Have you ever been scrolling on your Instagram feed, seen a picture of a model wearing a pair of shoes you really like, and then found a View Products tag? That is social commerce: the fusion between ecommerce and social media. Kids are now born with a smartphone in their hands and social media on the screen. Platforms like Instagram, Facebook, and TikTok drive huge amounts of traffic daily and have billions of users worldwide. Companies had to find ways to monetize all this traffic and data, and social commerce is one of them. This relatively recent way of selling is significantly impacting the digital marketing world, and it is getting bigger by the year. But how big is it exactly and should you use it? Let’s find out.
Some Numbers on Social Selling
Did you know that more than half of the world now uses social media? There are more than four billion users on social media, with an average daily time spent of two hours and twenty-four minutes. That is 10% of a day! At the time of writing this article, the most popular platforms are certainly Facebook and Instagram, but Snapchat isn’t far behind, and TikTok is quickly rising. With all this traffic, it is no surprise that social commerce has become a thing. Close to a quarter of social media users indicated they use social media as a way to discover new products, with 70% of this figure being Instagram users. Statista estimated that sales via social media will reach $1.3B in 2023 and over $2B after 2025. Globally, social commerce is expected to grow three times as fast as traditional ecommerce. To be honest, this does not surprise me; it is just following the explosion of ecommerce and social media traffic the world has experienced in the last two decades.
While not as big as in China—where 84% of shoppers have bought products on social media—about 36% of US internet users are social buyers. That is a huge population that continues to grow year after year. Social commerce is especially popular among Gen Z, with around 40% admitting to purchasing a product on social media. And if they don’t buy directly through the social media platform, they use it to discover and find information on products before buying them via another channel.
Just like social media use, Facebook and Instagram are the most popular platforms for social commerce, but TikTok is rising fast. Long gone are the days of TikTok being teenagers posting videos of dumb dances; the platform is a key marketing tool for thousands of businesses. In fact, in a blog post released in 2022, TikTok said that 48% of subscribers they surveyed expressed interest in placing an order on the platform in the next three months.
Based on these impressive statistics, and if you are not already selling on social media, it is time to consider devising a social commerce strategy. But what are the advantages of social commerce, and is it a good idea for every online business?
Why do Social Selling?
Rather than redirecting customers to an online store, social commerce brings the store to the customer on social media, meeting them wherever they are. This is highly convenient for the customer as they don’t even have to leave the social media platform to find products and make purchases. When the customer is not on Amazon browsing for products or on Google being bombarded with search ads, they will see product tags on social media: they can’t escape products for sale. And if you don’t display your products on social media, your competitors most likely display theirs.
Some customers don’t like shopping outside their favorite channels, sometimes because they don’t like the experience, but other times because they simply don’t trust other merchants. This is especially true for smaller business websites that have little credibility or track record with the customer. However, they tend to trust their favorite social platform and would be more willing to start their buying journey there (social media makes it easier to spot and remove scammers, too).
Not only does social media provide an excellent platform for driving sales, but it also offers a unique opportunity to build meaningful relationships with your customers. Unlike large online marketplaces, social media gives you the chance to talk and interact directly with your customers. This is very important to build trust and customer loyalty and gain valuable business insight. In my own experience, I had customers giving me valuable ideas on how to improve the products I sold. They were passionate about the product and had a reasonable opinion of the company, so they were willing to share interesting ideas and suggestions.
Social media is also a great way to refine your customers’ personas and learn more about your target demographic. You can get both quantitative and qualitative data you can use to craft a better marketing message or value proposition that resonates with your target audience.
Finally, social commerce contributes to building a unique brand experience and talking to customers who might not be on other media. It gives the company and its products social proof and credibility, providing more value to user-generated content.
Risks of Social Selling
Just like every other channel, social commerce comes with its risks and drawbacks. Most successful companies tend to avoid being too aggressive in their communication on social media, but ultimately, social commerce is a direct opportunity to sell products via social media. This can make balancing the brand message complicated; to be effective, generate revenues but do not appear too “salesy” or unauthentic.
That point is crucial; you have to ensure you don’t appear insincere to your customers, so you can preserve your reputation and customer engagement and avoid social media backslash. Word of mouth can be a great way for customers to discover new products and generate sales for a business. However, negative feedback spreads fast, and upset customers can quickly destroy a company’s reputation.
There is one major limitation of social media for entrepreneurs: you most likely don’t own the platform, and you can’t do whatever you want. While your own custom website lets you set up and use the features you want, here, you have to use the social media’s platform formats, adapt to their constraints, and generally have less creative freedom.
Ultimately, social commerce is a unique sales space between social media and traditional online sales. It requires attention from multiple teams and constant monitoring and can be time-consuming and demanding in resources.
Who can benefit the most from social commerce?
While there is no perfect rule and every case is different, some businesses can benefit greatly from social commerce, while the interest is more limited for others.
In general, D2C (Direct to Consumer) brands can often benefit from social commerce by leveraging this considerable source of traffic and building a relationship with the millions of individuals using social media to discover products. Similarly, brands with more emotional appeal (fashion, beauty, food, sports) have an advantage in using social media. When people develop an emotional attachment to a brand or product, they are more likely to follow them on social media and be exposed to their offers multiple times a day. Following a brand isn’t too dissimilar to signing up to receive targeted ads.
On the other hand, highly specialized businesses selling very technical products can struggle more with social commerce. Customers buying this type of product need to do more research and learn about the product before making a decision; they can’t just impulse buy from social media (and these products can be expensive, too). Lots of people get excited about Harley Davidson or Ferrari, but garbage truck manufacturers don’t get the same engagement on social media.
It is less common for B2B businesses to use social commerce, but some B2B companies are starting to experiment with it. Companies with bad reputations among consumers are less likely to be successful in general. However, this is especially true on social media, where people can easily comment and share their opinion on brands. Finally, brands with limited resources should prioritize the most relevant channels and decide if social commerce should be their priority. Some people would argue that commodities would not do well on social media due to the highly competitive market, but in my opinion, selling commodities should be avoided by the vast majority of people—see my post on this.
Conclusion
Social commerce is growing year after year, outpacing traditional ecommerce. Both businesses and consumers frequently use this sales channel. By integrating with social media platforms, companies can reach people where they are: products come to them directly when they browse social media, and they don’t have to leave their favorite platform to buy something.
However, it comes with a few risks and needs to be done right to be effective. Companies have limited resources, and setting up new sales channels will be additional work and expenses. As we saw in this section, and despite its growing popularity, social commerce is more impactful for some businesses than others. In the end, you have to figure out if this can help you grow your business or if you can do without it. Just keep in mind that customers’ behavior and expectations are evolving in favor of social commerce, and even B2B companies are getting on board.
https://www.statista.com/statistics/1251145/social-commerce-sales-worldwide/
