I personally love social commerce. To buy something I like on social media without the hassle of leaving that site and clicking off to the retailer’s website and having to search again for the product I wanted to buy, really does transform the online shopping experience. I’m not alone, there’s millions like me.
Millions of us have been working from home all or part of the last year and have been spending longer on social media, looking for escapism and outlets to brighten our day, consequently we have shopped more online than ever – a behaviour that is likely to remain. We were influenced by personalised experiences showing us ever more inspiring sites to buy from.
As a result, social commerce is booming, with the global market expected to grow CAGR of 31% from 2020 to 2027. China is not only the largest eCommerce market in the world but is leading the way with social commerce which is exploding, accounts for 13% of total eCommerce sales and is viewed by the eCommerce industry as the norm.
We know consumers use social media for ideas and inspiration; social commerce allows those passive browsers to become active shoppers. This definition from Stacey McLachlan at Hootsuite is good: “social commerce is what happens when savvy marketers take the best of e-commerce and combine it with social media.” Or in the words of Facebook at the launch of Shops, it’s “a place to experience the joy of shopping versus the chore of buying.” Social commerce is where the entire shopping experience – from product discovery and research to the payment process – takes place right on a social media platform. This can also include customer service functions as well.
Yet, there will still be a need to support consumers as they consider purchasing, to inform and reassure them. Add social proof to shoppable content and you have a very powerful proposition. Social proof helps connect consumers with others like themselves, sharing what people have bought, how they rated their purchases and creating a sense of community. Real-time aggregated customer reviews can make all the difference between a shopper making a purchase by being reassured, to bouncing off the site to seek inspiration and reassurance elsewhere. It’s fast to implement and can deliver a rapid return on investment.
Content is what is keeping us all connected right now. Sharing stories, products and ideas along with real time commentary on what’s trending gives people the context of what’s hot, what’s not, to make confident buying decisions on social media.
Social commerce isn’t new, it has been around a while and is now mainstream practice for social media brands. Facebook Shops also works across Instagram and the company announced last year that WhatsApp will offer in-app purchasing. Pinterest has a range of features to appeal to the 47% of users who visit Pinterest to find or shop for products. And TikTok has recently announced a new global partnership with Shopify that will advance its social commerce ambitions. We shouldn’t of course forget WeChat which with roughly 1.2bn active monthly users has been the leading platform for social commerce
As already mentioned, in China social commerce is already hugely popular, the US (where retail social commerce sales will rise by 34.8% to $36.09 billion this year) and Europe have some way to go but given that the big upswing in online shopping during the pandemic looks likely to stay, we expect it to catch on fast. Certainly, big brands think so. L’Oreal has taken a minority stake in US social commerce platform Replika Software. In December 2020, Walmart live streamed a one hour shoppable variety show on TiKTok, featuring content from some of the app’s most popular creators. Vogue Business reports that luxury store associates for brands such as Burberry and Valentino are increasingly using WhatsApp to correspond with high-net-worth customers, alerting them to new product drops or offers.
During lockdown, we’ve all spent a massive amount of time on social media. And while access to browse physical shops will remain limited for many people, we’re going to turn even more to social media for inspiration, and the growth opportunity of selling via these will look like a hockey stick.