The concept of “social commerce” has been mentioned frequently in recent years. I’m sure some of you have already heard stories of how Chinese influencers are able to sell numerous luxury cars within the first couple of minutes of a live stream, or how cosmetic businesses in the East have moved their beauty advisors entirely online. However, for many, it may still sound a bit like an urban legend – everyone’s talking about doing it, but when it comes to the details, very few people actually know how to wrap their heads around the subject, let alone proceed with implementing it.
At Molecular BBDO, we see ‘social commerce’ as more than what one might be traditionally accustomed to, i.e., online sales conducted through a website. For us, it is part of d-commerce (digital commerce), a wider digital system that goes beyond traditional web-based e-commerce services. With this in mind, social commerce is one of the opportunities we help our clients discover and make the most of.
Why is social commerce so important?
There are at least five key reasons:
- Social platforms are among the most popular media. That said, for a lot of people it is also one of the top ways they spend their free time. With nearly 4 billion social media users, they can provide wide reach, with the only limitation being the seller’s budget.
- People get excited by social media. It matters to them what their friends publish. Adam Alter, author of “Irresistible”, explains that “when someone likes an Instagram post, or any content that you share, it’s a little bit like taking a drug. As far as your brain is concerned, it’s a very similar experience.” While in such an emotional state, people are more prone to buying things – even impulsively.
- Social media makes people feel that they are not alone in their shopping. In fact, social proof is important for many hesitant shoppers – if they see that someone else from their community likes a particular product, it encourages them to buy as well. Naturally, ratings and reviews serve the same purpose on e-retailer platforms, but in the case of social media the ‘likes’ and ‘comments’ come from their friends – people they trust.
- Social shopping is a perfect occasion for interaction. While it is not widely used yet, we can already witness examples of social selling. For instance, a London-based shop selling luxury fashion employs stylists who chat with their clients on WhatsApp or WeChat. The client decides to buy solely based on the outcome of such a conversation; this store, however, does not have its own e-commerce site.
- Social media is a perfect platform for influencers, who trigger users to buy immediately, from the social platform level. This also applies to micro-influencers. In fact, one of the companies that employs them says that “mid-tier influencers with between 1,000 and 100,000 followers tend to have better engagement rates than digital superstars. Although their audience may not be in the Kendall Jenner league, they are smaller and more tightly clustered around real passions and interests whether that’s beauty products, video games or vegan cooking.”
All of the above reasons circle around customers – after all, they are the ones who ultimately generate revenue. And, if consumers start buying through social channels, there will be no turning back. Statistics for the North American market reveal that:
- 87% of e-commerce shoppers believe social media platforms help them make a shopping decision.
- 1 in 4 business owners sell through Facebook.
- 40% of merchants use social media to generate sales.
- 30% of consumers say they would make purchases directly through social media platforms.
How does all this change the consumer journey or path to purchase?
It changes it big time! It can keep the entire purchasing process within the social platform – which, as a matter of fact, has always been the goal of their creators. Mark Zuckerberg – and all of his counterparts from other networks – want to keep customers on their platforms in order to maintain control. This is why Facebook Shops, Instagram shoppable posts, and Messenger ‘buy now’ buttons and other solutions were created, with all the opportunities that targeting and driving traffic entail.
Even with the evolution of e-commerce, many players still use a classic model of path to purchase, a funnel of: awareness – consideration – conversion – loyalty. According to the advertising approach from the past century, the first brand or product exposure creates awareness in the reach building phase. Next, the frequency of contact and a multichannel strategy build consideration and lead to conversion in-store. Finally, reach and frequency cycles cement brand loyalty and build reassurance that the purchase was a good call.
In the digital age, everything has become faster. Consumers get more messages and their attention span is dramatically shorter. However, when they do get excited, they can focus on buying. As seen previously in the quote from Adam Alter, this can be attributed to the dopamine rush mechanism. It explains why the whole process of awareness – consideration – conversion (and even loyalty, when it comes to subscription-based products or a particularly attractive discount) – happens instantly, within one interaction with social content.
Social commerce is a great business opportunity. As we see it now, it is still in statu nascendi: in other words, it is still being formed and developed – and it is still evolving – just like the internet in its early years. However, when we look back at it in 10 years’ time, we will probably smile and ponder over how basic things were a decade ago. That means that the time to act is now.
The social commerce area is vast. It covers:
- A variety of applications (social network-driven sales, user-curated shopping, social shopping, 1P and 3P sales, participatory commerce, etc.)
- A variety of ways to sell (‘buy’ buttons, shop-in-platform, chatbots, image commerce, video commerce, AR-assisted commerce, etc.)
- Onsite and offsite actions (onsite – on sellers’ websites, and offsite – outside of it).
For this reason, we have created an introductory overview which takes you through all the platforms and the opportunities they bring. You can read it on the Newscatcher platform here. It’s a clear and informative document that will help everyone interested in social commerce understand it in an orderly and systematic way. Going forward, we will continue to add additional resources analyzing specific opportunities, ways of selling, and methods of implementation. Watch this space, and if you are interested in receiving tailored recommendations, please reach out to us at LinkedIn.