What is Social Commerce?

What Is Social Commerce?

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A currently growing trend, Social Commerce relies on social networks to facilitate purchases between retailers and consumers inside the social networks where their consumers spend time. This is an extension of how brands have previously used social as a product and brand discovery tool, leveraging social for conversion. Using reviews, ratings, sharing capabilities, recommendations, and transactional functionality to do so, and even can be plugged into some loyalty programs.

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The growth has been rapid, reporting social commerce driving global sales of $37 billion in 2021 and projected to reach $80 billion by 2023. By 2025, it’s estimated that around 37% of Americans will have purchased via social commerce. With so much potential it’s time for all retailers to consider the opportunity in their market niche.

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The Key Benefits of Social Commerce

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1. It’s a great way to increase your reach by leveraging the online spaces your potential consumers are already engaged with daily. This works especially well if you have a solid content strategy that is driving engagement on your socials through your organic content. eMarketer researched that 88% of the time mobile users spend browsing is within social apps, rather than browsers. So even if you have a flawless e-commerce site, you are missing a key opportunity to sell.

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2. Secure the conversion where the user is and increase your conversion rate by reducing points of friction. A key advantage of social commerce is the in-app transaction functionality, removing the additional steps a consumer has to take to complete the transaction on your site. Users also likely have their payment details stored within their accounts, making the conversion even smoother. A purchase can be almost as easy as tapping a Like or a Follow.

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3. Effortlessly accommodate the growing number of mobile shoppers. If your site isn’t the best mobile user experience this is an easy option to address that in the interim whilst you work on your site functionality longer term. A smooth mobile experience is an absolute must in 2023, and that’s not to get an edge, but just to meet the market expectations.

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Who Are The Key Players?

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Unsurprisingly, the key players in social commerce reflect the most popular social networks right now. The core ones for any retailers to explore are;

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Meta & Instagram: Both owned by Meta and closely integrated in the backend this is accessed through the Shop functionality, which acts as an online storefront where users can browse, explore and purchase products directly on Meta and Instagram. They have a fairly customisable collection and simple design tools, allowing you to showcase featured products.

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Like all of these platforms covered the key barrier is setting up your product catalogue. This is a very similar setup to the Google Ads product feed you are likely already using to power Shopping campaigns or Dynamic Remarketing. But setting this up is becoming increasingly easier, especially if you are running your website through a platform like Shopify, where all of this integration is built in via available apps.

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Some of Meta's top tips to drive consideration in your shop include;

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• Feature your most exciting products first to help make the most of the prime space
• Refresh your collections around seasonal moments, promotions, upcoming launches or trends that you've noticed from your followers
• Bundle related products together to showcase completed looks or compatible items

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TikTok: The social commerce capabilities on TikTok are very similar to Meta. They enable merchants and creators to showcase and sell products for the TikTok community to discover and purchase directly through a complete in-app experience. 

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After uploading (or syncing from Shopify) your product catalogue you can sell through three different streams, the scope of opportunity from TikTok in social commerce is the broadest out of the options we have covered;

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• Product Showcase: Shop directly from a brand or creator account and get access to products within the app
• Shoppable Video: Shop directly from a shoppable in-feed video by tapping the product link & basket icon
• Live Shopping: Shop directly from a LIVE by tapping the pinned products or browsing the shopping basket icon

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Pinterest: To sell on Pinterest a brand just needs to upload its product catalogue to its Pinterest business page. Inside Pinterest, you can then tag products featured in your Pins linking to the products inside your catalogue. This platform is a little different as they don’t have in-app transaction functionality, clicking on a Product Pin will land the user on the product page on your site to complete the transaction. It's not quite as seamless as the other options available, but it's still a great way to leverage your Pinterest content into a revenue-driving channel.

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Interested In Getting Started With Social Commerce?

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If you currently sell online Social Commerce is a great addition to build into your e-commerce strategy. It’s a proven trend and the key platforms show no signs of pulling back development in this area. If you are curious to understand how Social Commerce could work for your business the team at Reason can help you figure that out.

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