Navigating the pitfalls of Social Commerce
Social commerce is revolutionising the e-commerce landscape by merging social media, online shopping and growing influencer culture. Andy Haylar, Global e-Commerce and Technology Director at Air Business, discusses the unique challenges and responsibilities global e-commerce logistics companies face in this dynamic market.
“Social commerce is prevalent with paradoxical traits. On one side, it offers unprecedented opportunities for engagement and sales. On the other, it presents significant risks that can negatively impact a company’s reputation and operational efficiency.
This article explores the dangers and pitfalls of social commerce and how logistics companies can navigate them responsibly.
- Data limitation, privacy, and security risks
Whilst my technology teams see me as a data-driven obsessed dictator demanding KPIs and data-driven decisions, outside of my technology responsibilities, I contradict this approach. I believe you should not build your business initiatives on data alone. Data is essentially from the past and does not account for human unpredictability and emotion. Innovations and disruptive products that gain mass adoption happen not by focusing on the ‘average’ but by focusing on the extreme or minority.
If we rely on the same average data set as everyone else, we’re just blending in with the crowd. Stand out, by leveraging the human touch and applying lateral thinking to uncover unique insights that sets us apart from our competitors.
The other side of data (particularly in social commerce) is the potentially business-ending kind if we get it very wrong.
Consumer data vulnerability: Social commerce platforms collect vast amounts of consumer data, which can be vulnerable to breaches and misuse. Logistics companies must implement robust data protection measures to safeguard this information and maintain consumer trust. A notable example is the Target data breach in 2013. Hackers stole credit and debit card information from 40 million customers and personal details of 70 million customers.
Regulatory compliance: Navigating complex data privacy regulations, such as GDPR and CCPA, is essential. Logistics companies must ensure compliance to avoid legal repercussions and protect consumer data. Let’s not forget the eye-watering penalties imposed by the UK authority (ICO), whereby under GDPR, the ICO can issue fines up to £17.5 million or 4% of the total annual worldwide turnover, whichever is higher, for serious breaches.
This has been a particular challenge for us at Air Business given our multi-territory presence, resulting in differing data protection laws. We have managed to mitigate this by ensuring our proprietary global software employs state-of-the-art data security measures to protect consumer information and ensure compliance with data privacy regulations. Additionally, we conduct self-auditing and provide in-depth training for all staff and champions.
- Dependence on social media platforms
Whilst the title immediately reminds me of my continually ignored rhetoric to my children, there is also a growing trend of reliance from small to medium businesses on social media platforms for sales. Over-reliance can lead to a loss of control over customer interactions and data and profit. Algorithms are continuously (and mysteriously) learning and changing which will affect how your business reaches its audiences and manages sales.
A recent relevant case involves the European Commission fining Meta (Facebook’s parent company) €797.12 million ($842 million) for violating antitrust regulations. The EC found that by tying Facebook Marketplace to Facebook and imposing unfair trading conditions on other online classified ads service providers, this case underscores the risks of putting all your ‘eggs in one social media basket’.
Logistics & Retail companies would be wise to diversify their sales channels across a variety of mediums to mitigate this risk and maintain a broader reach. Whilst social commerce has a large young potential customer base, confining yourself to social media platforms potentially excludes customers who prefer traditional e-commerce channels. Logistics companies must balance their strategies to cater to all customer preferences.
Often, Air Business has partnered with SMEs and the less digitally evolved to not only manage their end-to-end logistics but also to enable to sell across all sales channels as we love to support up and coming businesses.
- Navigating Negative Feedback: Protecting Your Brand in Multi-Carrier Logistics
Negative reviews and feedback are highly visible on social media including sites like google and Trustpilot which can quickly damage a brand’s reputation and retention of c. Logistics companies must have effective strategies for managing and responding to negative feedback, particularly if you are a logistics company that ‘white labels’ carriers and conveyance partners and does not have direct control over the operation.
My mitigation to this is simple. I am a strong believer that it is not enough to offer just white label carrier services. It is critical to ensure excellence through performance metrics. We achieve this at Air Business through our proactive data control tower. In addition, we only partner with top-tier carriers who share our values and commitment to quality. This isn’t the easy route—it’s tempting to cut costs by choosing cheaper partners. But we believe in investing in relationships that guarantee superior service. It’s a long game, but one that pays off in reliability and customer satisfaction. After all, in logistics (as in life), you get what you pay for.
We have all seen social media’s viral nature (a certain delivery driver throwing a computer monitor over a fence does spring to mind) meaning that any misstep can spread rapidly, leading to widespread backlash. Logistics companies must be proactive in their communication and crisis management and have a continuity plan in place and an existing relationship with the review forum to manage the reviews mistakenly associated with your company.
- Managing Logistics and Fulfilment Challenges During High-Volume Social Media Campaigns
Remember the Call of Duty Modern Warfare game release of 2019 where major carriers wished they had a ‘respawn’ capability? Handling the logistics of social commerce can of course be challenging, especially during peak times or viral campaigns like Black Friday. Logistics companies should ensure their operations can scale to meet demand. However, it’s also critical to uphold the promise of delivering your agreed service. Establishing quotas and managing large volumes from high-demand clients (we all know who), such as those driven by popular online marketplaces, is crucial to ensure that our bread-and-butter customer base – which sustains us all year round – remains unaffected.
Moreover, the high return rates associated with impulse buying on social platforms can strain logistics and fulfilment operations. Companies must be prepared to handle the increased volume of returns efficiently, which can be resource-intensive and costly. The challenge lies in balancing the benefits of social commerce with the need to maintain robust operational processes and safeguard your brand’s reputation and margins.
The rise of circular logistics adds another layer of complexity. Efficiently managing returns, refurbishments and recycling requires advanced logistics solutions and can be resource and space intensive. The temptation to shortcut these best practices in the pursuit of high-volume, low-margin traffic must be avoided.
My policy is simple: we do not overcommit and chase the dollar! We stay loyal to our core customers and only onboard new customers if we are 100% confident, we can deliver the best possible service for them. This sometimes means making tough decisions to turn down additional traffic, but it guarantees that we maintain the highest standards of service and efficiency. This approach has paid us back dividends through a long-standing and loyal customer base.
- Our Responsibility in Circular Logistics
Myth or fact? The younger generation (Gen Z, Gen Alpha or Y) on social commerce platforms are ‘sustainability conscious’…. I suspect the majority are not and still opt for cheaper brands delivered on trucks with red diesel. This is understandable in times of a cost-of-living crisis. Regardless of market trends, we have a responsibility to educate, collaborate and provide accessible solutions. Let’s not forget that the younger generation will lay the path to the common norm.
With forthcoming regulations and penalties, logistics companies will be forced to adopt sustainable practices, such as using eco-friendly packaging, optimising delivery routes to reduce carbon emissions, and promoting recycling and reuse. Beyond regulation, there are interesting business opportunities that also send a powerful message about your brand’s commitment to sustainability.
One key opportunity is supporting the circular economy. Social commerce often leads to higher return rates due to impulse buying. By embracing circular logistics, companies can support a circular economy where products are designed for longevity, reuse, and recycling. This approach minimises waste and promotes sustainability and resource efficiency, which is increasingly important to socially conscious consumers. The surge in returns from social commerce requires logistics companies to be more agile and efficient in managing returns, refurbishments, and recycling processes. The responsibility to handle these returns sustainably falls on logistics companies, making it essential to implement advanced technologies and robust systems to manage the flow of goods in a circular economy.
Logistics companies and retailers should educate consumers about the benefits of circular logistics and encourage sustainable shopping habits. Offering a green lane service and information on returning products for refurbishment or recycling can enhance consumer participation in sustainability efforts, especially in social commerce where engagement is high. Additionally, helping retailers join the circular economy by providing tools and support to implement sustainable practices can further drive this initiative. By integrating these efforts, both consumers and retailers can contribute to a more sustainable future. Data BI on sustainability impact, such as CO2 calculations, achieved through tracking from the carrier or a pre-calculated impact, is becoming a prerequisite but can also be a lucrative value add for logistics companies. It can help retailers meet their sustainability mission statement.
To conclude, in the coming year, I am passionate about solidifying our presence in circular logistics. We utilise advanced technologies to manage the complete end-to-end view of the sustainability ecosystem, returns and promote recycling. Additionally, we aim to empower individuals to facilitate refurbishment and quality control in their own homes, achieving ‘return to sale status’ without relying on expensive facilities and services. This commitment not only reduces waste but also enhances sustainability and customer satisfaction
About Andy
Andy Haylar is the Global e-Commerce and Technology Director at Air Business. With over 20 years of experience in technology and business leadership roles across various industries – postal, logistics, parcels, security, engineering, and technology – Andy is passionate about driving business growth through IT innovation and strategic initiatives. His ability to bridge the gap between technology and business provides him with a holistic view.
Before joining Air Business, Andy held senior positions where he led efforts to build a global 4PL network. He is dedicated to leveraging technology and strategic partnerships to enhance competitive positioning and operational efficiency, delivering industry-disruptive offerings.
