From inspiration to conversion; social's evolving role in retail
Social media's influence on commerce has been steadily increasing for over a decade. From advertising to influencer marketing, defining brand identity through 'social stories' to using social channels to provide direct service to customers, social media has become a key battleground where brands and retailers compete to attract, engage, and inspire consumers.
More recently, social media has become a new digital commerce channel where products are sold. Social media marketing has long made use of links - think Pinterest product pins and Instagram sponsored products - which take people from a promoted product on a social page to an external shopping cart, providing an obvious and necessary route for converting buzz into sales.
But now we are seeing giants like Facebook, Twitter, and Snapchat, as well as the aforementioned Pinterest and Instagram, investing in ways to make commerce 'native'. In other words, instead of users having to click through to another site to make a purchase, customers are now being given the opportunity to buy right there in their social media account. This has earned the name 'social commerce'.
A market in the making
The journey began in 2014, when Facebook tested the first buy button, providing all the back-end and transaction support brands needed to sell a product directly from their Facebook pages. A year later, Instagram and Pinterest rolled out similar tools, the latter adding its own native shopping cart in 2016 so users could buy from multiple sources at once.
In the past year, Instagram has pioneered shoppable posts and now shoppable stories, giving brands the ability to scour organic user-generated content and, where they see anything related to their products or services, add a buy button.
There are obvious reasons why the big social platforms would want to gain a stake in eCommerce. But, is this really all good news for brands and retailers? Does it not just mean yet another third party grabbing a piece of the pie, and yet another channel to complicate the already labyrinthine world of eCommerce?
Social commerce has to be seen as an enormous opportunity. Purely in terms of crude volume, social media represents a ready-made market on three billion users worldwide who, on average, spend in excess of two hours every day on their favourite accounts. What is more, a growing number are already using social media to shop.
According to our 2018 Future Shopper survey, 24% of regular online consumers use social media for product recommendations, and 23% use it for inspiration - both well-established roles digital marketers routinely look to exploit. By comparison, 19% of respondents also said they actively purchase products through social media. This is not some potential trend for the future - it's happening here and now!
Shopping gone social
The obvious benefit to consumers of being able to buy directly from their social media feed is convenience. Three quarters of Future Shopper respondents said they were excited by the prospect of being able to buy everything they wanted in one place. The appeal of buying through social media is simplicity. When you spend a significant portion of your day on social media, why not do your shopping while you are there? In terms of creating the ideal shopping experience for consumers, this arguably gives social commerce the edge, even over marketplaces like Amazon, which has based its phenomenal success on convenience and raising the bar on meeting consumer expectations.
Social commerce takes the potential for peer validation to a whole new level, interlacing it with the entire shopping journey. As we have seen, a quarter of online shoppers already use social media for inspiration and recommendations, much of which will come from friends. This is, after all, what social media was designed to do: to enable an almost continuous dialogues between people on any subject of their choosing. In the context of shopping, it also has to be said that there is a simple pleasure in showing off your latest purchases to your friends; people naturally gravitate to making shopping a social activity.
Brands and retailers should need no further incentive to embrace a new channel than consumer behaviour or consumer demand. Nor have they been slow on the uptake with social commerce. According to Gartner, two thirds of brands have already tried out social commerce features, such as buy buttons, on their social media pages or in-app purchases. Meanwhile, a study by BI Intelligence found that, in 2017, the top 500 retail companies earned $6.5bn from direct sales through social platforms.
In summary, the key reason why social commerce represents such a major opportunity for the retail sector is that it radically shortens and simplifies the customer journey. If consumers find it convenient to shop on a platform they already use habitually, the immediacy of being able to click and buy a product your friend recommends there and then can only drive more sales. In many ways, social commerce completes the circle from inspiration through validation to conversion, all in the space of a few swipes or clicks. That makes it a truly exciting prospect for the future of digital retail.