Social Commerce May Have Stagnated, But its Future Remains Bright
Social media is, by nature, interactive. Millions of users scroll their personal feeds every day, liking and commenting on their favorite posts while discovering new products, brands and services along the way. Most retailers maintain a social media presence, but their social media accounts are largely used for marketing purposes or customer service. While consumers may browse a retailer’s social media page, they usually don’t transact via these platforms. According to our recent survey at SUMO Heavy, 82 percent of consumers have yet to use a feature like a social buy button to purchase directly from a social media platform.
However, the future stills look bright for social commerce despite the lack of adoption so far. Instagram recently announced new Shopping features, including one that allows brands to add a shopping bag icon to their Stories so consumers can tap to buy products directly through the app. Snapchat is set to launch Shoppable Snap Ads, ads with product catalogs at the bottom of them. When the user taps an item, they're taken to the retailer’s website without ever leaving the app.
Though these features will no doubt intrigue shoppers, consumers are wary of social commerce and its legitimacy as a transactional channel, making the future of social commerce a little foggy.
The Social Media Influence
According to Mediakix, the average person spends almost two hours a day on social media. It’s no surprise then that social media impacts the way people shop and discover products. In fact, our survey suggests that nearly half of consumers say they’ve purchased products or services they’ve discovered through social media.
Social media’s influence isn’t just limited to discovery, however. Fifty-eight percent of consumers say social media influences their purchasing decisions, even if the product or service is found elsewhere. While millennials remain the most impressionable group, older generations’ purchase behaviors are also affected by social media ads, posts, tweets and videos as well.
Earlier this year, Facebook came under fire when data from millions of the platform’s users was acquired by political consulting firm Cambridge Analytica without user consent. The scandal made consumers everywhere question Facebook’s data practices and wonder how social media platforms use customer information. The end result was consumers were less trusting of the technology altogether.
While concerns over the mishandling of personal information haven’t deterred consumers from using social media — the number of consumers who are on these platforms regularly hasn’t changed in two years — they're hesitant to use them for reasons outside of networking with friends and family and, specifically, buying products and services.
Chatbots and Conversational Commerce
Social commerce may be stalled, but thanks in large part to the emergence of voice assistants, chatbots are on the rise. Thirty-seven percent of consumers say they’ve interacted with a messaging chatbot, with more than three-fourths citing the experience as helpful or informative. Through Facebook Messenger, WeChat and other platforms, consumers can do more than speak with chatbots — they can make purchases as well.
Despite consumers’ positive outlook on the emerging technology, they remain unfamiliar with conversational commerce (i.e., shopping through chatbots on social networking apps). In 2016, only 27 percent of consumers knew what it was, and two years later, more than half of consumers still don’t know they can buy products and services via chatbots.
While the future of social and conversational commerce seems uncertain, there are factors that suggest there’s still promise. 2018 has been a roller coaster year for the social media space, but data concerns are on the decline as major platforms like Facebook address problems in the industry, leaving room for social commerce to gain wider adoption. The continual release of voice-powered technology should also help conversational commerce become known as a viable way to buy products and services, and in turn increase in popularity.
Social media and chatbot shopping haven't yet hit their stride, but by staying on top of the latest developments from social media platforms and taking advantage of the necessary technology, retailers can stay ahead of the curve — and their competitors.
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Bart Mroz is CEO at SUMO Heavy, a digital commerce strategy firm. The company builds, connects, expands and invests in growing online retailers. This group of experienced strategists, consultants, designers and developers works to build solid brands and to create effective online retail solutions. Bart is an expert in e-commerce, business consulting, and technology strategy.