At the Pull Agency, we’re excited about the evolution from traditional e-commerce to social commerce. This exciting new era of retail is only just starting, so read on to get up to speed with social commerce – what it is, how we got here, the benefits and strategies to implement now.
What is social commerce?
It might surprise you that social commerce is not a new term. In 2005, the concept was introduced on Yahoo’s Shoposphere, with a feature that allowed users to comment and review product lists. Yahoo’s vision was that a community of shoppers could offer insight and knowledge on products. While Yahoo fell behind to the other social media giants, they were ahead of the game on social commerce. However, the concept didn’t really gain momentum until 2014, when Facebook allowed shoppers to purchase directly through the platform.
This initial definition of social commerce has evolved with the advent of social media. Now, social commerce is not just a community of shoppers sharing advice and reviews with other shoppers. It now has a far bigger reach than initially envisioned, enabling virtually anybody connected to a social media platform the chance to buy through the platform based on a friend’s recommendation, a paid ad, influencer content, etc. To show the scale of this, in 2022, it is predicted 33% of users will make a purchase on Facebook.
Why is social commerce only taking off now?
We have two converging themes going on to make this moment perfect for social commerce. In the UK, there are a whopping 57.6 million active social media users. These digital users are also shopping online – 2021 figures show 29% of all UK retail sales were made online.
It’s no wonder social commerce is a fast-growing subset of e-commerce, and is expected to increase exponentially from $492 billion globally in 2021 to be a $1.2 trillion industry by 2025. Forbes coined this, ‘the next global shopping revolution.’ This will largely be driven by Gen Z and millennials, who are expected to account for over 60% of social commerce spend globally by 2025.
What are the benefits of social commerce?
Social media benefits businesses big and small, because it gives you the opportunity to build a brand, reach people across the world, and drive revenue with the right advertising and influencer strategies. Oh, and of course sell directly with social platforms… social commerce.
A major advantage of social commerce is that it makes it easier for people to purchase, lowering friction by reducing the steps in a sales funnel. For example, if a purchase is all made in Instagram, it makes it easier for the consumer by not needing to go to your website, navigate to the correct page, deal with page loading times, etc. This will increase one-off purchases.
Social commerce allows brands to simultaneously drive engagement and increases social proof. The consumer will become less reliant on finding reviews on your website if they see high engagement rates and credibility on your social media page instead.
Another great benefit is having influencers use your products and speak about them. Not only does this increase authenticity, but will allow your brand to reach the right people, showcase your products in a way you want to be seen, and allows you to sell through social validation. This could cost you as little as sending a few products to paying their sponsored content rates.
Social commerce will make tracking and creating audiences on platforms easier, especially in a post iOS14 world. Since the iOS updates that Apple made in 2021 it has made tracking users website visits or page views a lot harder. In fact, the iOS update has caused about a 15% underreporting in conversion data. As a result, tracking conversions made with an e-commerce store has become more difficult to get the full data picture.
As social commerce conversions happen within the platform, there’s no restrictions on tracking and you’ll get better data again! With all this wonderful data, you’ll be able to see what is truly working well, so you can scale it, and you’ll be able to create better audiences of people to remarket to.
Are there any downsides to social commerce? How can good strategy actually combat this and drive revenue and customer retention?
Whilst it is good to have social engagement as a driving point for sales, with higher ticket items or items that often have a longer sales nurturing period rather than an impulse purchase, social commerce doesn’t offer a sales page like you’d have on a traditional sales page. However, having good social content that explains and educates people about your product can help combat this issue.
Additionally, people might add less to the cart as they might not see other recommendations or upsells on your website. However, you could send additional samples to your customers when they purchase to experience other products, include incentives for re-purchases, have an email go out when someone purchased through social commerce to encourage additional purchases. And whether it’s your own content, or content created for you by influencers and other partners, featuring and tagging multiple products within the content rather than just single items can ensure you’re maximising opportunities to upsell.
And, once you’ve got people buying for the first time off social commerce, as long as you have good retention strategies in place you should be able to harness this into repeat orders.
What makes for good social commerce strategy?
For social commerce, you need to have a robust social strategy that includes good quality content that is engaging and gets people wanting more, content around educating people on the products, the right influencers for your brand – they don’t have to be the mega influencers will millions of followers, they just need to be the right ones for your brand (see our blog called ‘Why Brands Are Investing Even More In Influencer Marketing')
Plus, let’s not forget, paid ads to get more eyeballs to the brand page, increase targeted people seeing your content, and increasing your remarketing audience size. And of course, you will need a product feed tool to connect your social content to a payment method…so you can get paid.
It's crucial to pick the right social platform for your brand and products. If your target consumer is Gen Z, TikTok might be best, while Instagram works well for millennials. It’s best to do a deep dive on your current data, and see where your buyers come from and where they buy, instead of making an emotional decision on what platform you think you want to be on. Don’t get attached to TikTok if the data actually suggests Facebook is where your buyers are… as with all digital marketing, continuously test, optimise, and scale what works.
Social commerce requires a strong organic content plan. Use your social media channels to educate, entertain, and engage people as you want it to be the one-stop-shop for consumers to make a decision to buy without needing to visit your website.
We’re really just at the start of social commerce. E-commerce is on an upward trajectory, accelerated through the pandemic when, depending on where you lived, bricks-and-mortar stores may have closed temporarily and pushed people online.
With global consumers now spending an average of 2 hours and 27 minutes per day on social media and 54% of social media browsers do so to research products AND are 71% more likely to purchase when referred by social media, there is no better time to get started.
Social media platforms will continue to bring out easier tools and features to make it easier to buy on the platform – as they also would rather their users stayed in the app rather than left to shop on a website.
These forces will act as a self-fulfilling cycle, whereby people get used to engaging with a brand’s content on social media, buying within social media, providing social proof on social media, and ultimately bringing in new buyers or repeat customers. Why not implement social commerce to your brand’s strategy when this is in its infancy, rather than wait until it’s a much more difficult strategy to start and your competitors have beat you to the game?
Posted 27 May 2022 by