26 July 2015
“If social commerce really took off, and retailers failed to respond, it could be a threat in terms of sales, profit and the customer relationship,” Dan Goldman, retail and private equity strategist at Kurt Salmon, shares with The Financial Times when discussing the influence social networks have on retailers. Social networks’ ability to serve shoppers at the moment they realize they need a new outfit could pose a new challenge for traditional retailers, he says, as these retailers already face competition from Amazon, online shopping club Jet and China’s Alibaba. But this could be exacerbated by the likes of Facebook, Pinterest and Instagram taking a larger role as a retail medium. Depending on how they structure their social commerce models, this could eat into not only retailers’ sales, but also their profits—unless they figure out how to use social media to deepen their own connection with customers, Goldman concludes.