Years ago when I realized I could do my Christmas shopping online, without stepping into a busy, crowded mall, I knew e-commerce and I had established a long-lasting relationship.

It seems many feel the same way because e-commerce growth is steady. According to comScore, consumers spent $66.9 billion online in the first half of 2010, a 9.4% jump over the first half of 2009, and Forrester Research projects that US online retail will grow to $335 billion by 2012.

Today, social commerce services and tools - such as mobile applications, geo-location shopping, QR codes, social (barcode) tagging, social gaming and social couponing - are driving e-commerce beyond isolated online transactions to become a way for consumers to share brand experiences through all stages of the purchase cycle.

Is Onsite Social Commerce the Best Approach?

In a recent article, TheEconomist.com discusses how social commerce is disrupting the traditional e-commerce model. Disruptive – sure, and retailers ready for it can benefit.

TheEconomist.com references Swipley, a web service that enables participating consumers to publish their online and real world credit card and debit purchases to the site for their contacts to see. Many of these “swipes” are geo-located automatically to specific store locations, and Swipely positions its value to retailers as a way to turn “purchase at your business into conversations among customers and their friends.”

Visa’s Rightcliq community, which we’ve discussed in a previous post, offers a similar kind of service to consumers but is targeted for the sharing of online purchases.

Then there are social commerce sites like Groupon which offers flash sales to consumers. These daily discounts are localized to businesses within a given city with the purpose of driving consumers to those real-world venues. The more people buy the deal the greater the chance that deal will stick, which is the motivator for people to share the deal with their online contacts.

While these services are innovative and offer consumers a way to share buying decisions and obtain exclusive discounts and deals, they are still experimental. Implementing social efforts through these offsite services and translating them into ROI such as direct sales can be difficult to measure. Even with Groupon, where there is a direct link between the flash sale and increase in revenues, there is a risk that not enough consumers will be interested in purchasing the discount.

For some retailers, the best social commerce approach is to invest in onsite initiatives. Last month, Shop.org and Forrester Research released a study on The State of Retailing Online in 2010 in reporting that,

“The most effective social tools continue to be those that are actually peer-to-peer features implemented on a retailer’s own site and that enable merchandisers to scale content effectively.”

The report explains that these tools support user-generated content in the form of ratings and reviews, social recommendations, ask and answer, videos, co-shopping and browsing tools, etc. The benefit of implementing onsite social commerce is that retailers can use the content these tools generate to understand the buying trends and preferences of consumers.

Retailers can then take this market research to tailor shopping experiences – both online and in store – to meet those needs.

Use Offsite Social Commerce Strategically

While onsite social commerce tactics may offer an effective way to redesign the shopping experience based on direct feedback from, and interactions with and between customers, engagement efforts through Twitter and Facebook can also be worthwhile.

These sites offer retailers the ability to gain deeper understanding into customer purchasing preferences, create brand excitement, with the aim to motivate customers to click to purchase, and to extend brand reach.

In March, eMarketer reported on a study by Chadwick Martin Bailey and iModerate indicating more than 50% of Facebook fans and 67% of Twitter users reported that they are more likely to make a purchase for the brands they follow on these social media sites. According to this study,

“The top reason to friend a brand on Facebook was to receive discounts, followed by simply being a customer of the company and a desire to show others that they support the brand. On Twitter, discounts, up-to-the-minute information and exclusive content were the main draws; only 2% of respondents followed brands on Twitter to show their support.”

ModCloth is an e-commerce retailer using Twitter strategically to engage its customers. With catchy titles such as “FundayMonday” and “I Spy”, ModCloth invites its followers to participate in weekly online trivia and scavenger hunt games for a chance to win featured merchandise. ModCloth also gives its customers a voice through its “Be the Buyer” page where consumers are invited to vote “Pick It!” or “Skip It!” on potential new products for the e-store.

The above are just a few examples of how retailers can use social commerce to deliver offers – such as exclusive discounts and promotions – to nurture the brand relationship, increase loyalty and drive new revenue opportunities.

However, at its foundation your social commerce strategy should be focused on enabling consumers to connect with one another, while giving you the ability to listen to, and participate when appropriate, in those conversations.

Remember, brands must earn customer attention. Be selective in your approach; understand how and where your customers use social media to share brand experiences, and then implement social commerce tactics that support those activities. In this way social commerce becomes a strategy for enhancing the online and in store shopping experience for your customers.