The Rise of Social Commerce

Social commerce —the fully integrated social shopping experience on digital channels from product discovery and research to check out — is quickly evolving from a buzzword to a relevant subset of electronic commerce. A trend not triggered, but certainly accelerated by the pandemic and stay-at-home orders. But where is this trend coming from, why is it getting relevant around the world, who is shopping on social and what does it all mean for marketing and sales?

Based on these questions, I want to use this article to explore some of the fundamental aspects associated with social commerce:

Social Commerce Definition

social commerce represents a real shift in power from retailers and brands to people. And it's being turbocharged by the rise of social media. In contrast to the relative anonymity of big-box retailers and transactional emphasis of e-commerce behemoths, people choose to spend their time on social commerce thanks to the authenticity and trust that social connections provide. It's nothing short of a people-powered retail revolution that blends social experiences and ecommerce transactions through a single path to purchase, on a single digital platform.

Social Shopping: why has it become a megatrend in 2021?

People have always used social media not only to connect with friends, content creators and celebrities, but also to discover and research new products and services. And with consumers around the globe spending a lot of time at home during these past two years they had ample time for more consumption of content, but also for more consumption of products. And when stores are closed and a stroll through town just doesn't feel like it used to ... what could be more natural than moving the shopping experience to a place where you spend a lot of time anyway?

Statista data?predicts that worldwide social commerce revenue could reach?over $3.4 trillion by 20 28 . But there are already many brands achieving huge success today with social commerce, especially in China where platforms like Taobao, Douyin, and Kuaishou are more advanced and already offer fully integrated check-out solutions. hence it is no surprise that two Chinese live streamers stole all attention on last Novembers Singles Day with their combined $2 billion in 24h of social commerce sales.?

Who is shopping on social media?

Social media can be used by people for a huge number of things such as staying connected with family members or friends that you might have lost touch with, but recently consumers have started to increasingly use social apps for shopping. a recent survey from Bazaarvoice found that 3 out of 4 consumers use social media for shopping . most of them look for inspiration regarding the things that they want to buy, but 61% of consumers surveyed said that they also ended up buying something that they saw in their newsfeeds. Younger generations, in particular, are spending a lot of time on social media and also use their social apps for online shopping. but social commerce is really attractive for anyone using social media, as it offers a frictionless shopping experience without ever leaving the social app.

How are socialmedia platforms enabling social commerce?

Most products are currently purchased on social media via Instagram and Facebook. But the competition is catching up: With TikTok, a big player is pushing ever harder into the social shopping sphere. Pinterest, Twitch and YouTube are also getting in on the act. So lets look at the functionalities the top 3 platforms are already offering today and what they announced for the future.

Facebook has introduced a “buy now” button already back in 2014 with first shoppable ads appearing on the app in 2015. On Facebook Marketplace – the eBay of Facebook – every private user today can sell, buy or give away products. In the U.S., payment in the Marketplace store is already possible with a simple one-site checkout. the next step for Facebook is to integrate personalized Facebook Shop ads. This, on the one hand, provides more opportunities for brands to connect with interested buyers and, on the other hand, more opportunities for Facebook to encourage browsing and buying. It helps users to set up shops, list their products in Marketplace and have them show up in related searches.

Manohar Paluri, head of applied computer vision at Facebook, recently announced that Facebook “wants to make anything and everything on the platform shoppable, whenever the experience feels right.”

Instagram has been offering “shoppable tags ” since 2016, with the ability to link product catalogs to social accounts. The Instagram Stories features also offer a well-established system for generating leads and sales via its link stickers (previously via swipe up). In 2020 Instagram has launched “Shops” as new hub for personalized shopping recommendations. brands can use IG Shops as an online window in full-screen format to position their brand and present their products to interested audiences. On Instagram Shops, consumers can browse products, explore collections, and buy items directly via the in-app check-out (currently only available in US).

Instagram also introduced shoppable carousel posts which allows up to 20 products being tagged and lauched Live Rooms, where brands can sell their products or services directly during a live event. How does it work? Simply add a link that allows viewers to add products directly to their shopping cart. Instagram is also testing a new AI supported visual search functionality to help users find similar products. This will soon allow users to select photos from their own camera to start a visual search. In parallel, AR try-on experiences will also be integrated into IG Shops which is great news for fashion and furniture brands. For more ideas check out 4 tips how to use Instagram for your social commerce strategy .

TikTok was the most downloaded app in 2021, with its mobile friendly short-form video content creating an entirely new approach to marketing and selling to consumers. Creating ways to monetize user-generated content is the company's sweet spot with the hashtag #TikTokMadeMeBuyIt racking up more than 4.1 billion views . To make the platform more shoppable, TikTok partnered with Shopify last year and launched in-app purchasing capabilities in certain markets. When users discover products while scrolling through videos, they can click through to a Shopping tab where companies can either sell directly on the platform, or use partner integrations to handle certain parts of the checkout and post-payment process outside of the app. ?

How do consumer brands fuel social commerce?

If social shopping becomes the new normal, it should also be economically interesting for brands. Is it? We believe: yes, with the right strategy. If the pandemic has shown us anything, it's our great need for connection. And this is exactly where brands need to start when it comes to social shopping: with authentic, empathetic communication, feedback opportunities, live and sometimes 1:1 shopping experiences. Sounds complex? Yes, but only at first glance. Because when companies succeed in rethinking their customer journey, the opportunities are endless.

For the customer journey, this first means an investment in the reorganization of previous processes. After all, if purchases are made entirely on social media platforms, this will have an impact on all touchpoints - from the first contact with the brand, through the ordering process and payment, to the checkout. Payment systems must be simplified (for example, through PayPal and Apple Pay integration), logistics processes must be redesigned, and marketing measurement must be adapted to the logic of social media. Here, too, the goal remains clear: an emotional connection between brand and consumer.

The rise of social media is offering brands a range of options to engage with potential consumers and trigger sales actions. Some options I have already described in a recent Forbes article , which in addition to the following strategies hopefully will be triggering your imagination and inspiring you to explore some of these tactics for your social commerce strategy:

1. Shoppable Social Content

User-generated content (UGC) can be a great way to engage with online users, enhance brands’ social media accounts and directly trigger a purchase action. Brands should encourage users to share their experiences online by making it easy to connect to the brand account or use memorable hashtags. When sharing UGC, marketers should pay attention to correctly tag the originator and thank them for their contribution. Lookbooks and shoppable Instagram feeds can also be used as ways of turning UGC into transactions.

Influencer Content

The challenge with social commerce is that consumers have to find your post (or social account) first before they can actually shop there. This means that the success of any social commerce strategy depends on the level of visibility and engagement a brand has with its audience on social media. That’s why many brands turn to social celebrities and influencers to leverage their massive organic reach and ability to influence their audiences. In fact, a 2019 Rakuten Marketing survey found that more than?eight out of 10 customers? said they were inspired to purchase something based on what they saw from an influencer. Influencers just need to tag your product directly on their story/post/reel and associate a product catalog with a shop on Facebook. They can also create shoppable guides, eg a xmas gift list with their most beloved brands or shoppable videos.

Advertising Content

Brands are starting to boost conversion by creating ads including product tags in the Instagram feed or shop tab. Ads in the Instagram Shop Tab address consumers who are already in the shopping mood and hence could result in higher conversion. They can also be targeted to specific groups with all the typical social media targeting criteria marketers learned to love in the Facebook Ad Manager. Brands can also use UGC or influencer content to advertise within the Shop Tab, as long as the influencer tags the brand and the brand received approval to use the content for that purpose.

2. Shoppable Events / Live Streaming

Brands can also leverage live-stream shopping or shoppable events to listen to and engage with their customers.?What social live shopping brings to the mix is immediate consumer feedback and interaction and virtually endless data that brands can use to fuel future commerce strategies. Types of live-stream shopping and when to use them include:

One-To-One

Sometimes less is more. Brands can have one-to-one live shopping streams on their social media accounts to help individuals connect with a trained sales associate. This is a great option for big-ticket items, as customers are likely to spend more time in the consideration phase of the funnel.

One-To-Many

This is your typical social shopping session. It’s the perfect place to show off a new collection or drive an exclusive sale. You can also use this outlet when you’re working with influencers so you can tap into different audiences through someone who is an expert in the space.

Live shopping events can either be set-up directly on a social media platform (for example via Instagram Live Rooms) or by using external live streaming technologies that integrates into the brands website, ecommerce or DTC shop. External plug-ins are interesting in those countries where Instagram, tiktok & co do not yet offer integrated check-out functionality, or for brands that prefer to own the entire customer journey and create an ecosystem fully branded and integrated into their website or DTC shop.

3. Ratings And Reviews?

Lets not forget that social proof is an important element for social commerce since 80% of consumers check peer ratings and reviews before deciding on the final purchase. Brands should hence encourage their actual customers, and especially their brand lovers, to leave a review of their product on the brands social media accounts. Identifying loyal customers or brand lovers through your customer relationship management (CRM) software can be another effective tool to boost positive online reviews and, thereby, improve sales conversion.?More insights regarding the power of ratings & reviews for e-reputation and e-commerce in the respective Territory Influence R&R Whitepaper .

What's next?

Social commerce is already considered an undeniable trend in e-commerce, and I believe it has come to stay. In fact Social Commerce will further be fuelled by user behavior and screen time of younger generations, as well as further development of commercial tools by social media apps. Using social media to sell products and services is a reminder that shopping has, for centuries, been a social experience. With socially driven commerce embedded in our DNA, and nearly every social platform developing tools designed to help brands sell online, I believe the future looks bright for social commerce.

To keep you up to date with the most relevant marketing trends for 2022, more social media marketing deep dives will follow in the coming weeks. register to the respective newsletter to not miss out and contact me directly for a more detailed discussion.