With global internet users spending an average of 2 hours and 27 minutes per day on social media, it’s easy to see why more and more brands are focusing their marketing efforts on social commerce. Not only do these brands realize that they need to show up for their customers on the platforms where they spend most of their time, but they also understand that social platforms are where customers now want to shop.
Social commerce is expected to skyrocket over the next few years. According to Accenture’s recent report Why the future of shopping is set for a social revolution, the global social commerce industry is set to grow three times as fast as traditional e-commerce, from $492 billion in 2021 to $1.2 trillion by 2025.
What is social commerce?
E-commerce x social media — in simple terms, it’s when social media users discover brands, products, and services, add products to their shopping carts, and complete their transaction without leaving their social media app. Facebook, Instagram, TikTok, and Pinterest all offer features that allow users to make a purchase while scrolling through their social media posts. The quick and easy process encourages snap decisions and impulse buys. Understandably, this is the reason why low-priced items perform best on social stores.
Rerouting the path to purchase
Social commerce may be considered a subset of e-commerce, but for mobile-first consumers, the paths to purchase play out very differently when we compare a typical social commerce customer journey with the path to purchase on traditional e-commerce.
An e-commerce experience is likely to take place on a website or branded app, which consumers access via a desktop or mobile device. Paid ads, social media, and CRM campaigns act as top-of-funnel tactics to drive customers to the online store. After reaching the store, the customer usually encounters additional steps before completing or abandoning their purchase.
Instead of redirecting customers to an online store, social commerce brings the store to the customer – removing unnecessary steps and allowing the customer to check out directly through the social media platform. The process is seamless and frictionless – within a quick tap, they’re back scrolling through their social feed.
Who and what is driving the rapid growth of social commerce?
The rise of social commerce goes hand in hand with the global increase in social media usage. Essentially, people are shopping where they are spending most of their time online. Growth is being driven by Gen Z and millennial consumers – forecasters say they will account for 62% of global social commerce spend by 2025. Product-wise, accessories and apparel along with cosmetics, home décor, and consumer goods currently generate the most revenue for brands.
Live commerce: QVC for Gen Z
Mixing commerce and entertainment, livestreamed shopping events help brands connect with their customers on a deeper level. By partnering with relevant influencers and creating fun and interactive livestreamed video sessions, brands can engage with their audiences in real time, answer questions, host product launches, and help their audience make in-the-moment purchases, all while watching the live event on social media.
Right now, China is leading the way in terms of live commerce events – and for the brands involved, the rewards are sweet. During a Singles’ Day-related shopping event in October 2021, two of China’s most influential live streamers, Li Jiaqi and Viya sold $3 billion worth of goods on behalf of Alibaba-owned Taobao shopping platform and top beauty brands including L’Oréal, Shiseido, Estee Lauder, and Guerlain — in one day, total sales amounted to roughly three times Amazon’s daily sales.
Globally, live shopping looks set to continue on an upward trajectory. McKinsey even predicts that it will become an e-commerce mainstay, estimating that sales initiated through live commerce will account for up to 20% of all e-commerce by 2026.
The bigger picture
There’s no denying that social commerce represents an exciting and fast-paced future. But if we zoom out and look at the bigger picture, an even more valuable opportunity awaits. For brands to succeed in engaging and retaining social commerce customers in the long term, an omnichannel approach is key. By getting to know your customers and optimizing the customer journey across all channels, you can deliver authentic and meaningful customer experiences at every touchpoint that build trust, loyalty, and affinity.
Get future ready with Sitecore. Discover more about omnichannel marketing and its role in delivering exceptional CX or find out how omnichannel individualization is helping brands drive customer loyalty and higher order values.
Fiona Hilliard is a Content Marketing Manager at Sitecore. Connect with her on LinkedIn