benyoucef / Electronic Commerce Research and Applications 12 (2013) 246–259efforts of networked customers usually lead to better outputs (Kaplan and Haenlein 2010). One example is SAP, a major vendor in theERP software market, who invites external developers to work together within an innovative community to solve specific productproblems by providing collective intelligence through blogs and forums. Recently, thousands of e-commerce companies have adoptedor been willing to adopt Web 2.0 to develop social commerce initiatives. A report by Lewis et al. (2008) indicates that the growing popularity of social commerce is reaching 43% per year. Nearly 88% ofbusinesses expect to expand their investment on social commercein the future (Constantinides et al. 2008).Even though the aforementioned facts point to its rapid development and enormous potential, social commerce needs to be explored further. There are few studies that examine the concept ofsocial commerce and its applications (Lee et al. 2008, Constantinides et al. 2008, Parise and Guinan 2008) and explain the role ofWeb 2.0 in e-commerce development (Wigand et al. 2008, Kimand Srivastava 2007, Liang et al. 2011), but there is limited focuson social commerce design issues. Even those rare studies thatinvestigate social commerce interface design (Najjar 2011, Grangeand Benbasat 2010) do not offer a systematic understanding of social commerce and its customer-centred design. It can be arguedthat this lack of understanding may hinder the development ofeffective and efficient social commerce platforms. Hence, our studyprimarily investigates the design features required for social commerce to fulfill its promise.The following research question is investigated: what designfeatures need to be considered in social commerce design? To thatend we conduct an extensive review and classification of the literature covering the design of e-commerce and Web 2.0. Based onthe findings, we introduce a new model and a set of principlesfor social commerce design. We then apply our model to leadingsocial commerce platforms.This paper is structured as follows. Section 2 introduces theconcept of social commerce and briefly discusses the state-ofthe-art. This is followed by a comprehensive review of the designprinciples as they apply to e-commerce and Web 2.0 in Sections3 and 4. Section 5 introduces our new model for social commercedesign. In Section 6, an heuristic evaluation of our model is conducted on two social commerce platforms, and Section 7concludes.2. Social commerce247commerce as an online mediated application combining Web 2.0technologies, such as Ajax (Murugesan 2007) and RSS (Wigandet al. 2008) with interactive platforms, such as social networkingsites and content communities in a commercial environment. Withrespect to sociology, social commerce is about utilizing web-basedsocial communities by e-commerce companies, focusing on the impact of social influence which shapes the interaction among consumers (Kim and Srivastava 2007). Finally, Marsden (2009)addresses social commerce in terms of the psychology of socialshopping, where people are influenced by salient information cuesfrom people within a networked community when they shoponline.Although social commerce has been explained differently, theabovementioned definitions allow researchers and practitionersto acquire a broad understanding of its concepts. While these definitions imply different scopes for social commerce and e-commerce, they suggest that social commerce is an evolution of ecommerce (Kooser 2008, Curty and Zhang 2011, Wang and Zhang2012). Based on the above discussion, we define social commerceas a an Internet-based commercial application, leveraging socialmedia and Web 2.0 technologies which support social interactionand user generated content in order to assist consumers in theirdecision making and acquisition of products and services withinonline marketplaces and communities.The differences between e-commerce and social commerce canbe highlighted in terms of business goals, customer connection andsystem interaction. With regard to business goals, e-commerce focuses on maximizing efficiency with strategies for sophisticatedsearches, one-click buying, specification-driven virtual catalogsand recommendations based on consumers’ past shopping behaviour (Carroll 2008). Social commerce, however, is oriented towardsocial goals, such as networking, collaborating and informationsharing, with a secondary focus on shopping (Wang and Zhang2012). Regarding customer connection, customers usually interactwith e-commerce platforms individually and independently fromother customers, while social commerce involves online communities that support social connection to enhance conversation between customers (Kim and Srivastava 2007). As for systeminteraction, e-commerce in its classical form almost always provides one-way browsing, where information from customers israrely (if ever) sent back to businesses or other customers. Socialcommerce, however, develops more social and interactive approaches that let customers express themselves and share theirinformation with other customers as well as with businesses (Parise and Guinan 2008).2.1. Definitions2.2. Overview of current researchSocial commerce can be defined as word-of-mouth applied toe-commerce (Dennison et al. 2009). However, Parise and Guinan(2008) give a more comprehensive definition where social commerce refers to a more social, creative and collaborative approachused in online marketplaces. In their definition, Web 2.0 tools aresaid to be aligned with an emerging trend when users add valueby generating and sharing content. Wigand et al. (2008) capturethe alterations made by social commerce and describe the conceptas applying social media applications to shape business, hencetransforming a market for goods and services into a socially centred and user-driven marketplace.Social commerce involves multiple disciplines, including marketing, computer science, sociology and psychology, which mayadd to the diversity of definitions. For instance, in marketing, socialcommerce is about a noticeable trend in online marketplaceswhere businesses leverage social media or Web 2.0 as a direct marketing tool to support customers’ decision making processes andbuying behaviour (Constantinides and Fountain 2008). Focusingon computer technology, Lee et al. (2008) describe socialSocial commerce is starting to attract the attention of researchers, and a number of studies have been carried out recently, covering social commerce issues ranging from business applications tobusiness strategies.For instance, Serrano and Torres (2010) investigated Web 2.0applications for Openbravo, an open source ERP solution for smalland medium sized online businesses. The study claims that Openbravo ERP enables businesses to integrate a variety of Web 2.0 features into their current systems, which significantly improvesbusiness, social and collaborative capabilities. Costa and Tavares(2011) tried to understand social commerce – they refer to it as social business – by focusing on an existing industrial project, calledPLAGE, which has the potential to develop a collaborative environment for social commerce throughout its multiple social platforms.The findings reveal that having interoperable social platforms improves commerce collaboration, develops trust, and implementsstrategic approaches to leverage networked relationships in socialcommerce. Michaelidou et al. (2011) investigated the barriers,

248Z. Huang, M. Benyoucef / Electronic Commerce Research and Applications 12 (2013) 246–259usage and perceived benefits of social networking sites in smalland medium enterprises. They found that barriers include the perceived irrelevance of social networking sites within the industryand the uncertainty of their use to support brand development.This has not kept small and medium businesses from increasinglyusing social networking to attract customers though. The perceivedbenefits of using social networking in business include increasingbrand awareness and online communication, as well as improvingcustomer relationship management. Furthermore, Lee et al. (2008)found that Web 2.0 applications can largely increase the competitive advantage of small businesses. Indeed, when it comes toreaching customers with rich content, the authors argue thatWeb 2.0 applications give small businesses capabilities similar tothose of large ones.In addition to exploring its business applications and strategies,some studies investigate social commerce with regards to userbehaviour, decision-making, and relationship establishment. Forexample, Wigand et al. (2008) explored consumer needs for socialcommerce. They identified three fundamental needs that motivateconsumer behaviour through Web 2.0 within a co