How Social Commerce is Changing Retail
Social media is our digital community, and it's fast becoming our shopping mall as well. Social commerce — using social platforms to sell products — has been rapidly growing, climbing to over $36 billion in U.S. sales this year, about 35 percent more than in 2020, according to a recent report by eMarketer.
Social commerce has been around for a while, most notably since 2007 when Facebook launched its first version of Marketplace, where users could sell to each other on a peer-to-peer style platform. But only recently has social shopping taken off as the pandemic-driven e-commerce boom has made consumers very comfortable buying online. People continue to spend more and more time on social platforms, which, in turn, are adding features that make shoppable posts practical for both brands and consumers.
Social commerce is good news for brands as it offers an excellent opportunity to reach new audiences on well-established platforms. And because consumers can make purchases without leaving those platforms, social commerce has the powerful benefit of streamlining the sales process.
The Rise of Social Media and E-Commerce
Since social media has reached global penetration and sustainable growth through the years, it’s not too much of a stretch to see why social commerce is being embraced by businesses worldwide.
Several factors are contributing to this trend. One is that people are spending more time on social media. According to Statista, the average person spends two hours and 22 minutes on social media per day. In addition, platforms provide more efficient targeting tools, and mobile shopping has been steadily increasing, with sales projected to reach $3.56 trillion in 2021.
Now, boosted by the pandemic, e-commerce has boomed, achieving a decade of progress in 2020 alone. In many industries, e-commerce sales increased 40 percent to 70 percent in a matter of weeks, as more consumers have purchases shipped to their doorsteps. Consequently, more people are on social media, where they spend a lot of time, to buy from brands looking to sell via e-commerce.
The Shift in Consumer Mindset
For a long time, social media was where consumers window-shopped before heading to Amazon.com, Walmart or other e-commerce sites to make a purchase. Brands used social platforms solely to build relationships, communities and trust. However, visual-first platforms such as Pinterest and, more importantly, Instagram began blurring those boundaries and changing the game.
The past few years have seen the emergence of "Instagram brands" that exist entirely on that platform. The app also helped fuel the explosion of influencer marketing, with key opinion leaders (KOLs) being paid to promote brands, products and services across social media.
Every social media platform is now rushing to add commerce features, giving brands various options when moving into social shopping.
The Vertical Integration of Technology
Instagram continues to be the gold standard for shoppable posts, mainly due to its visual nature. Facebook offers a similar feature through its product tags, allowing your brand to benefit from the synergies between both platforms when posting.
Pinterest makes it possible to sync information between your website and organic posts with rich pins that update all pins automatically as you make changes. And while YouTube may not jump to mind when thinking of shoppable posts, it's an exceptional channel to present products in. Brands can use cards that pop up during a video and include shopping links, or, as influencers like to say, by using "links in the description box below,” which is also a convenient spot to add affiliate links.
Of course, as the popularity of TikTok keeps rising, many brands are closely watching how that platform will evolve in 2021. After testing shoppable videos in 2019, the short-form video app rolled out shoppable ads last year. It continues to add shopping features and is now moving ahead with ones that allow brands to upload catalogs and livestream shopping, enabling advertisers to link to e-commerce pages during live takes.
Finally, third-party platforms are throwing themselves into the game. For example, Shopify announced in early February that it was enabling Shop Pay, its secure payments process, for Shopify merchants selling on Facebook and Instagram.
The idea of social commerce has been around for more than a decade, but only recently has it gained impressive momentum among brands and consumers. As social media and e-commerce permeate more aspects of our lives, it's no surprise that the two are merging. Social commerce makes it possible for consumers not just to discover new products in the places they're spending more of their time, but to buy them directly. With social media platforms rolling out more and more features to enable those transactions, social commerce is becoming the 21st century shopping mall.
Thibaud Clément is the chief executive officer and co-founder of Loomly, a brand success platform that empowers marketing teams to grow successful brands online through collaboration, publishing and analytics features.