The definition of social commerce, once simply understood as the entire shopping experience taking place on a social media platform, has become a little complicated. As the lines between social and digital blur, industry confusion has been exacerbated by the limited uptake of adoption. Even during the pandemic, outside of China and the US, less than 30 per cent of internet users globally have made a purchase on a social platform in 2021 (according to eMarketer), while Instagram Checkout is available to fewer than 30 global brands.
This uncertainty has caused brands to focus all their efforts and resources on building out robust, standalone e-commerce experiences instead of prioritising and investing in bringing their brand and products to life on social. But there are a number of indicators suggesting that this is the wrong move.
While I’m not saying that there shouldn’t be a site that consumers can visit to gain more detailed information or to transact, the importance of social media in the customer journey is rapidly increasing. Brands need to rapidly adjust to meet this growing demand, to focus energy and expertise on social media as the primary driver of online sales. There is evidence to suggest that the more they do it, the more effective they’ll be at addressing changing consumer needs in the long run.
The first indicator is the shift from the return-on-advertising-spend-measured conversion campaigns to purchases made as a result of influencers and creators with clout, that produce more entertaining and unique content and build demand for products faster than ever before. The obvious example is #TikTokMadeMeBuyIt, where influencers and users on TikTok are driving massive sales for products based on rudimentary demos and authentic reviews. This idea of community commerce, where social media users are exposed to products through other users, can not only drive sales but also increase retention and loyalty through shared interests and values. This makes e-commerce more about conversations, about buying into the brands you love, instead of just transactions.
The second is how the experience of shopping is changing. The pandemic accelerated innovation in this area, but we’re seeing increased demand for more interactive and streamlined experiences that allow potential customers to get closer to brands and products. Livestream shopping and shoppable video create more personalised and engaging experiences. Unlike the home shopping networks of the past, these new experiences are augmented with trusted reviews from influencers and communities that help to move more people along the journey even faster. We also know that apps like WeChat have built and scaled a native e-commerce ecosystem and that TikTok is looking to make major investments in expanding its shopping experience to match that. In China, nearly 50 per cent of people buy through social apps and, with further innovation, we could expect to see similar adoption in other markets.
The third driver is Gen Z and their shopping preferences. Social is a key channel to reach and convert this generation, but they can see through the hard sell. Polished product shots and detailed views aren’t as compelling as short videos showing the product in use, user-generated content or reviews from people they already trust. Brands must invest in social-first creative that bridges the gap between culture and commerce, that can be deployed across platforms, localised by market, at scale.
For brands that still don’t believe me, consider this:
The competitor set is changing. You are now competing with super, socially savvy Gen Zer’s who can set up a Shopify page, an Alibaba account and a TikTok profile in minutes. They are promoting and selling popular products as a side gig without investing in brand campaigns and excessive retargeting. More and different types of competitors are leveraging social media to launch their own products and services. Brands that look awkward, inauthentic or out of place on social media will see detrimental effects to their preference and loyalty, never mind their return on ad spend.
Also consider the not-too-distant future, when digital goods will increase in value over physical, offline products and services. As our online identity becomes increasingly more important and we start buying and selling products in, say, the metaverse, we will see traditional e-commerce become outdated as users flock to platforms and sellers who operate directly in their universe.
