What is social commerce?
E-commerce + 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 – all without leaving their social media app.
With global internet users spending an average of 2 hours and 27 minutes per day on social media channels, it’s easy to see why more and more brands are focusing their marketing strategy on not just social media marketing, but on social commerce. Brands realize that they need to optimize their digital marketing and 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 do their online shopping, making social a critical sales channel.
Social commerce is expected to skyrocket over the next few years. According to Accenture:
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.
Why social commerce?
Social networks like Facebook, Instagram, TikTok, and Pinterest all offer social commerce features and functionality that not only enable product discovery but also allow users to make a purchase while scrolling through their social media posts and reels. The quick and easy process encourages snap decisions and streamlines impulse buys. Understandably, this is the reason why low-priced items perform best on social stores and shoppable posts.
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 platform customer journey with the path to purchase on traditional e-commerce:
Route 1: The e-commerce path
An e-commerce experience is likely to take place on a website, online storefront, 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 for brand awareness and to drive customers to landing pages or product pages, product descriptions, and ultimately the e-commerce website’s online store. After reaching the e-commerce site store, the customer usually encounters additional steps before checkout when they complete or abandon their purchase.
Route 2: The social commerce path
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. This route takes advantage of both social proof and hashtag reach, and offers a process that is seamless and frictionless. Then within a quick tap, users are back scrolling through their social app 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 this demographic will account for 62% of global social commerce spend by 2025.
Influencer marketing
With all the increased online activity, brands take advantage of this user-generated content, or UGC, by partnering with the most popular and active users to promote their products through user posts and reels on Facebook, Instagram, TikTok and other social platforms. These influencers offer a way to gain access to potential buyers who curate their content feeds, so users can discover new products while enjoying the content they’ve already chosen to follow.
Live commerce: QVC for Gen Z
Mixing commerce and entertainment, livestreamed shopping events help brands connect with their audiences and potential customers on a deeper level. By partnering with relevant influencers to create fun and interactive livestreamed video sessions, brands can sell products by engaging with their target audiences in real time, answering questions, hosting product launches, and helping their audience make in-the-moment purchases while watching the live event on social media.
China is achieving new levels of customer engagement, 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 livestream, 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. In one day, total sales amounted to roughly three times Amazon’s daily sales.
Globally, the social commerce trend of live shopping looks set to continue on an upward trajectory. Sales initiated through live commerce are estimated to account for 5% in the US and 20% of all e-commerce by 2026, according to McKinsey.
The bigger picture: The benefits of social commerce
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 in order to optimize the customer journey across all channels, you can deliver authentic and meaningful customer experiences at every touchpoint that build trust, loyalty, and affinity.
Discover more about omnichannel marketing and its role in delivering exceptional CX or find out how omnichannel individualization is helping brands drive sales, customer loyalty, and higher order values.