How Social Commerce Is Revolutionizing The Way We Shop
November 29, 2022
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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?
What is social commerce?
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.
Are consumers genuinely interested in social shopping?
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.
Which industries or businesses can win at social commerce?
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."
Why is social commerce important for brands?
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:
1. Keep your customers hooked till checkout
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.
2. Create a social shopping experience
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.
Discover the right social media influencers without putting in manual effort. Try affable.ai to get access to 6M+ influencer profiles.
Social media channels are a great place to get audience insights like age, gender, geolocation, interests, and more, as most people share such information willingly on social media. With the internet transforming into a cookie-less world, you can use first-party data from social media to target your audience. Using this data, you can place your product in front of a specific target audience, which e-commerce sites don't allow.
4. Build quality social proof
With several similar brands in the market, people rely on social proof to choose the right product. They turn to social media for information on which product is popular and effectively solves problems and why people like a specific brand. Unboxing videos, fashion haul, and makeup tutorials are a big hit on Instagram and TikTok, which help customers discover viral brands and learn about their products.
To build a social proof-driven presence on social media, leverage influencers and your previous customers. You can ask your customers to share their product experience on social handles, or you can use influencer content for your product pages and social feed to liven up your brand with quality social proof.
5. Reduce cart abandonment for mobile shoppers
Cart abandonment is the biggest issue for mobile shoppers. According to research from drip.com, the average cart abandonment rate in all industries is close to 70%.
If the customer sees a product on social media, searches the brand's website on Google, and then views the product to make a purchase, he/she may get distracted in between and leave the process. Things like slow website loading speed, ads from other brands or notifications, etc., may irritate the customers and cause them to leave the shopping journey without purchasing.
Social commerce reduces this cart abandonment as it keeps the shopper on social media at every touchpoint.
6. Drive traffic to your website
Social commerce can prove to be an effective SEO solution for marketers. Brands looking for ways to boost their website traffic can use social commerce to link to websites, product pages, and more.
For example, CLUSE, a fashion brand popular for its range of modern watches and jewelry, uses Instagram storefronts to drive traffic to its website. The products have a 'View On Website' button below them, allowing users to view the product on the website and buy it there, creating a ton of audience to flock to the website and boost traffic.
How are brands planning to engage customers through social commerce?
The new social commercefeatures on social media platforms are compelling brands to sell products on the apps and boost discoverability. Charlotte Tilbury, KitKat Australia, and Petco are the brands actively contributing to the growing social commerce industry.
Charlotte Tilbury launched a 3D holiday storefront with a 'Shop with Friends' feature to enable customers to buy the brand's cosmetics and explore the virtual store with peers and family members.
Petco, the popular pet health and wellness brand in the US, is using live shopping to engage pet parents, drive awareness, and boost sales for its products.
Besides live shopping and storefronts, many brands are integrating e-commerce stores like Shopify, Magento, etc., to further simplify the buying journey. They plan to build effective social commerce strategiesthat streamline the buyer journey at every step of the funnel and retain the user's attention.
Let's explore some of the most used social commerce strategies in detail!
1. Shoppable posts with product tags
Consumers are seeing more shoppable posts on brand social media pages where they can view the product worn by the models and buy them instantly without leaving the platform.
The men's underwear brand, MeUndies is a perfect example of this. The brand posts images of models wearing the product and then tag the products on the post. People see strategic dots placed on the posts, which when tapped open the product page where the user can see the description for the same.
The number of shoppable user-generated content (UGC) will also increase. People on social media don't just buy products; they like to show them off to their peers too. So they create posts and videos and share content about why they liked the product, which helps other users to select the right brand.
Lindsey Heppner tells affable.ai in the 'Marketer Profile' interview, "Social Commerce will reach a point where each individual on every social platform will have a uniquely curated feed to sell what they think is essential to the consumer of their niche audience. We've seen that UGC (user-generated content) is becoming vital in Social Commerce because brands realize that they don't need to have influencers posting; instead, they need the value of the strategic content to create buzz around their brand."
Brands are filling their social feed with testimonials to look more authentic. You, too, can leverage UGC to generate quality social proof once you have permission to use the content.
2. Social media storefronts
The most used social commerce strategy brands adopt is building individual storefronts on social media channels to allow customers to browse products. Facebook shops, Instagram shops, Pinterest shops, etc., enable brands to list their product catalog on the platform.
For example, Kylie Cosmetics, a beauty brand founded by Kylie Jenner, uses Instagram storefronts where they post their new collections and upcoming products, which the customers can purchase on the app. The store showcases its products with descriptions and price tags. They also have a 'View Shop' button on their profile which can be used to browse products.
3. Swipe up links or buttons
Swipe-up links and CTA buttons are a hassle-free way to introduce social shopping to customers and direct them to the checkout page.
Instagram allows brands and creators to add links to posts, stories, and reels, which helps consumers quickly complete the checkout process. Brands are using the swipe-up links (now available as stickers) to showcase products, drive traffic to websites, or take the user to the checkout page once they're ready to purchase.
Also, links are a great way to track the progress and learn what's working for the consumers.
When it comes to engaging potential consumers, micro-influencers are your best bet! Micro-influencers on social media build authentic relationships with the audience, which brands can use to engage their target audience while building a connection themselves.
Research shows that micro-influencers create an average engagement rate of 6%, which is higher than other influencers. Although micro-influencers don't have millions of followers, they have the trust of their audience, who likes to interact with their content. So for brands, micro-influencers are the key to building an effective social commerce strategy.
More and more brands are collaborating with micro-influencers on Instagram, YouTube, and TikTok to promote products with fresh and authentic content that resonates with the audience.
With the launch of TikTok, people have become more fond of short videos, which last about 15 seconds up to a minute. Such videos are packed with information, are engaging, and instantly capture the audience's attention.
Milkbar, a bakery launched in New York City by Chef Christina Tosi, initially had 75% of its sales from physical stores and the rest from social media. However, amidst the pandemic, the bakery doubled down on its social media efforts by creating short-form videos featuring its products, recipes, and tutorials to get in front of the customers during lockdowns. Using short videos, the bakery amassed over 800,00 followers on Instagram and generated tens and thousands of views on their videos.
Although Facebook has shut down its Livestream shopping, there's a possibility that this trend might pick up in the coming years. Live stream shopping is like selling on a webinar; many brands and creators have tried it to engage their customers and compel them to buy while they're live.
With links and CTA buttons, the brands ask the consumers to purchase. TikTok and YouTube are trying to push this trend off the roof. There's a sort of competition going on between YouTube and TikTok to become the live shopping giants.
Glamnetic, a beauty company selling magnetic eyelashes and press-on nails, used Facebook's Livestream shopping feature best before the company shut it down. They went live regularly on Facebook with pro tips, tutorials, and exclusive offers for its viewers. The brand also tags the products on the Livestream for the customers to view their products.
How different social media platforms are enabling social commerce
Social media has transformed from communication channels to product discovery tools. TikTok, Instagram, and YouTube have become more like shopping platforms for the younger generations to find new products, so much so that they are now a threat to Google, the leading search engine.
Google has revealed that 40% of GenZ users have shifted to TikTok to discover products and brands. Even with the Google shopping feature, the younger generations are more interested in searching for businesses on TikTok and other social media channels.
Lovisa Wallin, Swedish social media star and TikTok creator, says in an interview with Cure Media, "Every time I'm going to a new country, I think of which restaurants I should visit. I go to TikTok to see what people have tagged on those restaurants I can visit. I see somebody who has been there and has posted short videos that make me see the vibe of the place and the whole menu. It's so easy to have the whole picture."
Social media platforms have launched features that can streamline product discovery for consumers. Features like in-app shops, product tagging, AR try-on, Livestream shopping, etc., help brands build a solid online shop on the channels.
Facebook is the number one choice for brands when it comes to selling products on social media. The Meta business suite offers advanced tools for businesses to set up Facebook shops and product catalogs, which the users can use to buy their favorite products directly from the app.
Facebook social commerce features:
Facebook Shops: Customizable storefronts for brands to showcase their products.
Facebook Marketplace: Allows users to list products and browse from others, similar to eBay.
According to August news, Facebook has pulled back from live shopping as Meta thinks they should focus on short-form video content like reels. However, the Livestream shopping features will remain active and under development on Instagram.
Instagram has updated itself into an innovative social commerce tool with features that make selling easier for brands and creators. Owned by the parent company Meta, Instagram has recently launched several functions that help brands tag products, show catalogs, add product links, and integrate checkout pages.
Instagram social commerce features:
Shoppable posts: Enables IG users to shop for products by clicking the link in the brand posts.
Product stickers: Clickable product stickers that enable shopping.
Shoppable stories: Users can shop directly by clicking the tagged product.
Reels shopping: Brands can tag products and add links to enable seamless shopping.
IGTV shopping: Users can shop through product tags and links, similar to stories.
Explore tab shop: Lets customers shop by exploring specific products.
Instagram Maps: Allows users to find businesses and products on the map nearby
Since TikTok's official partnership with Shopify, the app has fully powered social commerce. After launching a marketplace for TikTok creator marketing, the app has introduced a TikTok shop, livestream shopping, and more to help brandsbuild effective social commerce on the channel.
TikTok's 2020 'Path To Purchase' report stated that the customer buying journey on the app creates a loop instead of a linear path. The study shows that users on TikTok first discover the product, see reviews, buy it, and then share their experience content on their profile.
The #TikTokMadeMeBuyIt is a big hit on the app with more than 4 billion views, including content from users and creators posting about products they bought after seeing it on TikTok. The platform introduced TikTok shopping to uplift this trend, allowing brands to boost their social commerce sales by featuring products on their profile.
According to the company, "TikTok Shopping is the suite of solutions, features, and tools that allow businesses to tap into the power of commerce on TikTok."
TikTok shopping was initially available only for Shopify merchants, but later it expanded to a wider audience. The company has future plans to integrate with Wix eCommerce, Bigcommerce, Square, Base, Shopline, and more such e-commerce companies.
Meanwhile, the app is also planning to launch live Tiktok shopping for its US-based users. The feature will allow US consumers to buy on live streams without leaving the app.
YouTube is shifting from only a social media channel/search engine tool to a social shopping platform. The company has launched its "From YouTube to You" project, under which creators will create more gift ideas and product-related content to push shoppers to buy products on the app itself.
To compete with rivals TikTok and Meta, YouTube introduced shorts that let users create short-from videos. They also added a shopping feature to YouTube shorts to enable users to buy products as they scroll through the videos.
The recent YouTube Shopify partnership will allow consumers to list products on live streams, videos, and the store tab, which is yet to be added to the merchant's channel.
YouTube says, "Creators who link their stores can display their products across their channel and benefit from Shopify's real-time inventory syncing so that viewers are never disappointed to find a product out of stock. And, for a more seamless shopping experience, creators in the US can enable onsite checkout so that viewers can complete their purchases without leaving YouTube."
Snapchat has turned its focus to augmented reality reliant shopping through which users can try out the product with AR lenses on Snapchat shops. Businesses can create a catalog of their products which users can try out through the lenses. The Snapchat shop works best for fashion, eyewear, and footwear brands.
Leading beauty brands like MAC Cosmetics and Ulta Beauty have already dove in headfirst to try out the catalog-powered shopping lens for their customers. Ulta beauty earned $6 million in sales after testing the lens and came across 30 million try-on in just two weeks. The numbers prove that social media is seeing full-blown growth in social commerce.
Similar to its counterparts, Pinterest has too set foot in the social commerce world with shoppable pins. Pinterest has always been the go-to app for users when they want to find inspiration for new products, styles, trends, or more. With the app rolling out its shoppable pins, users can buy the saved pins.
The Pinterest shoppable pins display a blue shop tab that lets customers know they can buy the product. The app supports the entire customer journey, from seeing and saving the pin to the checkout page.
Pinterest even offers brands the freedom to create creative customizable content for their products that pushes the buyer further down the purchase funnel. Patagonia, KarmaPlace, etc., are some brands selling on Pinterest.
Even Shopify merchants can bring their products in front of more than 500 million users by connecting their e-commerce store to Pinterest. They can create promoted pins, start targeted campaigns, and even run ads on the app.
The Harlem Candle company uses Pinterest shopping pins to its advantage by creating a gallery of eye-catching images of its products. With Shopify integrations, users can easily tap on the pin to purchase their item.
What are the limitations and challenges of social commerce?
Limitations of social commerce:
1. High-maintenance and time-consuming
Social commerce is time-consuming compared to ads. In advertising, all you have to do is create the content, select the target audience and place the ad. But insocial commerce, you have to keep the content flowing on social media for your target audience to interact with. You need to maintain a constant connection with the audience, so they don't forget about your brand and move on to competitors.
Solution: Invest in influencer marketing. With influencers, you can keep a constant flow of fresh and engaging content without spending too much time as the content creators take care of everything. They even interact with their followers daily and talk to them about your products, creating an authentic connection between you and your target audience.
2. Competition from marketplaces
Even though social media is becoming a product discovery tool, people still rely on marketplaces like Amazon.
Amazon is doubling down on its efforts to retain its customers instead of losing to social commerce.
In the Forbes article 'Amazon Is Looking More Like A Social Media Platform,' the author states, "Amazon is starting to look more like a social media app than ever before. It has even been testing its own version of TikTok among employees. For the past couple of months, I have noticed huge media buys from Amazon on Pinterest and Instagram, using influencer video content to drive me to the said influencer's Amazon storefront page, where I can shop a curated selection that the influencer has compiled."
Amazon also promotes Livestream shopping and interest-based content on the app to create a social shopping experience.
Solution: The only trick here is to join the competition instead of fighting it. In addition to a well-set-up social media storefront, you can build a store on Amazon and other marketplaces to target the audience at multiple places and sell your products.
3. Limited reach
Social commerce only targets the audiences who actively use social media throughout the day, which can cause brands to miss out on targeting other demographics that aren't on social media.
Solution: To target baby boomers or people who don't particularly use social media for shopping, you can have an e-commerce store or a website to turn them into paying customers.
Boost your social commerce efforts with influencer marketing
Influencers are the key to winning at social commerce in today's fast-growing social media world. They help spread awareness and get validation for your products on social media.
Leading brands like Gymshark, Nike, and Kylie Cosmetics are partnering with social media influencers to build effective social proof. They understand the power of influencers building authentic content to create a meaningful shopping experience for customers.
For example, Gymshark, the leading fitness apparel, hosts influencer parties, get-togethers, and shoots where creators are given the opportunity to create content on the sets. They get loads of health and wellness influencers and ambassadors in one space and offer them products to create content. The brand then uses this content for its product pages to make its product look real and more authentic. Instead of a white background, the brand uses images of influencers using the product, which leads to trust in the customers.
To do the same for your brand and make your influencer campaign a success, however, you should partner with the right influencers who can connect with the audience. Influencer management platforms such as affable.ai are an effective way to find suitable content creators across major social media platforms. Besides finding influencers, the platform also helps manage the campaigns without having to switch apps and measure the effectiveness of campaigns.
Build effective social commerce strategies for your business with the right influencers. Book a free trial with our experts to learn how!