Why social commerce matters for your business

social commerce

What is social commerce and why does it matter for your business? In this article, we will cover how it differs from eCommerce, how big it is and the impact it will have on businesses in years to come.  


What is social commerce? 


Social commerce takes the shopping experience inside a social channel (Instagram, Facebook, TikTok) without the customer ever having to leave the platform. A user’s journey can revolve around product discovery and research, to the checkout process.  


What does a social shopping experience look like? 


Company pages captivate their audience using a number of engaging tactics. This can include: 

  • Encouraging users to vote on select products 
  • Using influencers for endorsement 
  • offering one to many events 
  • Linking products directly to the checkout page 
  • Inviting users to engage with social media posts 
  • Ask users to vote on their favourite styles  


In an age where 90% of Instagrammers follow business accounts with another 93% relying on reviews to influence purchase decisions, it is highly important for your brand to utilise social channels in the right way. 

By inviting your community to engage with your products and create authenticity by introducing influencers into the mix, you can set yourself up for success 


Social Commerce vs eCommerce – what’s the difference? 


To clarify, social commerce is not eCommerce. 

And as said previously, social commerce is not social selling. Social selling focuses on nurturing relationships on socials to build your sales prospect list whether it’s B2C or B2B. 

An eCommerce shopping experience happens via a website or bespoke app where the customer can complete a person. Of course, many attributes can lead to an eCommerce conversion that includes social referral traffic.  

Whereas social commerce, allows the customer to make a purchase within the social media experience. 


Nordstrom interaction with social shopping 


Like2Buy is a feature on Instagram that allows businesses to make their products shoppable. It monetizes Instagram feeds by linking Instagram feeds to eCommerce pages.  

Nordstrom’s feature means users can seamlessly be directed from the Instagram feed to the correct webpage. 

Of course, this is slightly different from a complete 100% social commerce experience as the user is directed to another channel but shows how social shopping can encourage product discovery to a sale. 


How big is social commerce? 


Right now, social commerce is huge. It is an estimated $89.4 billion market and is expected to grow $604.5 billion in the next seven years. By the end of 2021, the global social commerce market will be expected to grow by around 34%. 

Those numbers are huge, and there is a reason why. It is tapping into generations that have grown up and been influenced by social media. 

Social media, once a platform to maintain friendships and make new ones, is now a channel that is allowing brands to maintain loyal customer behaviour and capture new interest.  


Why is social commerce important for your business? 


Social commerce places brands at the heart of people’s actions. It taps into consumer behaviour and enables brands to present their products in a native way for the customer. 

Let’s look at the numbers in closer detail. 

Source: Response Marketing Association 


Shoppers use social media for research 


  • In an era of information overload, shoppers take to social media to streamline research. 81% of shoppers commonly use Facebook and Instagram to take inspiration.  
  • A staggering 48% of Pinterest users say shopping is a top priority. Moreover, Pinterest users buy products organically at a higher rate than their counterparts due to the action of users proactively searching for products rather than aimlessly scrolling through feeds.  


We’re all social media addicts at heart 


It is a figure we tend to turn a blind eye to, but it is no surprise the average internet user spends 2 hours and 15 minutes on social media, daily.  

But aside from admiring holiday pictures and supporting your friend’s selfie, 28% of users spend that time discovering new brands and browsing products they would like to purchase. 


China offers a peephole into the global eCommerce landscape 


By the end of 2021, it is predicted that social commerce will reach 13% of all eCommerce sales in China. 

It is already highly developed with the vastly adopted WeChat app and commonly used mobile payment technology. To put it into the perspective, social commerce will roughly generate $315.5 billion in social commerce sales in 2021. Whilst in the US, it will reach $31.35 billion. 

China’s eCommerce landscape has paved the way for success in social commerce. With eCommerce marketplaces like Taobao and JD, it has familiarised China’s consumers with quick product discovery and frictionless transactions. 

You can read more about the success of eCommerce in China here. 


Shoppers want a painless checkout process  


33% of consumers abandon carts because the shop asks them to create an account. With a further 27% saying the checkout process takes too long or is too complicated. By allowing shoppers to purchase inside the experience takes away barriers that would once deter them from completing the sale. 


Social media creates demand for your business 


In 2021, 91.9% of U.S marketers will use socials for marketing purposes. Social media has become a facet to identify new and existing customers in the funnel and direct through the marketing mix.  

Gymshark, arguably the fastest growing sports brand right now, is giving well-established market leaders a run for their money. They have created and nurtured a community of avid followers using clever social media tactics to generate demand. 

This demand then feeds into the social commerce engine where they can push for sales.


Instagram is king for average order value 


Many brands look at Instagram for social commerce. Statistics show the average order value from Instagram is $65. Higher than Twitter ($46.29), Facebook ($55) and YouTube ($37.63).  

With its dedicated tab for Insta shopping, the experience of scrolling through and discovering new brands makes it a far more pleasurable and tailored experience for the shopper.  

You can read more how you can raise average order value for your business here. 


Over 50% of Gen-Z and Millennials fashion purchases are influenced by socials 


Across other sectors, including sports, social plays a big part in inspiring the tech-savvy generations to purchase from brands. Young people love scrolling through social media so for sectors like fashion, sports and luxury, it is important to build your visibility now. 


How do social media platforms support social commerce? 


TikTok and Instagram have utilised social commerce to their advantage. Instagram has launched a “drop feature”, inviting customers to engage in high-demand, limited-stock releases from retailers without ever leaving the channel. 

Social media platforms also suit particular demographics, which is something for you to consider too.  

For example, TikTok is targeted at Gen Z. Instagram has an intergenerational appeal whereas Facebook attracts the older demographic. Once you find your approach, you can then tailor campaigns that suit you. 


What should you be careful of when considering social commerce? 


  • Cost


Social channels take a commission for retailers who use social commerce. For example, Instagram and Facebook charge 5% per shipment or $0.40 for shipments worth under US $8, with TikTok charging 2%. 


  • Lose control over data 


While social platforms generate insights, you will be losing valuable data collection that helps with targeting, product design and strategy.  


  • Lose website traffic 


Since the pandemic, brands have been uplifting their DTC approach to attract traffic to their website. By focusing your attention on socials will naturally see a dip in website hits.  


  • Small fish in a big pond 


With many brands big and small taking to social for product discovery, it takes a lot for you to be at the front of the pack.  


  • Great for low consideration but missed opportunities with high ticket value items


For sectors like fashion and sports, social commerce acts as a great tool to build brand awareness and encourage quick transactions for low consideration items. However, even to leverage influencer endorsements, high consideration items work better when its on the website. 

Why? Because your brand should already be engaging with effective customer service where shoppers can engage with your retail experts to understand the product and see if it addresses the needs. 

If you are a brand looking to capitalise on your website and capture demand, live video shopping could be for you. To find out more, head over to these pages: 

What is live video shopping? 

Confer With case studies 

Share this post

Transform your business with Confer With

Learn more about

Transform your business with Confer With

Related Posts