Nike's Air Jordan III 'Tinker' shoes were sold out 23 minutes after its pre-release on Snapchat in 2018. By collaborating with Shopify, Snapchat, and Darkstore, Nike enabled everyone at the then NBA All-Star afterparty to use snap codes to buy its new range of shoes. The brand's move to leverage social media for selling products is one fine example of social commerce, which has become the latest buzzword in 2022.
Leading brands, D2C startups, and even small businesses can sell products directly to customers through social commerce. It's because social media platforms are increasingly being used to find new products rather than as a source of entertainment. Social media firms, such as TikTok, Meta, YouTube, and Snapchat, encourage customers to shop within their platforms rather than switching between other apps.
Currently, the social commerce market is estimated to hit $80 billion by 2025. As a brand, you, too, can jump on the bandwagon by using interesting strategies and driving traffic to your social storefronts. Since people look up to influencer recommendations before purchasing, investing in influencer marketing becomes a viable option.
In this article, we have answered all the significant questions like how important social commerce is and its benefits and challenges. Also, how are social media platforms pushing it to be the next big thing, and where does influencer marketing fit to help you build an effective social commerce strategy?
Social commerce is a marketing strategy where brands use in-app shopping tools provided by Facebook, Instagram, YouTube, Snapchat, Pinterest, and TikTok to enable customers to purchase without leaving the social media app. It provides a frictionless shopping experience to customers where they don't have to visit the brand's website to make a purchase.
Brands eliminate the time consumed in leaving social media and buying from the website with the help of Livestream shopping, product tags, AR trying features, shop now buttons, and more. To enable social commerce, companies create a product catalog on social media or directly tag products from third-party shops like Shopify or Magento to direct consumers to the checkout page.
The social commerce sales funnel starts from social media and ends on the same. The customer journey from product discovery to purchase and feedback takes place on the social media app itself.
Social Commerce vs. E-commerce
Some people confuse social commerce with e-commerce, but there's a major difference between the two. In e-commerce, brands use social media only to drive traffic to their website or e-commerce stores like Shopify, etc., to make sales. On the other hand, social commerce is a subset of e-commerce where the brands don't need a website page to let customers view and buy the product. The consumer can view products and features on social media and then purchase directly from the social media platform.
Social commerce may sound interesting for brands, but is it what consumers really want?
Social commerce has become a huge trend in China due to the ease of shopping. Research shows that nearly 50% of internet users in China have bought something from social media in 2021. The fact that consumers can discover and buy products on one channel encourages consumers to indulge in social shopping.
Alison Battisby, the founder of Avocado Social, a social media consultancy company, discusses how consumer behavior is driving social commerce in the "Ahead Of The Game" podcast hosted by Digital Marketing Institute. "Since the pandemic, the behavior of impulse buying has skyrocketed. Some of the stats show how many of us are now buying products to improve our emotions. Social commerce is increasing in terms of sales, and people are getting more used to the way that it actually works."
Let's take the example of Zimba, a teeth-whitening brand that boosted sales through Facebook shops. After listing its products in the shop, the brand recorded 1200 incremental orders in 2 months, which increased its average order value by 6.7%. This social commerce example proves that consumers, too, are interested in buying products on social media, provided the brands offer a streamlined shopping experience.
However, social commerce is yet to pick up pace in western countries, including the UK, the US, and Europe. Statistics reveal that only 36% of US internet users indulge in social shopping, which shows that consumers in the US are still skeptical about buying on social media.
The reason behind Facebook shutting down its live shopping feature, and Instagram pulling back on affiliate commerce, is the consumer's perception of social commerce. Even though marketers can provide a streamlined shopping experience through social commerce, consumers have doubts about sharing their personal information on social media.
"It feels like the social commerce industry has moved a bit too quickly and we're trying to force the customer down that route when actually the level of comfort a customer has with purchasing in that way isn't there yet," says Sarah Penny, content & research director at Influencer Intelligence in an interview with Digiday.
The social commerce industry is fairly new, and customers are still trying to get comfortable with it. So it may not seem like the next big thing right now, but with constant push from social media platforms, there's a chance consumers will buy into the trend.
Read our data-packed 2023 influencer marketing report to get latest insights on why social commerce and live shopping might pick up pace in the western region in 2023.
Social commerce works well for brands with physical products that consumers buy on impulse, including fashion, technology, beauty, home decor, food and beverages, lifestyle, and more. For example, Nike, H&M, Gymshark, and Marks & Spencer are the leading businesses benefiting from social commerce.
While physical product brands are thriving with effective social commerce strategies, the service sectors like restaurant chains and B2B (business to business) industries are still figuring out how to leverage it. Such industries can use social media to connect with the audience and build trust and awareness, but they might face difficulty in selling products directly through social media shops.
Battisby says, "If you're a B2B brand looking to sell products or services via social commerce, social commerce isn't really the place to be doing it. You'd want to think more about your strategy on Linkedin or Twitter. Even Instagram works for B2B but in a different way. You have to offer some sort of value through your content rather than relying on tagging items in a shop."
Since Covid-19, the shopping world has shifted from websites and e-commerce stores to social media. Research shows that 81% of shoppers look for products on Instagram and Facebook, and 48% of Pinterest users use the app to shop. With more and more audiences flocking to social media channels, they have become a top choice for brands to sell their products.
Mallows Beauty, a UK-based D2C skincare brand, uses Livestream shopping to sell products to its consumers. The brand reports that they make more sales from Livestream than from their physical stores. Founded in 2020, the brand used social media from the beginning to engage and ramp up its customers with authentic content. In recent months, the brand has capitalized on several new social commerce features like the TikTok-Shopify partnership to build a strong social presence.
Social commerce helps:
From finding products on social media and visiting websites to purchase, there are a lot of points where you can lose the customer's attention.
Social commerce eliminates the possibility of your customers slipping away or being distracted by the next interesting thing. Since the customer journey is completed under one roof, there's no friction in between that would cause the customer to lose interest and move on to something else, keeping the consumers hooked till checkout. Social commerce offers a see it, click it, buy it model where customers find out about the product, see reviews, find information, and ultimately buy it.
Social commerce brings in the social aspect of the shopping experience. While shopping, most customers prefer to know what their friends or other customers think of the product and to speak directly with the brand, which is not possible while shopping in brick-and-mortar stores or even e-commerce stores.
People can connect with the brand when shopping on social media channels, review products they like, and buy products without leaving the platform.
Influencers play an important role in creating the social shopping experience. Social media influencers create a fun and aspirational shopping experience for customers. Storytelling content, back-and-forth commenting, and consistent DM replies from influencers excite the customers about shopping for a product. This creates a social shopping experience for the audience and allows them to buy the products they are satisfied with.
Get new blogs, case studies and our Market Landscape reports directly in your inbox.
We don't spam.