The most recent results from social media companies like Facebook, Twitter and Snap have all exceeded market expectations, helped by surging online ad sales. One particular trend coming to the fore is the increasing investment by brands in social commerce: the buying and selling of goods or services directly within a social media platform.
Traditionally brands have used their social channels to reach a wider audience and increase brand awareness. Indeed, increasing brand awareness is still the number one goal for businesses using social media according to the latest Irish and UK data from Sprout Social. Social commerce, however, is a growing priority and allows users to not only discover brands while scrolling through Facebook, Instagram, Pinterest or Snapchat but to also purchase their products without leaving the app.
Consumers aren’t just going online with the intent to make a specific website purchase, or to inform themselves prior to a physical store visit. They are also browsing social media and when they see something that excites them, they will look to buy it.
On the face of it, the casual observer might not see the difference between social commerce and ecommerce. But consider the difference between viewing that new dress on a fashion brand’s Facebook page and, with just a click, being able to immediately act on a desire to purchase, versus having to move out of the app to visit the same retailer’s website and disrupting your browsing experience. Therein lies the difference, a more streamlined sales process that provides improved convenience for the buyer, and higher purchase completion rate for the seller.
With 50% of internet traffic coming from mobile devices, according to Statista, and almost 3 billion social media users accessing their platforms of choice exclusively through mobile devices, the ability to keep everything within an app presents a big opportunity.
The majority of social media platforms are investing in the future of social commerce, and they aren’t doing this for no reason. Our recent research shows that 63% of UK and Irish consumers have purchased a product directly from social media. The appetite is there, and platforms are taking a gamble that online shopping habits accelerated due to Covid-19 will only continue as economies begin to reopen.
It is also a gamble which looks likely to pay off, with McKinsey finding in 2020 that 10 years of e-commerce adoption was compressed into three months during the Covid-19 pandemic in America. Even allowing for a slight slowdown in that growth with the reopening of economies, they’re good odds.
It’s well known that healthy competition has a positive impact on consumers’ wallets. Social commerce adoption is no different. Brands want to get their products and services in front of the right customer, and with social being the hugely accessible market that it is, consumers are in a position to vie for that attention.
The opportunity goes beyond the simple acts of buying and selling as well, and why social commerce is a factor for long term success for both platforms and retailers. Consumers increasingly turn to social media for customer service, for a quick opinion from friends and family, and the ability to easily browse visually rich examples of products. Social commerce has the potential to be the total package. However, Sprout Social’s research also showed that only 17% of businesses in the UK and Ireland have a goal of driving sales through social media. The buy in exists from consumers and platforms, it’s now up to brands to factor it into their long-term marketing strategies.
Bricks and mortar shouldn’t fear this new trend but use it as an opportunity. With a streamlined purchasing experience comes an expectation from the consumer of a streamlined delivery. One option to consider is that store space be reallocated to fulfil online orders. This pivot opens doors for future innovations like autonomous vehicle delivery, or more immediate options like click and collect services and ultra-fast delivery.
A big part of the future of shopping is going to be on social media. The good news is that it presents potential market growth for all, from social media companies to local retailers. Social commerce is readily and easily available to all, leveling the playing field so businesses of all sizes and budgets can compete for consumer spend – from artisan bakeries to sports clothing goods. Social commerce is a good thing for both consumers and businesses, and brands that invest in a social commerce strategy will be apt to capitalize on this growing opportunity for all.
Gerard Murnaghan is General Manager & Vice President – International, at Sprout Social.