E-commerce is the online giant that continues to grow. Many of us shop exclusively online now, and this is a trend that shows no signs of abating.
While e-commerce continues to grow, there is one area of online that offers the most scope for expansion. Social media is the global community of the online world, with the new number of active users growing year on year, and provides unprecedented reach and targeting options for brands and marketers.
However, while social media has proven effective for raising awareness of products and driving engagement, the true potential of social media as a shopping channel has yet to be fully realised.
For most online shoppers, social media serves only to drive awareness and consideration, with the final purchase being made elsewhere. A recent study, for example, found that less than 50 percent of Facebook users had bought a product after clicking on a link, while more than 80 percent of Generation Z and 74 percent of millennials say they are influenced by social media sites in their shopping habits.
The meeting point between e-commerce and social media is known as social commerce. In this article, we will explore the nature of social commerce and some of the features already in use by the major social media platforms allowing brands to drive sales on social media.
What is Social Commerce?
Social commerce is a relatively new phenomenon, borne of the pressing need to streamline the online shopping experience for social media users.
The aim of both brands and social networks such as Facebook, Twitter and Instagram is to bring the functionality of an e-commerce site directly into their social channels. This will enable users to complete a transaction for, say, a pair of shoes on Facebook, without ever having to leave the Facebook app.
With 34 percent of people having never bought anything on social media, social commerce is currently in the early stages of development, and there is a balance to be struck for social media platforms in terms of the experience they provide for the users, and the functionality they provide for brand hoping to sell to those users.
Nevertheless, a social media platform which offers fully functional social commerce capabilities could be a game-changer for e-commerce brands. With fewer steps in the transactional process, conversion rates will go through the roof, leading to greater revenue for brands, and more ad revenue for the social platforms.
Features of Social Commerce
Social media is currently the destination of choice for consumers looking to discover new products, with 81 percent of UK consumers claiming to have purchased a product after seeing it first on social media. To reinforce the point, a study by Facebook IQ revealed that as many as 52 percent of fashion consumers in the UK research products on Facebook and Instagram before purchasing. With so many eyes already engaged with products on social media, the opportunity for social shopping is huge if the transactional barriers can be overcome.
The major social media platforms are keenly aware of this opportunity, and are currently competing with one another to provide the optimal social commerce experience for their users. We take a look at some of the social commerce trends below:
The first foray of social media platforms into social commerce was the simple ‘Buy Now’ button. The ‘Buy Now’ button is more of a cosmetic overlay, rather than a genuine social commerce feature, however, serving as a CTA which links out to the advertiser’s website.
With the continued rise in popularity of story type posts on Facebook, Instagram and Snapchat, some platforms have created ‘shoppable posts’. These stories allow brands to tag specific products which appear within the story.
At the end of the story, the user is invited to ‘Swipe Up’, revealing the products tagged within the story they have just watched. This is an innovative method of capitalising on the high levels of engagement on platforms such as Instagram, and providing users with the opportunity to capitalise on their interest in the products they have engaged with.
Instagram is a leading innovator in this space, with their latest ‘checkout’ update allowing potential customers to make a purchase from a post or story without even leaving the app.
Snapchat is known as the platform of choice for millennials and generation Z, but has not been widely adopted as an advertising channel as yet. However, Snapchat now have their own version of shoppable posts, and have also partnered with e-commerce giant Amazon to scan physical objects in the app, with brings up product info, pricing and a link through to the Amazon page where the product can be bought.
The drive towards social commerce also opens up new opportunities for third-party developers, with some companies devising innovative ways to drive social media engagement into sales. One of the most inventive approaches has been created by Soldsie, a third-party app which works with Facebook and Instagram. Soldsie allows users to make a purchase simply by commenting ‘sold’ on a social media post. Soldsie then emails an invoice to the user, allowing them to complete the payment.
While social commerce is still in a relative stage of infancy, a study by Gartner reveals that uptake of social commerce features is growing exponentially, with 66 percent of brands surveyed claiming to have used social commerce features within the last year.
There are still barriers to be overcome if social commerce is to achieve widespread adoption, however. The greatest obstacle adoption is arguably that of payment. For a transaction to be completed, potential shoppers must be able to complete a monetary transaction without leaving their social media app. Once again, Instagram is leading the way here in terms of innovation, with Instagram users now able to register a credit card to their profile, opening up the potential for in-app transactions. However, perhaps the most promising step forward for the adoption of social commerce is Facebook’s controversial crypto-currency Libra. If Facebook are able to make a success of the currency, it will instantly become the app of choice for social commerce, with users potentially able to use Facebook own currency to buy products without having to leave the Facebook app.
To help define your social commerce strategy, contact digital advertising specialists Clark St. James on 01603 343477 or firstname.lastname@example.org. Our team delivers a scalable return on investment for e-commerce companies across the major search and social media advertising channels.