Social Commerce: The Next Big Thing For Retail
Social commerce is a term that is relatively new to the RetailTech landscape while being one of the most promising sub-sectors of eCommerce as of…
Social commerce is a term that is relatively new to the RetailTech landscape while being one of the most promising sub-sectors of eCommerce as of today, reshaping the industry. So, you may be asking: what exactly is social commerce and where did it come from?
What is social commerce?
Social commerce originated from a very crucial, yet often overlooked, pain point in the customer experience specifically on social media. How many times have you (as a user) scrolled through your favourite social media platform, tapped on the product listing, and been redirected to the sellers’ website only to just jump back onto the app and keep scrolling?
Scrolling through posts on a social media platform was and is the users’ main interest and so, the possible purchase was, and always will be an addition, rather than the reason for the social media usage. Meanwhile, as an advertiser/seller, having a feature that keeps users on the same domain is essential. Social commerce has solved this pain point by introducing shoppable ads & posts that keep the users on the same social media platform where they first saw the product.
Where does social commerce come from?
Back in 2007, Facebook was the first platform that started researching this market sector. Fast-forward to 2014, Facebook users could purchase products directly on the platform. By 2018, Facebook introduced its own marketplace that grew enough to compete with leaders such as Amazon and eBay. With the acquisition of Instagram by Facebook, Instagram started implementing shoppable ads too, which was an even bigger success. This is because the platform based its success on immediacy; having its focus on visual content rather than text-based content, the implementation of quick purchases directly on the app was inevitable as the nature of the trend is perfectly in line with the nature of the platform.
In addition, it is important to note the fact that social commerce is an emerging trend because it is in line with the tendencies of the users of social media platforms. A good example of this is TikTok and Instagram. These two demographics tend to have fast-paced shopping experiences because advertisers realized that making the buying process as seamless and fast as possible guarantees conversions.
Why is social commerce working, and what is the future of this sub-sector?
Social commerce taps into the quick excitement users have for products they see on social media and aims to fulfil their desires immediately. Furthermore, compared to traditional eCommerce, the experience is much more interactive, and shareability features on social media apps make shopping a collective experience.
We’ve put together a short list of reasons why social commerce is a growing trend in 2022:
Cutting straight to conversions
With social commerce, the customer journey map is direct and straight to conversion: users are on social media, they see the product, they click on it, and make the purchase. Traditionally, every step in the buying process online is an opportunity for users to change their minds.
A profitable market
Social commerce is a fast-growing market, it generated $724 billion in revenues and it is estimated to grow 30% more by 2030. In Europe alone, the market is expected to reach an evaluation of US$67, 203.7 million by the end of 2022. In addition, 81% of e-shoppers reach products through Instagram, Facebook, or TikTok.
Social commerce is not only profitable but also serves as an instant gateway to collecting feedback on products and services in the comment sections of the posts. Not to mention the possibility to receive and send instant messages directly to the customers, a feature only available on social media. This proximity to the audience also enables the creation of a highly categorized audience as social media platforms connect different customer niches.
When selling to Gen-Z & Millennials social commerce is key
When talking about the audience it is impossible to leave out the fact that if the target demographic of a business sits in the 18-35 age range, social media should be the primary channel for sales. It is estimated that nearly half of the internet users in the United States within this age range have purchased at least one item on social media.
Waterfall effect of tech innovation
The RetailTech industry is growing daily, however, every subsector is intrinsically connected with the others. Social commerce draws its strength from the implementation of new technologies in other branches of RetailTech. Thanks to advancements in Last-Mile Delivery, social commerce products can reach customers even faster now. Not to mention the fact that the phenomenon of headless Commerce is in part responsible for the massive success of social commerce. Social media offers a great space for advertisers, in particular, retail media is thriving currently, thanks to the rise in popularity of platforms such as Instagram and TikTok. Naturally, every platform has its unique perks, and this leads to different implementations of social commerce.
Know your social media to know your social commerce strategy
The big names in the industry are Instagram, TikTok, Snapchat, and Pinterest. All of them have a different application for social commerce: Instagram offers a native shopping solution with its built-in marketplace. TikTok offers in-feed ad-ready videos, ad-based live streams, and product showcase tabs. Meanwhile, Pinterest offers the possibility to purchase pins and create “Product Pins” that connect the customer directly to a checkout page. Lastly, Snapchat is currently experimenting with a beta version of a native store, powered by Shopify, which will include Brand Profiles where users will have displayed products sponsored by said brands directly into a marketplace.
In conclusion, social commerce allows brands to reach and sell to users directly on social media. Social media platforms offer a great way for users to discover products, streamlining the shopping experience. It is quite clear that allowing users to click through to checkout without leaving the social media platform is a very effective solution for conversions.
Storm5 Is Here For You
Understanding which social platform and how to implement social commerce is becoming more important than ever for brands online. Investing in this solution could be the deciding factor for the success of a brand. We, at Storm5, want to help businesses achieve a high level of success. We are a specialized recruiter dedicated to working with the best companies in the RetailTech and eCommerce industries. Storm5 is here to help you find the right senior talent for the right specialism, whether you are a start-up or planning to scale up. Get in touch if you are looking to grow your team.