Social commerce is revolutionising e-commerce, creating a fluid online shopping journey and offering a plethora of opportunities for businesses, irrespective of their size. In this article, we will delve into the essence of social commerce, unpack its practical operation, and discuss how businesses can harness its potential.
What is Social Commerce?
Social commerce, also known as social shopping, is a specific type of e-commerce. It is the intersection of social media and online shopping, and occurs when a buyer makes a purchase directly on a social media platform. A modification of this is when a buyer clicks on a link on social media that takes them to the brand’s website to make a purchase.
Social commerce takes full advantage of posts or videos from popular social media personalities and the process of stumbling upon or discovering new items. It uses digital-payment systems such as PayPal, debit and credit cards, as well as Apple or Google digital wallets, to offer a simplified shopping experience for buyers. TikTok, Facebook, Instagram, Twitter and Pinterest each have functionality that supports social commerce on their platforms.
Current Focus of Social Commerce: Consumer Sales
In 2022, the total value of B2B sales in the UK was £1.7 trillion, exceeding the £1.3 trillion value of B2C sales. Furthermore, a significantly larger proportion of B2B sales (32%) occurred online compared to B2C sales (24%) (1). The higher prevalence of B2B online sales can be attributed to the rise in digital transformation within the sector, the convenience and efficiency of online bulk purchasing, the ease of reordering and subscription services, and the geographic flexibility offered by e-commerce.
Social commerce is more prevalent in B2C markets compared to B2B markets due to the nature of transactions. B2C transactions are typically smaller and simpler, reducing the risk for consumers. As a result, selling products on social media platforms becomes easier for businesses. Currently, social commerce is primarily focused on clothing, homewares and accessories. However, it is certain that its scope will expand to encompass a wider range of consumer sales and also extend into business-to-business markets.
Social Commerce Presents Business Opportunities for SMEs
Social commerce as a proportion of total e-commerce sales is currently around 18%, and is predicted to rise to 25% by 2025 (1).
Although it has been present since the mid-2000s, social commerce saw a rapid increase in use and evolution during the COVID-19 pandemic. According to Accenture (3), social media is growing three times faster than traditional e-commerce. In the US, nearly half of all adults bought something through social media in 2021 (3).
Meanwhile, the demographic of social shoppers is younger. While 36% of all internet users made a social purchase in 2022, 51% 18-34 year olds made a purchase directly on a social platform (1). This means brands that sell to this age group will be increasingly expected to provide social purchase methods or risk losing sales and market share. Another key market segment is parents with children under the age of 18, 81% of whom indicate an interest in social shopping (5).
What does this mean for SMEs in the UK? While the prospect of preparing for a market that expects the provision of social commerce options might feel intimidating, the exciting news is that social commerce is opening up new, accessible opportunities for businesses of all sizes.
Several platforms, primarily TikTok, but also Facebook and Instagram, are shaping this industry, each providing unique ways for businesses to engage with their customers. For instance, Instagram and TikTok are proving particularly influential, with their ‘Shop Now’ features enabling businesses to sell directly to customers. Also, platforms like these can be leveraged with little cost, making them a feasible and affordable digital marketing tool for businesses on a budget, or those who want to experiment with new marketing channels.
Integrating Social Commerce with Overall Marketing Strategy
Integrating social commerce strategy with the overall marketing strategy will create a seamless and effective customer journey. Consider these points to enhance integration:
- Align Messaging: Ensure that the tone and messaging used in social commerce efforts are consistent with other marketing channels to reinforce brand identity.
- Cross-Promote: Leverage different platforms to cross-promote social commerce initiatives. For example, promote social media-exclusive offers through email marketing.
- Targeted Content: Tailor content based on customer data and behaviour to create personalised experiences that resonate with the audience.
- Measure the impact of activity: Implement a system to track the impact of social commerce on overall sales and customer acquisition. Attribute sales accurately to each marketing channel.
- Test and Iterate: Continuously test and refine the social commerce strategies to identify what resonates best with the audience and aligns with broader marketing goals.
Security and Trust in Social Commerce
Users of social commerce often worry about trusting sellers (5). Their main concerns include the safety of their purchases and whether they can get refunds. They also doubt the quality of the products and the reliability of sellers on social media platforms. Furthermore, they are hesitant to share personal financial information due to trust issues. Building trust and ensuring security are paramount in social commerce.
Crafting Engaging Social Media Content and ‘Product Discovery’
By using social media to showcase products to browsing customers, businesses can creatively capture their attention.
Optimising social media content for e-commerce is critical. At Mason Analytics, we assist SMEs in crafting compelling content that resonates with audiences and prompts purchases. Understanding content generation and product discovery is vital for SMEs seeking affordable digital marketing solutions. Product discovery is when consumers find appealing products they didn’t know they wanted.
To boost product discovery, SMEs can employ varied content formats such as text posts, images, videos, or live streams. Additionally, user-generated content (UGC), like reviews and unboxing videos, serves as powerful social proof that resonates with consumers and drives sales.
Consumers prioritise authenticity, relatability, and seamless shopping experiences. Embracing these trends and utilising affordable digital marketing strategies, such as strategic content generation, empowers SMEs to thrive in the world of social commerce.
Consumers today value authenticity, relatability, and immediacy. They prefer narratives over hard-selling and expect seamless, interactive shopping experiences, such as the examples of shoppable posts on Instagram below.
SMEs understanding these trends and using affordable digital marketing strategies, like strategic content generation, can drive product discovery and navigate the world of social commerce effectively.
Uncovering Consumer Behaviour Insights
Social commerce offers businesses the opportunity to grow sales, but also plays an important role in shedding light on the psyche, preferences, and behaviours of the modern buyer. Let’s explore the five ways in which social commerce provides businesses a magnified lens into their customers:
- Improved Customer Engagement: Social commerce platforms enable businesses to communicate directly with customers. This direct interaction can lead to a deeper understanding of customer needs and preferences. For instance, an increase in customer interaction on a specific product post may suggest a growing interest in that product.
- Data-Driven Insights: Social commerce platforms generate vast amounts of data. For example, businesses can track which products are viewed most frequently, which ones are shared, added to basket, or purchased. This data can help businesses understand customer buying behaviours and identify emerging trends, allowing for personalised marketing efforts and smarter inventory management.
- Real-Time Feedback: Unlike traditional commerce, social commerce allows businesses to receive instant feedback. Customers can leave comments or reviews immediately after viewing a product or making a purchase. This real-time feedback is valuable for businesses to understand customers’ immediate reactions to products or services, helping them make swift adjustments where necessary.
- User-Generated Content: On social commerce platforms, customers can create their own content such as reviews, ratings, and comments. This user-generated content can provide businesses with valuable insights into what customers value in a product or service. For instance, a high number of positive reviews for a product feature could suggest it’s something customers particularly value.
- Sentiment Analysis: Social commerce platforms allow businesses to gauge customer sentiment. This involves analysing customer comments and posts to understand their emotions and attitudes towards a product, service, or brand. For instance, if a newly launched product receives predominantly positive comments, it may suggest high customer satisfaction. Conversely, negative comments may indicate areas for improvement.
In social commerce, understanding your customers is paramount. By analysing data from your social media platforms and e-commerce site, Mason Analytics can offer valuable insights into your customers’ behaviour. We love data and offer a range of data analytics solutions [Data & Analytics – www.masonanalytics.co.uk] that can help you take a data-led approach to marketing decision making, ensuring your marketing investments achieve their goals.
The Future of Social Commerce in the UK
Social commerce is in an exciting phase of development, with substantial growth anticipated in the next few years. As of September 2021 (6), the global social commerce market was projected to reach $604.5 billion by 2027, growing at 31.4% since 2020. This trend is mirrored in the UK, with social commerce becoming an increasingly significant part of the e-commerce landscape.
Are you interested in learning more about how social commerce can benefit your business? At Mason Analytics, we are experts in the full range of digital marketing and data analytics. We’re dedicated to helping SMEs navigate the array of opportunities in the digital landscape and achieve measurable growth. Contact us today for a free, no-obligation consultation on how we can help you harness the power of social commerce.
Sources for Post and Infographic
- www.statista.com
- https://www.tiktok.com/business/en-US/inspiration/nike-41
- ‘What Matters in the Social Commerce Experience’, Accenture – https://www.accenture.com/us-en/insights/software-platforms/social-commerce-experience
- ‘Social Commerce 2023: Social media and ecommerce convergence trends bring growth opportunity for brands’ – https://www.insiderintelligence.com/insights/social-commerce-brand-trends-marketing-strategies/
- ‘The State of Social Commerce 2022′, Mintel: https://www.mintel.com/press-centre/social-commerce-soars-as-61-of-25-34-year-olds-buy-on-social-media/
- ‘Social Commerce: The Next Evolution of Ecommerce’: https://www.insiderintelligence.com/insights/social-commerce-brand-trends-marketing-strategies/
- ‘Social Commerce: The Future of How Consumers Interact with Brands’, McKinsey –https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/social-commerce-the-future-of-how-consumers-interact-with-brands/
- ‘Social Commerce Trends 2023’, Hootsuite: https://www.hootsuite.com/research/social-trends/commerce#2oNj54Hl8AgnS49LCEkpZm
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