First Comes E-commerce, Then Comes Social Commerce?
Apparently so! People have been inspired to purchase specific goods because of what they have seen on social media for years. Social media’s influence on the economy is more apparent now than ever - from partnered brand promotions to paid advertisements to random people on the internet just talking up brands they love for no other reason than sharing information.
So, what is Social Commerce? It is the capability to purchase goods from a third-party platform within the established social media experience.
“For example, you can browse and compare products on Facebook, and then make the purchase on Facebook itself instead of going to the company’s site to make the purchase,” says Shanelle Mullin from CXL, “Three social media sites that are dominating the social commerce space: Facebook, Instagram, and Pinterest.”
Though this concept first made way in 2019, with recent updates to major social media platforms, like Instagram, it's clear there is a major shift in focus for the ability for consumers to shop in-app instead of searching for a brand or clicking an external link in a user’s profile.
Like It, Save It, Buy It
Social media companies are now working similarly to online marketplaces. By connecting consumers with brands, both known and new, social commerce helps broaden customer reach. This allows consumers to purchase directly from an app they already know and love. Fewer redirections mean higher chances of completing a sale.
A Wise Investment
E-commerce and social media companies alike are investing time and money in social commerce. “Amid the COVID-19 crisis, the global market for Social Commerce estimated at US$89.4 Billion in the year 2020, is projected to reach a revised size of US$604.5 Billion by 2027, growing at a CAGR of 31.4% over the analysis period 2020-2027.” says a recent report from Global Industry Analysts, Inc. Social media’s most significant focus in recent years is to keep consumer’s eyes on their app. In the past, when consumers went shopping, social apps were losing money. According to Review42, in 2019, people spent an average of 2 hours and 22 minutes on social media. While we can assume that most of that time is taken up mindlessly scrolling or liking posts, retailers are trying to refocus that scrolling to shopping.
3 Reasons to Get Social
As previously stated, even before social commerce became a pivotal part of social media platforms, consumers used social media to influence their purchases. A study by Pixlee shows, 74% of consumers use social media to guide their purchasing decisions. On top of that, Pixlee also says that 60% of small to medium-sized businesses have gained new customers through social media. As the world is getting close to “getting back to normal,” post-pandemic shutdowns, it’s time to start focusing on ways to re-engage audiences.
Here are three reasons why your business should invest in social commerce:
Whether you are organically measuring sales conversion rates or measuring click-through rates (CTR) on paid advertisements, you can have a great return of investment (ROI) if done correctly. Though your ROI will change based on your campaign goals, reach, and dollars spent, social media companies want your business, so they want you to see an actual return on investment. No ad dollars? No problem. Organic marketing on social media may take extra time and effort, but social media platforms need your business profile just as much as those throwing money into paid advertising. Keep in mind you can use both for a higher reach. Most companies utilize organic social to engage their existing audience and layer in paid ads to find new customers or engage lost customers.
Creates Brand Awareness
Social commerce is a great way to gain brand awareness. Previously, when traditional e-commerce techniques, like paid ads or organic social content, link to specific products, it bypasses the “browsing” experience for shoppers by directing buyers to a particular page. The hope is that it will encourage them to add the item to their cart. This method results in higher cart abandonment, and no purchase follow-through. By utilizing new social commerce selling platforms, businesses can connect with consumers in ways never previously explored. This method helps reach a larger audience by allowing shoppers to explore a brand’s curated aesthetic and style. Consumers can scroll, see products grouped, and easily save products or add them to a cart to purchase. While you still need to create brand loyalty to convert customers to buyers, social commerce creates brand awareness, which develops into customer loyalty over time.
Improves Consumer Experience
A great customer experience is a sure-fire way to get new and existing customers to engage and convert sales from your shop. Not only are you promoting a brand to potential customers, but you are also inspiring trends, making it easy for shoppers to interact with your content, and helping them find new and old products in your inventory. Previously, businesses would have to capture consumer attention, then compel those consumers to click a link to shop through the e-commerce website. After that, they would have had to create a new account and insert all their information in order to complete the purchase. With social commerce, the consumer’s information is stored within the social platform, meaning that they can shop multiple brands and businesses from a single account.
Don’t be afraid to get social. By creating an interactive environment, consumers will connect your brand and merchandise with an easy, pleasing shopping experience, even if they don’t ultimately make a purchase. Utilizing social commerce gives consumers options without being pushy or overwhelming. With consumers able to shop similarly to an online marketplace, but from the comfort of an app they already know and love, customers are more likely to see new, exciting products to try.