What first began as online advertising and influencer marketing has developed into a multi-billion dollar business that is only growing. As business evolves, so do the average consumer behavior and buying patterns. The onset of the pandemic has led to a drastic shift in consumer behavior in a rapid time frame.
While Gen Z was naturally accepting of online shopping as they wanted unique and sustainable options, we now also have older generations accepting online shopping as a legitimate option. Of course, some credit also goes to COVID-19 as no brick and mortar shops were available during the lockdown. Additionally, research has also shown that, on average, users like you and I of the age group 16-64 spend 6 hours and 58 mins on social platforms giving birth to a whole new form of shopping now termed “Social commerce.”
30% of eCommerce companies are already selling on social media, and 12% plan on selling through social media platforms in 2021. (Statista, 2021)
Social Commerce can be defined as buying and selling goods over social media platforms. It also involves other marketing activities like advertising, consumer interaction, etc. In the contemporary world, it isn’t easy to find someone who does not have an account on any social media platforms, making it ideal for brands to find their prospective customers on such media.
Social commerce falls under the umbrella of e-commerce. It describes how merchants sell products directly through social media platforms allowing potential customers to browse, interact with brands, and purchase the goods. It is now a growing phenomenon because it will enable customers to directly checkout from the social media app without switching apps. The statistics and prediction all point to the same thing, and it is Social Commerce will soon be the future of eCommerce. It is a heads-up for brands to start investing in their social profile to enhance sales and get ahead of the competition.
98% of consumers plan to use social or influencer commerce in 2022.
Why is Social Commerce a Growing Trend?
Previously, B2C companies aimed to sell online always opted for their websites or sold their products on platforms like Amazon and eBay, using the traffic from such sites to sell their products. Today, with almost 3.5 billion active users on social media platforms, each owns an account on at least 3-to four different platforms. These users spend 142 mins every day scrolling through the various apps. It was recognized as an untapped market and a massive opportunity for businesses to leverage social media to enhance sales. The huge shift of daily consumers spending more time on social media platforms has opened up a new market segment for businesses looking for potential consumers. The power of social media can be harnessed with the appropriate tools and skills by any marketer to increase the sales of their products.
In 2020, there were 80 million American social buyers( an increase of 30% from the previous year).
So what Makes Social Commerce a Success?
In theory, social media is a place to advertise your products, but marketing has evolved to make it a tool to convert this platform into delivering better click-through rates and boosting sales. In short, users no longer have to visit the ecommerce site and can make the purchase directly from the social media page.
Let’s take an example; if you notice on Instagram: some business pages, specially b2c, say a jewelry brand with an Instagram page. Usually, you follow such a brand, or it shows up in your ads while scrolling right below the ad is a CTA that allows you to visit a page or website. By clicking either of these links/ buttons, you are directed to a page within Instagram where the catalog shows up, and you can “add to cart” or checkout. Thereby completing the entire buying process within seconds.
The social commerce market in 2020 was projected to be $89.4 billion. The future prediction for the next seven years is to grow up to $604.5 billion. By 2025 it’s estimated to reach $790 billion.
What are the Social Commerce Trends for 2022?
- Creating user-generated content: this costs nothing but gets you a lot of eyeballs! Builds trust and allows customers an online brand experience by directly interacting with the brand. Best example: Wendys responding to tweets.
- Increase the use of chat commerce:
Reach customers via chatbots, WhatsApp messaging, Facebook, and WeChat. It acts as an online customer service option for the business, allows you to speak with potential customers, answer their questions, and improves your customer service department.
- Customize your social media shop
For example, the Facebook shop is customizable and simple to build and set up. You can set up your ecommerce business in just a few clicks, and bonus, it is compatible with Instagram! Note that you need to link a website to create a checkout page.
- Rising Influencer marketing
Five years back, TikTok was tagged as the next big influencer platform allowing TikTok influencers to cash in on their viral content. Today these influencers are paid vast amounts of money by large brands to promote their products on TikTok and related social media platforms.
To keep up with the new target audience and retain their customers from switching to other platforms, social platforms like Instagram and Facebook now had to brainstorm new ways of maintaining both influencers and brands.
It led to the creation of two things
- Reels and short videos to match the shorter attention span customers now projected
- Creating shoppable posts to ensure customers do not leave the platform. Now you can book appointments, place orders, or give a call to the shop owner, all from Instagram or Facebook.
These two aspects now help influencers improve their reach, and brands use social media platforms as omnichannel that help them reach their target audience.
Consider building your profile on various social platforms for diversity without stretching yourself too thin. You need to gauge and scan where you are most likely to find your customers. Plan this by looking at demographic data and analytics that help you understand your buyer portfolio.
B2b, direct to customer (D2C), affiliated marketing, and omnichannel is now the prime focus for brands striving to grow in a new digitally global market. Consider omnichannel as a solar system where multiple different channels revolve around one singular planet, “the brand” all are connected and orbit in the same space, and changes or improvements in these areas directly impact the brand.
The blog has discussed in great lengths about the importance of social commerce and its relevance in the modern world. It is now up to the brand to stay ahead of the curve by investing in digital expansion, i.e, social commerce.