Report: Future of e-commerce is social commerce

New York City The future of e-commerce is "social commerce" as online shoppers, particularly younger generations, are heavily influenced by social media and Web 2.0 technologies, according to a new "Future of Commerce" report from Hill & Knowlton.

"Online retailing is being profoundly impacted by the integration of social media into what historically has been a transactional experience," said Joshua Reynolds, worldwide technology practice director, Hill & Knowlton and co-author of the report.

In the study, 83% of respondents cited "personal prior experience" as having the greatest impact on where they choose to shop online. Trailing behind experience were the following sources: "family member" (48%); "friend" (44%); and "an online offer or ad from the online store itself" (43%).

The report also found that traditional, offline media remains the most effective vehicle for reaching mass audiences: Nineteen percent of all survey respondents were influenced by an "article in a newspaper or magazine" and 12% by "radio or broadcast TV program."

"The most effective way to reach consumers online is with highly-targeted campaigns tailored to engage micro communities that form around common interests," said Julie Mathis, VP consumer technology, Hill & Knowlton. "One-size-fits-all marketing is not a viable communications approach in today's PR 2.0 world."

The economy is having a heavy impact on consumer online shopping habits according to the report. When asked how consumers have changed their everyday item purchases since the economy has receded, 46% said they shop less overall, whether online or offline. The older the consumer, the less likely they are to shop overall.

Fifty percent of respondents said they are shopping online more to look for better bargains. And, Gen X and Y are more likely than baby boomers to shop online for better bargains in a down economy.

The report was based on a survey of more than 600 American adults conducted by Penn Schoen Berland and Associates and supplemented with research conducted by Hill & Knowlton.