Have you used social commerce yet for your business? This method of selling online isn’t new, but it’s rapidly gaining traction. While eCommerce has been growing as the preferred channel for retailers for some years now – sales via eCommerce crossed USD 4.89 billion by early 2021 – social commerce is set to become the next big thing in online selling. Globally, it’s expected that social commerce will grow three times as fast as eCommerce – from $492 billion in 2021 to $1.2 trillion by 2025.
So why should you consider Social Commerce, how does it measure up to eCommerce, and how best can you leverage their power? We’ve put together a ready reckoner.
Why Social Commerce?
Accenture defines social commerce as “the integration of social experiences and e-commerce transactions in a single path to purchase, enabled by a platform”. Currently, social commerce is around 10% of all eCommerce – it’s estimated that it will grow to 17% of eCommerce revenue by 2025, driven primarily by Gen Z and millennial consumers.
Does 10% sound like a small number? It shouldn’t. Two billion social media users made a social commerce purchase last year – 64% of all social media users. That’s the potential of social commerce.
Social networks provide an opportunity to build relationships and communities. Social commerce provides more opportunities for customer engagement, feedback and communication. It reduces marketing costs, drives leads from around the world, and boosts loyalty and retention.
On the downside, social commerce currently does not enjoy the consumer trust that eCommerce and traditional commerce do. Daily monitoring is needed to develop a clear strategy, and best practices are still evolving.
Facebook, Instagram, Snapchat and TikTok have all rolled out shopping features to allow retailers to take advantage of their platforms for social commerce.
Social Commerce – Modest or Flamboyant twin of eCommerce?
eCommerce greatly democratized retail. Traditional commerce demands investment in multiple physical stores and inventory, while for eCommerce, the only requirement is an online store. However, eCommerce websites are expensive too.
Social commerce democratized retail further, since sales are completed via (currently free) social media platforms. Anyone with an interesting product to sell can do so via social commerce, with minimal investment. In addition, eCommerce requires technical knowhow, while social commerce is more accessible – social store setup is very user-friendly. Social commerce weaves selling into the fabric of daily life, helping create stronger customer relationships and further increase customer loyalty by building a sense of community.
Beyond the fact that both eCommerce and social commerce involve selling products online, there are several other similarities. Both involve selling directly to customers, thus increasing profitability. Both are relatively easy to scale, and convenient for buyers to access.
In both cases, the seller and buyer are in direct virtual contact through various technology tools. They depend on third-party reviews for decision-making. Typically, they enjoy after-sales support and return/replacement benefits, beyond those offered by traditional retailers.
Best Social Commerce and eCommerce Platforms
Social commerce is conducted on existing popular social networks. A social commerce platform is one that enables social shopping and, therefore, it’s understandable that the most popular social commerce platforms are the most popular social media platforms. This includes Instagram Shopping, Facebook Shops, Pinterest Shopping and YouTube Shopping. There are also certain third-party platforms such as Taggshop which bring social commerce features such as reviews and shoppable UGC (user-generated content) to the eCommerce website).
How do we use a social commerce platform? It depends on the platform. There’s a simple setup process with strong tutorials on each platform.
Currently, social stores are supported on these platforms only in the USA.
On the other hand, eCommerce is conducted through a dedicated customized online store, developed on an eCommerce platform with unique tools and features to make online sales easier and more efficient. Some of the best eCommerce platforms include Magento Commerce, Salesforce Commerce Cloud, and Big Commerce, among others.
Social Commerce in action
You can leverage your social feed to increase revenue in a number of ways. You can create a digital shopfront with smart social shopping. Feeds on Instagram, for example, are defined by the visuals. Brands like CLUSE leverage user-generated content (UGC) to create a strong brand. It’s easy to find UGC and pull potential customers to the brand page and eCommerce store using the right Instagram hashtags. “A staggering 93% of customers believe user-generated content is very helpful when making a purchasing decision.”
Another important social commerce platform is Pinterest, leveraged well by Dollar Shave Club. Have you seen their Pinterest boards? They have a board dedicated to customer feedback and unboxing photos. This is a great combination of social proof and UGC.
Since social proof is so important to generate trust, social commerce can create options for users to talk about your brand. It could be something as simple as an online game or quiz. Sephora, for example, has a comprehensive Fragrance IQ quiz – not just a great piece of shareable content, but an example of personalized social commerce.
Social commerce offers as many paths to purchase as possible. Don’t just include sales links in the bio. Leverage branded hashtags and Shops created on the platform itself. “One million users regularly buy from Facebook Shops every month.” Burberry is leveraging bite-sized videos and Facebook Live to take advantage of these Facebook shoppers.
Is Social Commerce suitable for your industry?
If you’re selling online, chances are that social commerce will help you improve relationships with customers and increase sales. That’s true no matter the industry you’re participating in.
While there is a tendency to believe that B2B businesses need not participate in social commerce, it is the new wave and building and engaging with your customer community will help you no matter what industry you’re in.
When you’re selling direct to consumer without a strong supply chain, social commerce is key to your omnichannel presence and strategy. It’s a great way for new brands to reach out directly to target audiences around the world, through brand-tagged content put up by influencers.
Fashion, food and other ‘photogenic’ consumer-oriented industries are perhaps the obvious choices for social commerce, and they do indeed benefit greatly from social selling.
So, should you use social commerce or eCommerce? The right strategy, in many cases, is a hybrid one combining traditional commerce, eCommerce and social commerce. For purely digital brands, eCommerce and social commerce can work together to improve customer experience and increase revenue.
Start selling online today. Reach out to Ziffity to discuss how our eCommerce Development Services can help you get started on your online retail journey.