Business evolution never stops and social commerce is a shining example of it all. Ecommerce, once considered as the impersonal, machine-driven form of shopping has become a pinnacle of social interactions. Little by little, as our lives became more and more virtualized, the impersonal became the perhaps the most intimate form of shopping.
Inevitably, social commerce has become a hot topic among online brands and merchants. It’s impossible not to ask what is the root of this trend and what kind of development we can see in the future?
What is Social Commerce?
With time, brands and businesses are getting better and better at reaching out to their clientele via social media. Not using this relationship to sell, would be a real waste of potential. In general, the term Social Commerce refers to the process of promoting, buying and selling products via social media. It includes:
- Product reviews and ratings left by users on social networks
- User-generated content featuring brand products available for purchase on e-commerce site
- Ads on social networks with CTAs redirecting the user to an e-commerce site to buy a product,
- Peer-to-peer buying and selling via Social Networks
- The option to complete a transaction without even having to leave the social media network
However, in this article, we focus primarily on the potential and viability of sales that happen directly on social networks.
Role of Social Media in Shopping Behavior
To understand the power and potential of social commerce, we first need to understand its effect on shopping behavior.
According to a recent study conducted by Pew Research Center, 82% of American consumers look at online reviews before making an online or offline purchase (often when they are actually in the physical stores). In the same way, we are more likely to buy something a friend recommended to us, whether personally or by liking/sharing it on a social network.
On the other hand, social media incite demand. The compulsion to browse through our social media feed every time with a moment to spare makes us continuously look at new products without even realizing it. For instance, looking through Insta-feed of a fashion blogger creates a subconscious desire to own the clothes. Instagram and Pinterest are particularly visually stimulating.
However, social media doesn’t just drive shopping behavior; it also drives sales and traffic. Plus, the social media shopping trend seems to sit well the with younger generations in particular, which means the number of social shoppers is bound to grow with time.
Research conducted by BigCommerce, revealed that 30% of online shoppers in general are likely to buy something from a social network like Facebook, Pinterest, Instagram, Twitter or Snapchat. It also revealed that over 50% of Millennials are likely to make this purchase as supposed to 36% of Generation X and only 14% of Baby Boomers. Given how technology is infusing itself into our everyday life, the following generations are even more likely to accept social commerce as one of their top shopping methods.
Drivers & Emerging Trends of Social Commerce
The whole idea behind Social Commerce is about bringing product discovery and purchase closer together and eliminating any remaining points of friction or unnecessary steps. There are many creative ways social networks and brands approached this idea. Below is a list of the key drivers and emerging trends that we will see shaping Social Commerce in the coming years.
The Social Buy Button
While social networks make a great job of getting shopper attention via ads, most of the time the shopping takes them elsewhere. Hence, most social networks began to experiment with in-app or on-site purchase solutions:
Instagram already offers ads with clickable CTAs. However, towards the end of 2016, the network also launched “more information” tags to enable shoppers to get more details about the product by simply tapping on the tagged items in the pic. These tagged posts also have a “tap to view” button which will bring up five tags per photo, showing the products and their cost.
When you select a product, you are able to see a detailed view of the product with a “buy now” button that redirects you the brand’s website. Even if, in this case, the purchase still happens elsewhere, it facilitates the process by guiding the shopper through logical steps.
Another way social shopping happens on Instagram is through third-party solutions like, for instance, Like2Buy by Curalate. Brands can Like2Buy URL in their profile which leads shoppers to a site that replicates the photos from the brand’s Instagram into a shoppable feed allowing brands to link to photos with the product directly.
To give you a clearer idea, below are snaps of #nordstrom Instagram profile and their Like2Buy shoppable feed:
Facebook is the most potent e-commerce contender among its social media competitors. This is mainly thanks to its extremely efficient hyper-targeting capabilities, buy buttons, and integrated Facebook fan page shop. The shop section allows brands to add product and product info, curate & customize shop inventory, communication with customers via Facebook chat, product distribution on Facebook marketplace, analytics & insights, as well as transaction without needing to leave the network (the last advantage if for US Facebook Pages only). The Facebook shop can be a stand-alone store or an extension of an online store.
Some brands still prefer to take advantage of third-party plugins to sell on Facebook. For instance, payever Facebook store, like the shop section, allows your customer to buy products on Facebook. However, you can manage, update or sync your Facebook inventory from the same dashboard as your other stores — no matter on which platforms they are based. You can also take advantage of an extended list of payment options.
The most recent attempt of Facebook to become relevant in the world of online commerce is the creation of Facebook Marketplace. The marketplace is geared less towards brands and more towards peer to peer sales. However, as mentioned above, it can also distribute products displayed in your FB shop section. At the moment, the marketplace is only available on mobile which makes shopping within your current geographic location very easy. However, the actual transaction takes place offline.
Pinterest is another social network that leads the way in on-page social commerce. In 2016, Pinterest launched so-called buyable pins. Brands and businesses can upload pins featuring products as “buyable” which basically adds a “buy it” button next to the usual “pin it.” The transaction takes place entirely on the social network via a secure checkout. Moreover, the shoppers can search for this type of pins specifically, save them and even be alerted when the price drops.
Interestingly, Pinterest doesn’t charge brands per transaction but instead charges for buyable pins similarly to PPC ads. Thanks to collaboration with big brands and by offering secure checkout options Pinterest started driving sales both on and off-site. In fact, over 5% of all ecommerce referral traffic comes from this social network. The downside is the pins are still limited to the US market.
Not that long ago, Pinterest launched a new feature called “Shop the Look” which is similar to the shoppable tags on Instagram. It allows brands to take more than one product per image. However, the newest addition to Pinterest’s social commerce features is the addition of Lens which allows shoppers to take photos of a product they like with their camera and through image recognition search for a similar product or a theme on the platform.
Video Shopping
Another social commerce trend to watch out for are shoppable live streaming videos and video ads. The most obvious example is YouTube that allows brands to include interactive CTAs making it easy to purchase advertised products. Live and shoppable videos are a great way to show off and demonstrate your product in action via video ad — this is the real competition to the usual TV ads because on social media these videos are highly targeted.
Some of the most effective examples of live video generating sales include:
- Broadcasting a Milestone Celebration
- Streaming an Online Sale
- Offering a private Q&A session
Impulse Buying Baits
Tapping into the secret of impulse buying has always been on the forefront of marketers’ concerns. Whether urging customers to immediate action directly or by offering a limited-time discount, impulse buying has always had a strong role in the shopping experience. Interestingly, our inability to resist increases the more shopping becomes part of our social media space.
As mentioned above, the instant browsing of our feed keeps us permanently desiring by reminding us constantly of the things we desire. Good examples of impulse buying applications on social media are the “buy now” buttons. However, that’s just the beginning.
Chat-driven Sales
Could something simple as chat help you sell? Well, the four top chat apps have more users collectively the top four social media platforms? Brands, social networks, as well as chat apps are starting to leverage this fact.
The largest messaging app in China, WeChat, already allows verified brands and sellers to create shops within the app. Similarly, Facebook lets sellers put “Send a Message” CTA on their ads instead of the usual “Buy Now.” When the shoppers click the button, it starts a conversation between the buyer and the brand which creates a deeper sense of intimacy than a sales page. It also fits more into natural human behavior — wanting to discuss the product and clear doubts before purchasing it. The trend is likely to grow with the invention of more and more intelligent chatbots that can handle large amounts of customers. Also, brands are developing more and more chat specific products such as unique stickers, emojis, GiFs — the trend is particularly active on iMessage.
Shared Ratings
Another persistently growing trend is shared user ratings. When a shopper shares rating of a product on his or hers social media profile, it results in a notable spike in conversion rates. Shared ratings serve as social proofs of quality and desirability of a product or brand and encourage more consumers to buy the product. They can make or break a business. For instance, in 2015, users of Yelp destroyed a pizza business whose owner refused to cater gay weddings by leaving hundreds of negative messages on Yelp. Reviews and ratings have a huge potential and businesses keep working on new ways to encourage shoppers to leave them.
User-Created Content/Products/Ads
Social media and user-created content is not the newest trend, but it’s a persistent one. Publishing and promoting shoppers who post and tag your products online has been around for some time. In fact, many businesses channel social media feed featuring their products on their item pages.
However, many brands didn’t stop with user-generated content. Some brands encouraged their customer to design their version of the product or even an ad. For instance, Doritos encouraged their fans to create Doritos ads for Super Bowl with a chance to win $1,000,000 prize for the best idea.
Collaboration creates a sense of community, strengthens relationships and more often than not leads to higher conversion rates.
Conclusion
Social commerce although still in its beginnings is on its way to becoming one of the most effective ways to sell online. Brands that are still not channeling many efforts into their social media need to start looking into ways to personalize their sales channels.
In other words, it time to bring product discovery and purchase closer together.
