The social commerce revolution - Engage, discover, buy
What is Social Commerce?
Social commerce is transforming the way we shop online. It's more than just advertising products on social media. It's about creating a seamless buying experience entirely within these platforms.
Imagine seeing a pair of shoes on your Instagram feed, clicking "buy now," and checking out within the app itself. That's the magic of social commerce. It's about using social media platforms like Facebook, Instagram, Pinterest, and even TikTok to not just advertise products, but to facilitate the entire shopping journey – discovery, research, and purchase – all within the same app.
Traditionally, social media played a role in the early stages of shopping, helping us discover new products through influencer marketing or celebrity endorsements. But social commerce takes it a step further. Platforms like Instagram now have built-in shoppable features that allow businesses to create storefronts directly within the app. Products are tagged in posts, and users can click through to see details, reviews, and complete purchases without ever leaving Instagram.
What makes social commerce is on the rise:
Benefits for Businesses:
Cost-Effective Marketing: Compared to traditional marketing channels, social commerce offers a more cost-effective way to reach a large audience. By creating engaging content and utilizing organic reach, businesses can drive sales without breaking the bank.
Real-Time Customer Insights: Social media platforms provide businesses with valuable customer data through likes, comments, and shares. By analysing this data, businesses can gain insights into customer preferences, buying behaviour, and brand sentiment.
Building Brand Advocacy: Social commerce fosters a more personal connection with customers. By interacting with comments and messages, brands can build stronger relationships and turn satisfied customers into brand advocates.
Data-Driven Personalization: By leveraging customer data collected through social media interactions, brands can personalize the shopping experience. This could involve recommending products based on past purchases, showing targeted ads, or offering special discounts to loyal followers.
Enhanced Customer Engagement: Social commerce fosters a more interactive shopping experience. Features like live shopping events, interactive polls, and social media contests can create a sense of community and excitement around products, leading to increased engagement and brand loyalty.
Increased Sales Through Micro-Influencers: Social commerce opens doors to collaborating with micro-influencers. These influencers, often with highly engaged and targeted followings, can promote products to a niche audience that's more likely to convert. Partnering with multiple micro-influencers can create a wider reach and a more authentic feel compared to traditional celebrity endorsements, potentially leading to significant sales growth.
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Challenges and Considerations:
While social commerce offers immense potential, there are challenges to consider:
Platform Dependence: Brands are reliant on the ever-evolving policies and algorithms of social media platforms.
Security Concerns: Ensuring secure in-app transactions and protecting customer data is crucial.
Customer Service: Having a plan to address customer service inquiries efficiently within the social media platform is essential.
Companies using social commerce
Walmart: Walmart has embraced social commerce wholeheartedly. It has hosted shoppable livestreams on multiple platforms and even has its own live-streaming feature on its website. It understands the reach and engagement social media offers.
H&M: Recognizing the social aspect of shopping, H&M uses social media to create a community. It encourages customer content and showcase user-generated photos, making shopping a more interactive experience.
Target: Target utilizes social media to create a fun and engaging shopping experience. It run interactive campaigns like "Target Challenge" on TikTok, where users create videos using Target products. This strategy not only increases brand awareness but also drives sales through shoppable links.
Nykaa: This leading beauty retailer in India has a strong presence on Instagram and other social platforms. It uses influencer marketing, beauty tutorials, and interactive features like polls and Q&A sessions to drive engagement and sales.
Lululemon: This athletic apparel giant isn't just about physical stores. It leverages Instagram Live for fitness classes led by its brand ambassadors, creating a sense of community and showcasing its activewear in action. Additionally, shoppable links within the live streams make it seamless for viewers to purchase the featured clothing.
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Urban Outfitters: This trendy clothing and homeware retailer leverages social media for a more playful and interactive experience. It uses platforms like TikTok and Instagram to host design challenges and user-generated content contests, encouraging customers to showcase their creativity and style using Urban Outfitters products.
Amazon: The retail giant is no stranger to social commerce. It leverages platforms like Instagram and Facebook for "shoppable livestreams," where influencers showcase and discuss products viewers can purchase directly within the stream.
Zalando: This European fashion giant utilizes social media for a localized approach. It partners with fashion influencers across different European markets on Instagram, tailoring content and promotions to specific regions.
Nike: The sportswear giant uses social media to create interactive experiences for customers. It hosts live workout sessions on Instagram and Facebook featuring their athletes, allowing viewers to virtually participate and shop the featured looks with ease.
The Future of Social Commerce
Social commerce is still evolving, with new features and technologies emerging all the time. Here are some exciting possibilities:
Augmented Reality (AR): Imagine trying on clothes virtually before you buy them, all within a social media app. AR can revolutionize the shopping experience.
Social Shopping Communities: Platforms might create dedicated spaces for users to discuss products, share recommendations, and get advice from peers.
Focus on Entertainment: Social commerce isn't just about selling; it's about creating engaging experiences. Interactive features and gamification can make shopping more fun and social.
Social Commerce Statistics
Social commerce generated an estimated revenue of?$571bn in 2023?globally. It is forecasted to surpass the $1tn mark by 2028 at an expected compound annual growth rate (CAGR) of 13.7%. This rapid growth signifies a booming market where businesses can connect with new customers and boost sales.
67% of global consumers have?made a purchase through social commerce—up from 65% in 2022 and 44% in 2021—and 53% signify intent to shop more in the future.
Over half of global consumers (53%) want to buy from within social apps and prefer not to be redirected elsewhere. Additionally, 49% say?they have purchased “on the platform”- in-app purchase or within the social platform while 26% of consumers have clicked on links within social media platforms that redirected them to external websites to complete their purchases.
Millennials are the generational group with the?highest adoption of social shopping. Gen Z ecommerce users followed, with over half reporting purchases through these platforms. Among age groups, 83% of those aged 16 to 24?have shopped through social media?compared to just 33% of those aged above 55. Seven out of ten online shoppers around the world between the ages of 27 and 42 had already?made purchases directly through social networks?as of the second quarter of 2023.
Facebook still leads the pack as the preferred social commerce platform, but age groups still greatly contribute to platform usage. Gen Z-ers prefer TikTok, Millennials go for YouTube, while Gen X-ers love Facebook.
While over 80% of shoppers were?satisfied with a recent social purchase, only about 30% felt that what they bought was “high quality.”
Social commerce is an exciting opportunity for businesses to connect with customers in a whole new way. By leveraging the power of social media, brands can create a seamless and engaging shopping experience that drives sales and builds loyalty.
- Aishwarya Dinesh (Crispida Analyst)
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