The Application of Social Media in Online Shopping - Literature review Example

Name: Xiaowen Ning Student Number: s3442379 Date: Topic Title: The Application of Social Media in Online Shopping Describe your topic in several sentences: The use of social media has contributed to an emerging form of shopping that merchants use to purchase their products on the web known as social shopping. It involves both social networking as well as online shopping. the application of social media in online shopping can be done using social web sites such as; youtube, Facebook, Instagram and Wechat. There is a growing number of merchants prone to use social media to assist doing business. The use of other technologies also assists this new-formed business type. This report explores the current situation of social media online shopping, also find the problems limit it as well as give a foreseeable development. What are some key questions that are going to be explored and answered in this project? This project will explore the following questions; 1. What is the development of online shopping in social media? 2. How can merchants use social media to do online shopping? 3. What are the majority customer types of this new business form? 4. What kind of technologies or marketing methods can be applied in assisting the development of social media online shopping? 5. What limit the development of social media on online shopping? How can we overcome it? 6. What prediction can be made about the ongoing development of social media online shopping? 1. What is the development of online shopping in social media? According to staff (2010), online shopping in social media evolved during the process when businesses where shifting from real time markets to a digital markets. Since everybody is accessing the internet and visiting social sites, online shopping in social media is inevitable. Social media enables social interactions among people where they can collaborate, learn, and share their ideas as well as opinions with other people. With the convenience that social media has brought, people and businesses were now able to interact with others in an environment which is self paced and can contribute effectively. This has led to the creation of attractive social sites that attract merchants to interact with site owners and purchase their products online. Online shopping in social media by merchants developed as a result of business to business e-commerce where businesses would purchase their products online from other businesses who offer those services over the internet. As described by King (2013), merchants and consumers want to be empowered and do shopping their own way. No one should tell them what they should buy, when to go shopping and how much they should pay for a particular product. Businesses have established this need and are suing social media as a venue where merchants can purchase their products online. Social media provides merchants with a great shopping experience through the integrated communication features as well as e-commerce features. This has made purchasing more fun and easier for merchants. Vend University (2013) argue that, with the future of business lying on the hands of customers, businesses have a task of monitoring customer trends of buying online. This will enable them grab and keep the interest of shoppers. Social media provides more information as well as transparency that people need and this has influenced many customers purchase their products online. Businesses have also shifted the marketing decisions by using social sites for monitoring feedback and connecting with their customers. The e-Marketer report (2014) noted that, social media has been an important channel for direct sales and this has influenced the development of online shopping. Social media is a valuable tool for influencing shoppers as well as assisting sales by engaging customers, brand awareness and influencing the increase of sales. The use of social media apps like the Facebook apps that have business features inspire and engage customers to shop online. Guo, Wand & Leskovec (2011, p.10) demonstrate that, the passage of information implicitly through social networks is an important driver that influences online purchasing activity. The use of link information depends on the role of the merchant in the social commerce network. 2. How can merchants use social media to do online shopping? Using social media has enabled businesses create social shopping sites that are popular with listings of products from customers who use the sites and recommending their favourite products. This new method of shopping offers business merchants with the necessary marketing solutions needed to increases their sales. The social shopping sites have information that emphasizes on what is new, hot and exiting in the market (Staff, 2010). According to the e-marketer report (2014), Merchants use social media applications for example, Facebook apps that have new creative business features to do online shopping. Merchants use social media to spur shoppers by creating, participating and sharing over the Web. They add buttons for social network on their product pages to encourage social sharing with online shoppers. They also use content which is user generated to purchase products, images as well as videos collections online (Price Waterhouse Coopers 2011, p.12). Merchants also use social media as a persuasive tool for research to for reviewing the opinions of friends online. It is evident that, product reviews are to a greater extends the digital tool which is leading in influencing internet users to shop online at a particular shop. Merchants also use social media to purchase products that they had not earlier bought. They also follow products on social networks to learn more about the products. They make use of compelling video information or content to make online purchasing decisions. According to the e-Tailing Group (2011, p. 5), merchants use social media to do online shopping by viewing advertisements of products that other businesses have posted. The popular websites that merchants use to do online shopping are Facebook, Twitter, You Tube and Google+ among others. They use these platforms of media to communicate with their suppliers regularly and in a more personal way. Online advertisements are easy to view and understand and merchants use this opportunity to view as many as possible to compare products range and prices before they chose their final supplier. They provide their suppliers with comments of their online shopping experience. By visiting the secondary stores provided by suppliers in social media, merchants usually have more options that they can use to do online shopping. Rigby (2012, p.7) argue that, online shopping involves merchants making their purchases from online suppliers or businesses who have optimized websites or apps online. Since the merchant is buying from another business, the process is known as business to business online shopping. To do online shopping, merchants must have access of internet to enable them access the social websites. They must also have the knowledge of using social media in the internet and a valid method of payment for the purpose of completing the transaction. Once a purchase has been made online, the merchant can choose a method in which the products will be delivered to them. 3. What are the majority customer types of this new business form? The majority customer types of this new business form include; Adventurous Explorers – these types of customers present a very large opportunity for online shopping. They find online shopping through the social media as fun and do not require special attention by internet providers. They are the found to be opinion leaders for all online things. They are important builders of online community as well as advocacy in online shopping and businesses should nurture and cultivate for these types of shoppers (Friesner, 2014). Shopping Lovers – This type of shoppers enjoy frequent purchasing of products online. They have competence in use of computers and are most likely to continue their shopping habits. They spread the joy of shopping online to other online shoppers and are a representative of a target which is ideal for businesses. Business Users – This type of online shoppers are computer literature and usually use the internet for the purposes of primarily doing business. Online shopping for business users is an area of their interest and contributes greatly to their life professionally. They are typically champions in the online practice. Suspicious Learners – These shoppers have a growth potential in online shopping. They are mostly interested in new methods of doing things and improved computer training as well as guidance will increase their participation in online shopping. The Avid Shopper – This type of shopper is available on daily basis to bid and buy from their most preferred businesses and stores online (Green, 2013). They have knowledge of sites with the best rates of shipping, the best customer service as well as the best deals. They are savvy online shoppers who are always ahead of online shopping trends. The Deal Hunter – the type of online shoppers are special because their urge to find the deal in online shopping drives their force. They ensure that they have knowledge of every online sale and are subscribed to many online newsletters. They are usually, patient, adventurous and strategic to make their purchase online. The Casual Shopper – These shoppers make their online purchase occasionally after assessing the risks involved. They do research and educate themselves before making their purchases online. They are smart shoppers aimed at saving their money for a rainy day. Window Shoppers – are usually online shoppers who first take a stunning look at products that are cultivated, places that are beautiful and people who are gorgeous (Datta, 2012). 4. What kind of technologies or marketing methods can be applied in assisting the development of social media online shopping? The various marketing methods or technologies that can be applied in assisting the development of social media online shopping include; Virtual Mannequins – merchant trigger virtual mannequins and removes hangers from the rail to view models of their chosen garments (Charlton, 2014). American Apparel – the use of American Apparel enables merchants to view reviews of products, watch videos and make orders online. NFC-Compatible Supermarket – NFC enabled labels that are shelf edge can be used by merchants to access products and their prices, and then scan to add items in their basket through their mobile phones. After the shopping is done, payment is done by tapping on the reader in their mobile phone which is attached to the cash register. M & S Browse and Order Hubs – the use of hubs enable merchants to explore information about the products by browsing the catalogue or scanning barcodes on selected items. They are devises with a touch screen and come with a machine for card payment. M & S Virtual Rail – this method makes use of an in store technology which uses a browser and order hub with a singing and dancing description. The floor of the rail has a head with a screen which is touch screen and a merchant can swipe via the catalogue to look for outfits. Videos that play on the rail have a capability of recommending items that match the ones the merchant have selected. Macy’s and iBeacons – this technology enables merchants to use a Shopkick app which is installed in their phones to enter the online store. The Shopkick app alerts the merchant about the deals as well as items that they are interested in. 5. What limit the development of social media on online shopping? How can we overcome it? Privacy Rights Clearinghouse (2014) argues that, there exists anonymity in social networks that limit the development of social media on online shopping. Many of the social media users are found to mask their real identities. They do this through providing anonymous names or no name at all. Online shoppers through the social media must be aware of anonymity that can be used to abuse individuals who shelter their identities to engage in illegal actions. Users who engage in social media without revealing their own identity use false names and email addresses. This poses threat to merchants who may become victims of the anonymous online businesses. Merchants are advised to delete any cookies that they have visited after accessing any networking social site. There have been reports of fraud in social media and networks that expose merchants to potential victims. There are frauds such as identity theft, where businesses can use personal information to identify themselves as other businesses for financial gains. This has affected the development of online shopping through the social media since it is easy to predict the social security number with the use of information which is gleaned from online databases as well as social networks (McKinsey & Company, 2012). Identity thieves target information like passwords, bank account information, credit card numbers, contacts and social security numbers. To avoid identity theft in social media, merchants doing business online should watch for applications of third parties that are illegal and connections that are false. Other fraudulent incidences in social media that affect the development of online shopping by merchants include; malicious software, social engineering scams. To overcome these problems, businesses should stay safe when shopping online through social media by creating passwords with hacker resistant’s. To encourage the development of online shopping through the social media, merchants should familiarise themselves with the privacy settings that are available in social networks. For example, when using Facebook to do online shopping, merchants should set their default privacy to be viewed by friends only or customise the configuration settings for the purpose of achieving maximum privacy. Businesses should ensure that personal information is not shared in social media and be aware of any privacy policy changes that are made in social networks. It is also important to take caution when clicking on shortened links when shopping online. Safeguards that are adequate should be used when surveilling, profiling and targeting accessibility of data (Oboler, Welsh & Cruz, 2012). 6. What prediction can be made about the ongoing development of social media online shopping? According to The University of North Carolina (2014), the increase in social media anonymity is expanding the scope of content which is user generated in social media. The continued growth of online shopping through social media is expected to revolutionalise change on the interaction and communication among people. Online shopping using Twitted is expected to grow bigger than Facebook. The reason is that, twitter was fashioned for a world which is mobile centric and many users of social media desire for becoming part of the mobile phenomenon. This will increase online shoppers using Twitter as a preferred social media. Since Facebook was formed as a huge company website, it will find it difficult to adjust in the mobile phenomenon. Twitter focuses on providing merchants with useful business information. Therefore, merchants will prefer using Twitter for online shopping. Adiksta (2014) argue that, many new merchants will embrace to do online shopping through social media. The reason is that, the change in e-commerce strategies use in social media provides businesses with many attractive product varieties online. Considering that, one person out of every four people have access of social media, it will continue to be the most preferred trend in online shopping by merchants. Complete the following sentence: 
 The reader of the of this report will have a clear understanding of what is social media and how it assist online shopping, as a new kind of E-business form, understanding its history and lamination is important for developing it. This report gives a clear evaluation of the current social media online shopping as well as provides some recommendations. Why do you think this topic/project is relevant? Social media is technology in some way, studying how it works especially in assisting business to do online shopping and an understanding of what is the technology, and how to implement and perfect it. Dishman (2013) describe that, the use of social media has impacted the lives of merchants who do the shopping online. Social media has highly been used to create awareness that is available for merchants to purchase only. it serves more of awareness that directs sales. This report is relevant because merchants are getting smarter each day with matters that relate to social media channels for the purpose of doing business online. References Adiksta, S, (2014) Shopit4me – Online retail trends & prediction for 2014, Retrieved from http://shopit4me.wordpress.com/2014/08/26/shopit4me-online-retail-trends-prediction-for-2014/ Datta, A, (2012), Here Are the Four Kinds of Online Shoppers, And How to Attract Them to Your Store, Business Insider, Retrieved from http://www.businessinsider.com/here-are-the-four-kinds-of-online-shoppers-and-how-to-attract-them-to-your-store-2012-7 Dishman, L, (2013) Three Important Retail Trends for 2013, Retrieved from http://www.forbes.com/sites/lydiadishman/2012/12/17/three-important-retail-trends-for-2013/ The e-Marketer report, (2014), Retailers Use Social to Spur Shopping, Research, Social commerce lives on—but not the way it was once expected to, Retrieved from http://www.emarketer.com/Article/Retailers-Use-Social-Spur-Shopping-Research/1010595 The e-Tailing Group, (2011), Consumer Research Dynamics, Mobile and User - Generated Content, The 2011 Social Shopping Study, Power Reviews, Retrieved from http://www.powerreviews.com/assets/download/Social_Shopping_2011_Brief1.pdf Friesner , T, (2014), Consumer Behavior, Situational influences and the 8 Traits of Online Shoppers, Retrieved from http://www.marketingteacher.com/consumer-behavior-8-types-of-online-shoppers/ Green, D, (2013), The Five Types of Online Shoppers, Retrieved from http://www.huffingtonpost.ca/drew-green/online-shopping-canada_b_2742950.html Guo, S., Wang, M & Leskovec, J, (2011), The Role of Social Networks in Online Shopping: Information Passing, Price of Trust, and Consumer Choice, Vol. 11, pp. 5-10, San Jose, California, USA. King, C, (2013) 21 Social Media Predictions for 2013 from the Pros, Retrieved from http://www.socialmediaexaminer.com/social-media-predictions-2013/ McKinsey & Company, (2012), Demystifying Social Media, Insights and Publications, Retrieved from http://www.mckinsey.com/insights/marketing_sales/demystifying_social_media Staff, I, (2010), The History of Online Shopping in Nutshell, Retrieved from http://www.instantshift.com/2010/03/26/the-history-of-online-shopping-in-nutshell/ Oboler, A., Welsh, K & Cruz, L, (2012) The Danger of Bid Data: Social Media as Computational Social Science. Peer Reviewed Journal on the Internet. Retrieved from http://firstmonday.org/ojs/index.php/fm/article/view/3993/3269 Price Waterhouse Coopers, (2011), Understanding how US online shoppers are reshaping the retail experience, pp.3-16. Retrieved from http://www.pwc.com/en_us/us/retail-consumer/publications/assets/pwc-us-multichannel-shopping-survey.pdf Rigby, D, (2012), The Future of Shopping, Harvard Business Review, Retrieved from http://www.cormolenaar.nl/wp-content/uploads/2012/02/The-Future-of-Shopping-Harvard-Business-Review1.pdf Vend University, (2013), Retail Trends and Predictions 2014, Retrieved from http://www.vendhq.com/retail-trends-and-predictions ULTRACART, (2014), Social eCommerce Strategies: Turning "Likes" Into An eCommerce Livelyhood, Retreived from http://www.ultracart.com/resources/articles/social-ecommerce-marketing/ The University of North Carolina. (2014). 14 Social Media Predictions for 2014, Retrieved from http://coding2day.com/14for14.pdf?utm_source=site&utm_medium=cover&utm_campaign=14for14 Read More