Social computing in business, or social commerce, refers to the delivery of electronic commerce activities and transactions through social computing.

Social commerce also supports social interactions and user contributions, allowing customers to participate actively in the marketing and selling of products and services in online marketplaces and communities.

With social commerce, individuals can collaborate online, obtain advice from trusted individuals, and find and purchase goods and services. Below we list a few examples of social commerce:

• Disney allows people to book tickets on Facebook without leaving the social network.
• PepsiCo gives a live notification when its customers are close to physical stores (grocery, restaurants, gas stations) that sell Pepsi products. The company then uses Foursquare to send them coupons and discount information.
• Mountain Dew attracts video game lovers and sports enthusiasts via Dewmocracy contests. The company also encourages the most dedicated community members to contribute ideas on company products.
• Levi’s advertises on Facebook by enabling consumers to populate a “shopping cart” based on what their friends think they would like.
• Wendy’s uses Facebook and Twitter to award dollar 50 gift cards to people who submit the funniest and quirkiest responses to various challenges.

Social commerce offers numerous benefits to both customers and vendors

Benefits to Customers

• Better and faster vendor responses to complaints, because customers can air their complaints in public (on Twitter, Facebook, and YouTube)
• Customers can assist other customers (e.g., in online forums)
• Customers’ expectations can be met more fully and quickly
• Customers can easily search, link, chat, and buy while staying on a social network’s page

Benefits to Businesses

• Can test new products and ideas quickly and inexpensively
• Learn a lot about their customers
• Identify problems quickly and alleviate customer anger
• Learn about customers’ experiences via rapid feedback
• Increase sales when customers discuss products positively on social networking site
• Create better marketing campaigns and brand awareness
• Use low-cost user-generated content, for example, in marketing campaigns
• Get free advertising through viral marketing
• Identify influential brand advocates and reward them

Despite all of its benefits, social computing does involve risks. It is problematic, for example, to advertise a product, brand, or company on social computing Web sites where content is user generated and is not edited or filtered. Companies that employ this strategy must be willing to accept negative reviews and feedback. Of course, negative feedback can be some of the most valuable information that a company receives, if it utilizes this information properly.

Risks of social computing include the following:

• Information security concerns
• Invasion of privacy
• Violation of intellectual property and copyright
• Employees’ reluctance to participate
• Data leakage of personal information or corporate strategic information
• Poor or biased quality of users’ generated content
• Cyberbullying/cyberstalking and employee harassment