Social media has risen to become an integral part of content marketing. It has completely revolutionized the way we communicate, share information, and interact with others. Originally, people worldwide depended on these various platforms to connect with friends and family, share photos and videos, and stay informed on news and current events. However, changes within the e-commerce space now make social media an excellent marketing tool for people within the e-commerce space to put out their goods and drive sales. In this article, we will thoroughly explore the place of social commerce in modern-day marketing.
What Is Social Commerce?
Social commerce uses social media platforms to promote and sell products and services. This trend is rapidly growing and transforming the world of e-commerce and it is also making waves among businesses and consumers alike. Social commerce involves the use of product catalogues, user reviews and ratings, social proof, influencer marketing, and other social media marketing tactics to drive traffic and sales. Businesses can now take more advantage of social media by tapping into the social networks of their customers and reaching new audiences, while also offering a more seamless and convenient shopping experience for consumers. Examples of this innovative idea include both Instagram and Facebook shopping features, which allow businesses to make sales on the platforms.
The Evolution of Social Commerce
It is essential to understand how social commerce evolved. E-commerce has been around for quite a while but became widespread during the rise of the internet in the 1990s. At its inception, e-commerce was limited to a monopoly of large businesses with the resources to build online e-commerce websites from scratch.
However, the rise of online platforms like Amazon, eBay, and Alibaba made e-commerce opportunities available to small and medium-sized businesses. Another factor that influenced the growth of e-commerce was the dominance of mobile devices. With the increasing use of smartphones and tablets, consumers shifted towards mobile shopping. As a result, businesses had to adapt their e-commerce strategies to accommodate mobile users.
The e-commerce industry is currently a multi-billion dollar industry with much room for growth. According to Statista, global e-commerce sales are projected to reach $ 6.54 trillion USD by 2023.
Find out in our article Emerging Retail Trends, which are the trends to keep an eye on in 2023.
The Rise of Social Media
While e-commerce was growing, social media was also experiencing rapid development. The first social media platform, Six Degrees, was launched in 1997. It wasn't until the launch of Facebook in 2004 that social media started gaining widespread popularity.
Since then, social media has grown from a peripheral to an integral part of our lives. A 2021 report estimated that there were 3.78 billion social media users worldwide (almost half of the global population). In Switzerland, 3.5 million Swiss people use Instagram and 2.06 million use TikTok (Statista, 2023). Today, social media has undoubtedly become an excellent tool for businesses to promote their products and services, engage with customers, build brand awareness, and drive traffic to their website. If you'd like to learn more about this topic and also wonder what inspires and influences Swiss consumers on social media, don't miss our study The Power of Digital Influence.
The Convergence of Social Media and E-commerce
The continued romance between social media and e-commerce led to a convergence. As more companies sought ways to better leverage social media for their e-commerce businesses, social media platforms started creating features that made it possible for people to buy directly on these various platforms. Social commerce has become more prevalent in recent years, driven by the increasing use of mobile devices and the rise of social media platforms that support e-commerce. Social interaction has also been fueled by the COVID-19 pandemic, which has accelerated the shift toward online shopping.
Top Social Commerce Platforms
Here is a list of the top social commerce platforms that are being used for product sales worldwide:
Facebook has been around forever and is at the top of this list. According to Statista (2023), over 60% of users in the United States on Facebook have made purchases on the app at one point or another. That's over 50 million people. And according to Statista (2023) it is predicted that this number will increase every year. So if you are trying to venture into social commerce, Facebook should be the first platform on your mind.
According to statistics from Instagram, 50% of its users use the app to search for and discover new brands, products, and services. What's more, 44% of these users shop on the platform. The features available on the platform for businesses include shop tabs, shopping tags, ads, and shopping through DM. Among GenZ, nearly one in two (46%) make purchases through Instagram, with influencers being key drivers of purchases, as we uncovered in our study The Power of Digital Influence.
TikTok might be new to the game, but it's not playing. The users buy as they scroll, as reports indicate that over 33% of TikTok users are making purchases on the app. Through its in-app social media shopping, this over-performing newbie is taking its fair share of the social commerce cake. Now merchants with a business TikTok account can add shopping tabs to their brand profiles. It is also important to emphasize that TikTok is no longer the "Gen Z only" app in Switzerland, even though the proportion of younger people is still high. This is because the number of older target groups using the channel is increasing from year to year. For this reason, TikTok is a highly relevant channel not only for attracting the young customers of tomorrow, but also for reaching the consumers of today (Kingfluencers, 2023).
Types of Social Commerce
There are various types of social commerce, each with unique features. Here are the more prevalent versions of social commerce:
Social Media Shopping
Social media shopping involves directly using social media platforms like Facebook, Instagram, and TikTok to promote and sell products to customers. Many businesses that operate this style of social commerce use it as an avenue to reach new customers, showcase their products, and build brand awareness. The presence of social media influencers also makes it easy to promote goods and services on these platforms.
Peer-to-peer marketplaces allow individuals to sell products to one another directly. Examples of such places include Etsy, Depop, and Mercari. These platforms are popular among small business owners, artists, and crafters as they allow them to reach a larger market without having to meet people physically or have an on-ground store.
Group buying allows people to come together and buy something at a discounted price. Group buying platforms like Groupon and LivingSocial have grown in popularity and allow businesses to offer their products and services to a larger group of people. It also allows consumers to save lots of money on products and services they would not have been able to afford all by themselves.
Social Shopping Platforms
Social shopping platforms are online marketplaces where users can discover and purchase products based on their interests and preferences. International examples of social shopping platforms are Wanelo, Polyvore, and Fancy. These markets are popular among young consumers looking for unique and trendy products. You can also connect with like-minded individuals on these platforms. In Switzerland, by contrast, providers such as Facebook Marketplace, Ricardo, Tutti and Ebay are the dominating players.
Benefits of Social Commerce
Social commerce offers a wide range of benefits to businesses and consumers alike. To find out what strategy you can follow for social commerce in Switzerland, check out our article The new Retail Formula to Leverage Social Media as a Purchasing Channel. We would also like to share with you some of the upsides of using this marketing tools:
Increased Brand Exposure and Awareness
Using social media platforms to promote and sell products can help businesses reach new customers and build brand awareness. Over half of the world's population uses social media. This means there is an opportunity to get people through these platforms like never before. Social media platforms are a great way to connect with potential customers, as they offer a range of tools and features that allow businesses to target specific audiences and showcase their products in a visually appealing way.
Seamless Shopping Experience
One of the benefits of using this method is that the shopping experience becomes seamless and easy. Customers do not need to leave social media anymore to make purchases, as they can do that right within the apps. This makes buying less of an issue, as many consumers are not usually comfortable leaving social media apps to purchase products. Now they can buy and continue their surfing experience all in one breath.
Improved Customer Engagement and Loyalty
Social commerce can help businesses improve customer engagement and loyalty by offering a more personalized and interactive shopping experience. By using social media platforms to connect with customers, companies can build relationships, respond to their feedback and concerns, and offer personalized recommendations and offers.
Greater Social Proof and Trust
Social commerce can help build trust and credibility among customers by providing social proof in the form of customer reviews and user-generated content. When customers see other people using and enjoying a product, they're more likely to trust that it is high quality and worth purchasing.
Gather Data on Your Audience and Even Competitors
There has never been a time when it was easier to gather data. Social media offers an easy way to monitor consent and get data without struggling. All you have to do is pay attention to what they like or buy more. You can use this data to know exactly who is more likely to buy from you and what they are more likely to buy. You can also use this to monitor your competition and know precisely what they are doing.
Higher Conversion Rates and Sales
Social commerce has been shown to impact conversion rates and sales positively. Using social media platforms to promote and sell products, businesses can offer a more seamless and convenient shopping experience, leading to higher conversion rates. Additionally, social commerce can help businesses reach new audiences and drive more sales, especially if they partner with influencers or use social media advertising.
Challenges of Social Commerce
Just like everything else, social commerce has its challenges. Here are some difficulties people encounter when using social commerce platforms:
Keeping up with Changing Algorithms and Trends
Social media platforms constantly change their algorithms and features, making it challenging for businesses to keep up with the latest trends and best practices. Additionally, as social commerce becomes more popular, competition will likely increase, making it harder for businesses to stand out. Businesses would have to continually make new adjustments to align with the changes in the platform’s algorithm.
Ensuring Data Privacy and Security
Social media platforms have been scrutinised recently for their handling of user data and privacy. Businesses that use social media for e-commerce need to ensure that they follow best practices for data privacy and security and are transparent about how they use customer data. While this might not be the easiest of tasks based on the fluidity of privacy laws and company policies, brands would have to find a way nonetheless.
Managing Customer Expectations and Complaints
Social media platforms can be a double-edged sword regarding customer feedback. While they offer an excellent way for customers to share their feedback and experiences, they can also make it challenging for businesses to manage customer expectations and complaints. Companies need to be prepared to respond to customer feedback and complaints in a timely and professional manner to maintain a positive reputation.
Best Practices to Use Social Commerce For Your Brand
Using social commerce for your business is a great choice to make right now. However, it is important that you do it properly. Here are some best practices if you want to use social commerce for your brand:
Choose the right social media platforms
It is one thing to choose a platform, but another to choose the right platform. There are different social media platforms out there, and choosing the right one for your business is paramount. One easy way to ground your activity and success on social media platforms is to choose the wrong one. So ensure your business is on the right platform. For example, if your target audience is primarily women, Pinterest and Instagram might be the best platforms. However, if your target audience is mostly professionals, LinkedIn might be a better option.
Create a shoppable experience
Make it easy for customers to buy from your page without any difficulty. What you should do is ensure that your page is user-friendly. Ensure that the right buttons are in the right places. This way, customers will easily make their purchases without struggling.
Optimize your content for mobile
Most people who use social media do so on their mobile devices. This is why it is important that you optimize your content for mobile devices. This would include using responsive design and creating content that's tailored to mobile devices.
Leverage user-generated content
There is almost no better way you could generate legitimate content for your brand. If ordinary users are making posts using your products, then you must take advantage and use these posts. One way you can achieve this is by encouraging users to share their experiences on the platform. This would generate natural traffic, as people would easily see this as a natural gesture and not a targeted ad.
Personalize your social commerce strategy
Use customer data to personalize your social commerce strategy. This can be done by offering personalized product recommendations and promotions based on their purchase history and browsing behaviour. Personalization can help you to increase sales and build customer loyalty.
Monitor and respond to customer feedback
Social media platforms provide customers with a direct line of communication with your brand. It is essential to monitor customer feedback on social media and respond to any questions or concerns promptly. This will help you build customer loyalty and improve customer satisfaction.
Measure your results
Use social media analytics tools to track your social commerce performance. This will help you identify which strategies are working and which ones need improvement. Use this data to adjust your social commerce strategy and optimize your efforts for maximum impact.
The years ahead really look promising for social commerce. Many innovations are happening in the social media space that would allow for more advances to be made. There is no better time to take advantage of the social commerce space than now. If you need help starting out on social media, you can reach out to us so we can work together to make your brand's social commerce valid.
Author: Yoeri Callebaut, Kingfluencers AG