Social media has been an important marketing channel since its conception and is increasingly influencing the way people shop.
Today, social platforms look poised to "close the loop", meaning users will be able to browse, shop and purchase seamlessly within one connected social media experience. This development has the potential to fundamentally transform the way we buy online.
To better understand this Initials, experts in ecommerce, surveyed a nationally representative audience of British shoppers and found that almost 2 in 3 consumers would be more likely to purchase from a brand if they could browse and shop entirely within a social media platform.
This suggests that the winners of tomorrow will be the brands that use social commerce as a real tool to attract and retain customers today. In the social world, learning how to stay afloat is no longer a 'nice to have' - if you don't act, losing market share could become a tangible problem.
The latest figures suggest that an extra £5.3 billion was spent on ecommerce last year as the effects of the pandemic forced more people than ever to go online, and initial figures suggest that this behaviour will persist post-pandemic. Social commerce is a market with a remarkable growth curve, with analysts estimating it to be worth up to $600 billion over the next seven years.
COVID-19 has accelerated the purchasing behaviour trends that we have seen in recent years, but the latest data points to an even more exciting future.
Social commerce is still a relatively new trend in the UK and some studies suggest that only 6% of British consumers buy through a purchase option on social media such as Facebook, Twitter, Instagram, and Pinterest.
In more online savvy countries like China, social commerce is an integral part of the online shopping experience. Tencent's WeChat generated $115 billion in social commerce revenue last year, and China's second-most valuable online retailer Pinduoduo allows friends to purchase together on social media through an innovative group-buying app. As US platforms try to emulate this function, China offers an interesting example of how western trade and society are likely to develop.
Shopper thinking will be crucial to navigate social commerce
Brands have a plethora of digital touchpoints through which they can interact with their audiences. Digital and social platforms are able to meet new customer expectations by redefining the shopping experience to deliver convenience and customisation, ease of use and control. And social media in particular is uniquely capable of meeting these needs.
However, Initials' research, reinforces the fact that the social dimension will remain a nuanced and highly complex channel, showing consumer behaviour across these channels is far from homogeneous. Understanding consumer behaviour (motivations and barriers) in this space and delivering on the brand experience across the entire shopper journey in a consistent way will be a key factor in maximising shop-ability across social media channels.
Initials' research suggests that the adoption of social commerce will vary by audience. There are different levels of adoption in different age groups, genders, ethnicities, and socio-economic backgrounds. For example: being able to buy within a platform would encourage 75% of 21-34-year-olds to purchase with a brand, with the percentage decreasing as audience age increases. Understanding these demographic differences at the planning stage will be critical to adoption.
Categories also differed in their level of appeal in relation to the prospect of in-platform purchases. The research suggests that big-ticket items like travel and luxury are much less popular as categories for social media purchase than more affordable items. Price, therefore, becomes a major factor in whether someone would shop via social media. There are various drivers to this, one being trust in the platform, which one might anticipate being less of an issue as the channel becomes more embedded over time as a part of the online shopping experience.
Overall, the results are consistent with the fact that ecommerce channels are growing, but they also show the need for intelligent planning. It will be critical for brands to understand the importance of activating social commerce strategies in their business models, marketing strategies and social media strategies. Understanding where, when and how to activate a social commerce strategy, as part of a connected shopper experience, will be key as we move ahead.
Social platforms at different levels of readiness
Each social platform is currently at a different level of readiness in terms of social trade. For example, Instagram is already testing an in-app checkout feature that allows users to search and shop directly within the app. The mass adoption of this feature will transform the way people shop online for brands, allowing direct purchases from both brand and influencer posts. It will make the social shopping experience on Instagram effortless and seamless from discovery to purchase.
"YouTube Shopping" allows customers to shop locally by browsing vendor catalogues, while TikTok's partnership with Shopify allows merchants to create and display merchandise on the platform. The introduction of "shops" on Facebook allows brands to present digital storefronts so customers can buy products via retailers' websites or directly via Facebook.
Instagram feels like a natural fit for retailers, as its highly visual nature mimics glossy magazines where products look and feel at home - particularly those that are high-end. This is confirmed by Initials' research, which shows that almost half of shoppers (45%) would rather shop on Instagram and with Facebook also a strong contender (41%). At present, the two platforms seem to be way ahead of the game versus YouTube (9%) and TikTok (5%) who are lower down the ranking in terms of shopper interest.
Social commerce is a particularly exciting development for brands that sell exclusively through retailers. This is because it provides an opportunity for shoppers to access a wider range of their products and services and for them to personalise the brand experience, particularly where a D2C offering is not in place or feasible.
Facebook advertising (which includes Instagram) and Google (YouTube), also offer ways to personalise and disrupt shopper journeys, through the sophisticated targeting it offers brands. Josh Tilley from Initials spoke to Joseph Harper, Ecommerce Marketing Manager at Kellogg Company, who notes "The way people shop in the future will be totally different – it will be completely interactive and personalised. We know that retailers are starting to see themselves as media platforms and media platforms are starting to see themselves as retailers. That, in essence, is the crux of social commerce."
Creating a connected experience for consumers
Ecommerce has lowered the barriers to entry and allowed new digital start ups to take the stage, forcing old brands to rethink existing strategies. Social is poised to shift the goalposts too, challenging the traditional dominance of the retailer in their ownership of the shopper. As a marketing channel with significant benefits, social commerce is likely to have a significant impact on the way shoppers discover, browse, and buy.
Whether it's researching Amazon, getting inspiration on Instagram, watching ads on TV, or unwrapping an order at home, there's an ever-growing ecosystem of places where shoppers can engage with brands. Brands need to build a connected experience at every touchpoint to reflect the values of this new generation of buyers. For future-oriented brands, success will be more than just using new platforms and innovations.
Marketers must focus on optimising the customer journey, with social commerce seamlessly integrated within this.
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