Social Media Effects on Australian E-Commerce Essay Example

such as friendliness, informativeness, usefulness, politeness, and intelligence.

The main idea is that the perceived sociability of a website is crucial in understanding and predicting user behavior in online commerce (Dunt & Harper 2002). Users compare the presence of social media on e-commerce websites to having digital representatives. E-commerce websites that incorporate social cues effectively streamline business operations by reducing ambiguity and fostering lasting relationships with customers, suppliers, and partners. It is evident that websites with social cues elicit a social response from users, resulting in a high level of enjoyment as users find these cues enjoyable, adventurous, and exciting (Wakefield et al. 2011).

There is a strong relationship between a positive website experience and a greater intention to use the site, leading to a deeper connection with online retailers. This connection provides an opportunity for online retailers to establish a sustainable competitive advantage. According to Wakefield et al (2011), it is essential for electronic retailers to consider the social aspects of the internet in order to enhance consumer attention and increase purchases.

Social Media Breaks Down Personal Interaction Barriers

The current software and hardware used for personal interactions on online retail sites focus on groups of online shoppers rather than individuals. This lack of personalized communication is overcome by the inclusion of social media on these websites (Town 1999). Regardless of shopping motivation, shopping behavior does not always result in a pleasant experience or lead to purchases.

According to Fennech & O'Cass (2001), web retailing sites that lack social aspects in their design are typical in their characteristic. The authors argue that incorporating social media in web retailing sites enhances customer retail satisfaction on an individual level. This is

because the choice of shopping environment is influenced by an individual's shopping orientation, which in turn affects their overall retail satisfaction. Fennech & O'Cass (2001) conducted a study to investigate the factors that influence internet users' adoption of web retailing and their perception of product types purchased online. The study revealed that attitude towards electronic retailing and perceived usefulness play a crucial role in influencing the adoption of web retailing.

According to the study, having a positive attitude leads to a higher adoption of web retailing, while having a negative attitude leads to a lower utilization of web retailing frameworks. Fennech & O'Cass (2001) state that the lack of personal communication and interaction is the main factor that distinguishes between positive and negative attitudes. This means that web retailing sites without personal communication tools tend to have low levels of customer retail satisfaction. It is clear that social media plays an important role in removing barriers to personal interaction on web retailing sites, which in turn improves user satisfaction. Additionally, social media also helps build trust in web retailing among internet users, as they rely on interpersonal influence from sources like peer groups when making decisions (Adapa 2011).

The observation indicates that incorporating social media in e-commerce can eliminate barriers to personal interaction and communication, leading to increased utilization of electronic commerce by Australian internet users. To build trust with potential online shoppers, online retailers can integrate social media into their retailing sites. Social media has the potential to attract more web shoppers, generate repeat purchases, and foster positive attitudes towards online retailing in Australia. Fennech and O'Cass (2001) argue that social media drives the adoption of

web retailing and removes potential barriers associated with its use. Thus, online retailers can utilize social media to establish and expand their market share in the online environment, as it enhances online visibility effectively. Social media provides a new retailing opportunity that online marketers can utilize to influence attitudes and improve the usefulness of their retailing sites (Stephens 2010).

Social Media and Electronic Word-of-mouth (eWOM)

According to Lee & Youn (2009), interpersonal communication between consumers about products and commodities is known as word-of-mouth. Lee & Youn (2009) claims that word-of-mouth is the most influential source of information for consumers because they trust their peers more than advertisers and marketers do (Sia et al. 2009). This type of communication is considered credible and trustworthy by consumers, regardless of marketers' intentions.

Consumers' choices and purchasing behaviors are greatly influenced by various eWOM platforms, including product review websites, brands' websites, personal blogs, and social networking sites. The internet has seen a rise in the influential power of word-of-mouth in consumer decision-making, as consistently confirmed by research. These platforms offer consumers convenient access to product information and have been proven to play a crucial role in shaping their purchase decisions, as evidenced by Lee & Youn's (2010) study.

The emergence of blog sites and social networking platforms has significantly impacted brands and their marketing strategies. It is now clear that consumers are using social networking sites like Facebook and Google+ to gather information about products and brands. These platforms have a wide reach, attracting many internet users. The influence of social media can be observed in three main aspects: product ratings and reviews, the sharing of customer experiences,

and the facilitation of continuous innovation (Rafaeli & Raban 2005). Social media platforms, including discussion boards and other online communication channels, are where most electronic word-of-mouth occurs.

Research has indicated that eWOM significantly affects the adoption and use of goods and services, thus impacting consumer behavior in online retail. This highlights the importance of eWOM as a crucial component of the marketing mix, influencing purchasing decisions made by web consumers (George 2002).

The key argument is that social media, particularly through eWOM, plays a vital role in establishing a computer-mediated environment where consumers' buying choices are influenced by their perception of information quality. When consumers receive information that aligns with their needs and requirements, they are more inclined to evaluate the product or service's value based on their personal criteria for making purchase decisions (Dunt & Harper 2002).

To determine customers' perception of information quality and assess their potential purchasing behavior, online marketers can utilize social media to manipulate variables like timeliness, accuracy, relevance, and comprehensiveness (Dholakia ; Chiang 2003). The impact of information usefulness on consumer decisions is influenced by the credibility and quality of the information. As a result, online consumer forums have become increasingly important as they provide information from peer consumers without marketer biases (Chang ; Sturt 2004). The comprehensiveness of information gathered from online communities contributes to the widespread influence of social media on electronic commerce.

According to Lee ; Youn (2011), the rise of social media has brought about significant changes in how product reviews and ratings are done. In the past, only publishers like Consumer Reports and CNET magazines were responsible for providing these reviews and ratings (Andrews et al. 2007). However,

there has been a shift in recent times where social media users actively participate in reviewing and rating products. It is important to highlight that product ratings and reviews on retailers' websites are not stored on social media platforms.

According to Andrews et al. (2007), social media has a second impact which is the exposure of consumer experiences. On social media platforms, consumer experiences play a crucial role in driving brand conversations, thereby affecting the reputations of retailers associated with the brand. The marketing of brands is significantly influenced by social media and blogs.

Social media offers a way for mass-market advertising on the internet (Chang ; Sturt 2004). A successful marketing approach not only includes mass marketing, but also involves communicating with customers through social media platforms like Facebook, Twitter, and other blogging platforms. This is done by creating engaging content that encourages social media users to interact with both retailers and each other (Dholakia ; Chiang 2003). The rise of electronic word-of-mouth (eWOM) has significant implications for marketing strategies. Online marketing now heavily relies on social influence, while traditional marketing is becoming less effective. Australian marketers must acknowledge that they have no control over their online brands. People will discuss brands without involving the marketers, who have no influence over negative comments circulating on different social media platforms (Chang ; Sturt 2004).

A strategy is being used by Australian marketers to increase the likelihood of positive conversations about a product. To effectively market products in the age of social commerce, it is essential to employ smart techniques that boost the distribution of favorable comments about a brand or product. As the internet becomes more social, online

stores in Australia must include social media integration into their e-commerce websites to promote member engagement and make product discovery easier (Andrews et al. 2007).

Social Commerce

Social commerce involves integrating social media platforms into electronic commerce with the aim of enhancing online buying and selling.

Social commerce merges electronic commerce and social media, two prominent digital trends. Web-based communities and effective online communication are essential for electronic commerce, as they significantly affect visibility and sales. Furthermore, this form of communication has the potential to revolutionize corporate advertising, community sponsorship strategies, and overall business models. Social media is widely acknowledged as the most influential tool for online communication. In today's digital economy, establishing an online store and passively waiting for customers is insufficient for online retail businesses. Instead, they must actively engage consumers, cultivate relationships, and construct virtual communities (Chang ; Sturt 2004).

Social commerce is distinguished from conventional e-commerce by its integration of social elements into the online business model. Social commerce encompasses various features such as consumer ratings and reviews, referrals, social shopping platforms, user recommendations, and online communities. These social components are essential in establishing a trustworthy environment where individuals create content related to the referral and sale of products using customer feedback, reviews, ratings, and testimonials (Cheung et al., 2008). The main drivers of social commerce consist of electronic business opportunities, online communities, and the advancements in internet technologies like web 2.0. Key characteristics of social commerce include the aggregation of collective intelligence, viral marketing, market disruption, and a platform for active participation.

Gathering collective intelligence is crucial for social commerce websites to gain a competitive edge, as the number of retailers and consumers plays a

significant role (Andrews et al. 2007). The key to achieving dominance in the online market lies in the network effects resulting from user contributions. When it comes to viral marketing, word-of-mouth plays a vital role in the success of social commerce, as satisfied customers promote products based on their positive experiences. Therefore, branded communities can foster strong and lasting relationships with their customers. Most social commerce websites operate as inclusive networks where democratic participation allows individuals to create what others desire on an equal platform.

Social commerce websites, such as Facebook, integrate various social media tools like photo sharing and blogging to allow users to express their opinions and preferences. These sites also serve as a central communication hub for social networks. Companies can create online fan communities to promote their products and services by connecting with groups of friends, providing a platform for brand building. Social commerce is effective in establishing networks of passionate individuals who support a particular brand, enabling the brand's message to reach online communities (Cheung et al., 2008).

Online fan base and communities are becoming the new method of mainstream advertising. Viral marketing is a significant attribute of social commerce that businesses can use to increase brand awareness in a cost-effective manner. When people purchase a product, they often share their experience with others, making it necessary for companies to change their communication strategies. Social media empowers consumers to control their brands (Haque et al., 2009).

The combination of electronic commerce and social media results in widespread and robust business models. E-commerce depends on the online interaction and connections with other websites. These comprehensive business models appeal to and maintain website users by

offering free user accounts and access to the websites. Additionally, knowledge systems that enable feedback play a role in enhancing the efficacy of the social commerce business model. Apart from generating direct sales, social media also has various other effects such as enhancing brand visibility, obtaining marketing insights, and enhancing customer loyalty.

Social media plays a crucial role in boosting brand visibility through continuous conversation between the brand and its consumers. It facilitates social interaction, allowing consumers to familiarize themselves with and develop trust in the brand. This active engagement with online friends and fans ultimately leads to heightened brand awareness. Moreover, social media fosters customer loyalty by creating a sense of community around the brand. To strengthen brand loyalty through social media, businesses should prioritize the process of community building. Additionally, social media offers opportunities for gaining valuable marketing insights by providing a platform for consumers to express their thoughts about the brand.

Therefore, marketers can understand consumers' thoughts and behaviors through social media (Chang ; Sturt 2004).

Social Media Generates Value and Satisfaction in the Electronic Marketplace

Nezamabad (2011) argues that consumers evaluate value based on how they can use available resources to fulfill their needs and desires. Essentially, value relates to the advantages customers receive in relation to the time, money, and effort they invest. Value greatly influences consumers' consumption patterns, pricing, profitability, and other strategic choices made by businesses.

Value is crucial in building sustainable competitive advantage. Social media in e-commerce contributes to creating value for customers in various ways. Firstly, customers receive personalized treatment, as businesses can offer products at the right prices. Moreover, social media presents numerous opportunities for enterprises to engage with their

customers. By utilizing social media, businesses can enhance economic utility and thus improve customer satisfaction among online shoppers (Andrews et al.).

In 2007, social media began offering a valuable utility to customers by providing information about products at any time and place. This has led to increased expectations among customers due to the interaction and communication between customers, suppliers, and businesses. Social commerce is currently being used by businesses in Australia to create high value and customer satisfaction. This is because the Australian society heavily relies on social media for advice on online transactions from friends.

Enterprises must prioritize and effectively utilize social mediums in order to take advantage of the trend of friends aiding in online purchases. Australian companies should constantly update their social network pages and offer valuable news and resources to customers, establishing an active online presence. By adopting these strategies, firms can improve online sales and keep up with emerging trends in electronic commerce (Haque et al.).

2009).

Conclusion

This paper examines the impact of social media on e-commerce in Australia. It explores various effects, such as the widespread influence of social media on Australian e-commerce, the removal of barriers to personal interaction, the role of social media in electronic word-of-mouth (eWOM), social commerce, and the generation of value and satisfaction in the online marketplace.

Annotated Bibliography

Adapa, Sujana.

"Adoption of Internet Shopping: Cultural Considerations in Australia and India." Journal of Internet Banking and Commerce 13. 2 (2008): 1-16.
Adapa (2008) conducted a study on the web shopping habits of Indian women living in India and Australia. Adapa emphasizes the significance for e-commerce businesses to consider the cultural and social context when developing their business models. Thus, marketers should possess

a comprehension of consumers prior to creating effective online marketing strategies.

Online retail outlets must take a proactive approach to engage consumers, establish relationships, and create online communities. The distinction between social commerce and traditional e-commerce lies in the incorporation of social elements into the online business model. Social commerce includes features like consumer ratings and reviews, referrals, social shopping platforms, user recommendations, and online communities. This source offers valuable insights into the significance of integrating social media into marketing strategies.

In their study titled "Factors Determinate Customer Shopping Behaviour Through Internet: the Malaysian Case," Haque, Ahasanul, Ali Khatibi, and Shameem Al Mahmud (2009) examined the factors influencing online customers' shopping behavior. The article focused on how internet marketing affects consumer behaviors and highlighted the impact of the social media era on product reviews and ratings. It was found that product reviews and ratings were previously limited to publishers.

The text discusses the current paradigm shift in which social media users are actively reviewing and rating products. It highlights the significance of an article that analyzes effective online strategies for Australian businesses to increase their online market share and build customer loyalty through integrating social media into e-commerce websites. The article, authored by Andrews, Lynda et al in 2007, explores how experiential consumption values influence online purchases.

The text examines how gender influences the way people perceive and prioritize social and functional values when making online purchases. It was found that social value affects male buyers differently than female buyers, and functional value affects female buyers differently than male buyers. The article also presents a theoretical framework for understanding how social influence impacts online shopping, which is important for

the overall research paper. The study was conducted by Chang, Joshua, and Charles Sturt, and was published in The Journal of American Academy of Business in 2004 (pp. 171-176).

The article examines the correlation between internet shopper demographics and purchasing behavior. The authors claim that integrating social media into electronic commerce aids in removing obstacles to personal interaction and communication, thus enhancing the adoption of electronic commerce among Australian internet users. Consequently, online retailers can include social media on their retail sites to establish trust with potential internet shoppers. (Cheung, Christy M. K., Matthew K. O.)

Lee and Neil Rabjohn (2008) examine the effects of electronic word-of-mouth (eWOM) in their article "The Impact of Electronic Word-of-Mouth: The Adoption of Online Opinions in Online Customer Communities." They find that eWOM has a significant influence on the adoption and use of products and services, indicating that it affects the consumer behavior of web retailers. The study suggests that eWOM is increasingly becoming an important aspect of the marketing mix as it determines the purchasing decisions made by online consumers. This source provides valuable insights into the effects of eWOM on the effectiveness of online marketing strategies.

The journal article by Dholakia, Ruby Roy, ; Kuan-Pin Chiang (2003) investigates the link between gender stereotypes and online shopping behaviors. The insights provided by this source are crucial for comprehending the societal factors influencing internet shopping.

According to Dunt and Harper (2002), online marketing now relies heavily on social influence, rendering traditional marketing less significant and ineffective. It is crucial for Australian marketers to recognize that they lack control over their online brands. In their study, Dunt and Harper assess the influence of electronic

commerce on the Australian economy.

According to George (2002), the integration of electronic commerce and social media results in pervasive and rigorous business models. The digital economy is growing, indicating that Australian businesses should adopt emerging online marketing strategies, including the utilization of social media. This article offers a comprehensive overview of the impact of electronic commerce on the Australian marketplace and highlights the various factors that influence internet purchases, with social media being emphasized as a significant determinant.

According to Nezamabad (2011), social media refers to web-based applications that enable the creation and exchange of user-generated content. It uses internet and web technologies to transform one-way broadcast media into interactive dialogues. Nezamabad's study emphasizes the significance of integrating social media with e-commerce, leading to the emergence of social commerce. The article by Nezamabad (2011) provides a comprehensive overview of the impact and benefits of the internet on the marketing mix. It highlights that consumers determine value based on their utilization of available resources to satisfy their needs and desires.

According to Nezamabad, Australian business enterprises can create value for consumers by providing commodities at appropriate prices. Social media presents multiple opportunities for businesses to engage with their customers. Through the use of social media, enterprises can enhance the economic utility of their offerings, resulting in increased satisfaction among online shoppers. Currently, businesses are utilizing social commerce to generate high value and customer satisfaction (Lee, Mira, & Seounmi Youn, 2009).

According to Lee & Youn (2009), the internet has made Word-of-Mouth (WOM) increasingly important, with various forms such as product review websites, brands’ websites, personal blogs, and social networking sites. These eWOM platforms have made it easier for

consumers to communicate and share product-related information. In their article, Rafaeli, S., & D. Raban (2005) provide a comprehensive understanding of how social media supports eWOM marketing.

According to the authors, the internet is the new platform for businesses to take advantage of in the retailing industry. The article states that online shoppers prefer and find more information in an interactive online shopping experience. This means that online shoppers are more inclined to buy from a website that includes interactive elements like social cues. This source offers insight into how social media contributes to creating an interactive and informative shopping guide.

Moreover, the utilization of e-commerce in Australia can be increased through social media. According to Sia, Coon Ling, Kai H. Lim, Kwok Leung, Matthew K. O. Lee, M., Wayne Wei Huang, and Izak Benbasat in their article "Web Strategies to Promote Internet Shopping: Is Cultural-Customization needed?" published in MIS Quarterly 33.3 (2009), this can be achieved.

Sia et al (2009) examines the different tactics that online marketers can employ to affect consumers' purchasing decisions. The fundamental features of social commerce encompass collective intelligence gathering, viral marketing, market disruption, and a participatory platform. This source outlines the key qualities of social commerce and the potential opportunities it offers for Australian businesses to exploit. Stephens, Lee.

According to Stephens (2010) in his article "The New Online Retailing Boom" published in B;T Magazine, the internet has become a crucial platform for Australian businesses to leverage. The article highlights that online shoppers prefer an interactive online shopping experience as it provides them with more information. This suggests that websites with interactive elements, such as social cues, are more likely to attract and

convert online shoppers into making a purchase.

The article by Adapa (2011) examines the impact of social media on e-commerce and internet banking in Australia. It sheds light on how social media contributes to creating a interactive and informative shopping guide, while also increasing the utilization of e-commerce. The study highlights the prevalence of internet banking in Australia and identifies the factors that influence its use. It mentions that banks adopt cost-effective marketing strategies to retain online customers and encourage them to engage in online marketing.

Banks extensively utilize time and place as a primary utility, allowing customers to access product information at any time. The use of social media in value creation processes increases customer expectations due to interpersonal interaction and communication between customers, suppliers, and businesses. Fenech, Tino, and Aron O'Cass (2001) conducted a study examining consumer traits influencing internet users' adoption of web retailing and purchase-related behavior. The research emphasized the importance of attitude towards electronic retailing and perceived usefulness in influencing the adoption of web retailing.

The authors demonstrate that social media is essential in removing barriers to personal interaction on web retailing sites, resulting in an increase in...