Last updated: What is social commerce? Definition, examples, stats

What is social commerce? Definition, examples, stats


For nearly as long as humans have existed, so has a form of retail. Granted, it’s evolved, but history shows people have always been taking part in social commerce: sharing, bartering, selling, and consuming resources.

The first currency dates back as far as 3000 BC in Mesopotamia, and from around 800 BC in ancient Greece, markets had been developed in the Agora in the city centre, with merchants selling to consumers. And, one of the first product catalogs is reported to have been created in 1498 by Aldus Manutius in Venice, who printed a catalog of the books he was painting.

History also shows it’s not just the local, physical “bricks-and-mortar” (or in the case of ancient Greece, stone), stores that have always piqued our interest.

The first modern mail order arrived in the world of retail, in 1861, when Welsh entrepreneur Pryce Pryce-Jones utilized the extension of the railway network to distribute his goods to consumers across the country, after they had browsed his catalog, and placed an order via the post.

Then, in the 1970’s we were introduced to the concept of telesales (or telemarketing) – an expansion on our opportunity to source products further afield, and continue that age old tradition of sharing, bartering, selling, and consuming resources.

Fast-forward to today, and the world is even more connected. Through the development and adoption of technology we can now access a wealth of products and services at the click of a button, from anywhere around the world, at any time of the day.

And with that, social commerce arrived on the scene.

What is social commerce? Social commerce defined

Social commerce is the use of a social network community to drive e-commerce sales, and it’s a massive market: By 2027, it’s projected that social commerce will drive $604 billion in sales.

Apps like Facebook, Instagram, and Pinterest have both dedicated “buy now” indicators on ads, as well as live streams run by influencers that are resulting in e-commerce goods being sold out on the regular.

Social commerce has been a game-changer for smaller brands, allowing them to easily compete in crowded marketplaces. However, now big retailers are hopping on board. For example, Walmart plans to start selling their products via influencers directly on TikTok in 2021.

As you might have guessed, social commerce grew tremendously in 2020: “Amid the COVID-19 crisis, the global market for Social Commerce estimated at US$89.4 Billion in the year 2020, is projected to reach a revised size of US$604.5 Billion by 2027, growing at a CAGR of 31.4% over the analysis period 2020-2027.”

A brief history of social commerce

1997 presented us with the first recognizable social media platform, Six Degrees, allowing users to create an online profile and connect with friends and other platform users. Many marketeers initially viewed this as a fad that would fade away just as quickly as it appeared.

However, as access to the internet and technology picked up pace, so did our adoption of an ever-increasing variety of online channels to source and share information.

In 2011, with growing momentum, and a change in consumer behavior and expectations, Facebook launched sponsored stories as a form of advertising.

For merchants, this opened the door to a wealth of consumer purchase data, and a broader, worldwide audience. However, from a merchant’s perspective, it also meant more competition and noise to cut through in order to stand out.

From a consumer perspective, it provided more sharing, bartering, and consuming power. After all, how often do you settle for the first price now while online shopping? You don’t need to fret over bartering in person – a couple of searches or checks on a comparison site, and you can easily tick the “buy now” box.

The power of customer reviews was also borne of the social commerce revolution.

A recent report shows that approximately 86% of consumers view product reviews as an essential aspect when researching and selecting products to buy. And, social media is a very strong platform for sharing such information – bringing marketeers the arena of social proofing.

In essence, social proofing is the notion that people follow the actions of others. When purchasing a product or service, this is shown to be a very valuable tool consumers use, with access to an array of information and very little need to search. From friends and family sharing a brand’s social post, reading the comments left by other platform users, or a post endorsing the brand by an influential celebrity – they all play a part in the sales funnel – either driving or diverting engagement along that path.

Whether you’re a small start-up, or a global brand, social media is very likely to now be a key part to your sales strategy – through both social media marketing and social commerce. It’s not just about posts to advertise and drive awareness; the social commerce world is shifting, perhaps as a result of 2020, quicker than we imagined.

Consumers are showing an appetite to use these platforms as a method to not just research, but to also transact; making a purchase with a couple clicks, while scrolling and catching up on the latest from friends or influencers they follow.

Discover the trends shaping the future of e-commerce HERE.

So, what’s the difference between social media marketing and social commerce?

At a high-level, here’s the difference between social media marketing and social commerce:

Social media marketing is used by brands to drive traffic to their websites. Brands will post ads showcasing their products and/or services, and include a CTA (call to action), for consumers to click-through to the website.

The cost of such ads is usually based on the number of likely impressions the ad will gain and/or a cost-per-click (CPC,  although that’s more commonly used in search engine paid ads, like Google). But, this cost is factored into that all important CPA (cost per acquisition), and ultimately takes the consumer out of their social media journey.

Social commerce allows consumers to purchase products and services from a brand directly, from within the social commerce platform. This could be via either clicking on a paid ad (like the above), or by clicking on the “View Shop” CTA on the brand’s social media profile (page).

Using social commerce, the entire online shopping experience can happen without the consumer having to leave the social media site they’re on. In essence, this can mean less interruption for the consumer, allowing them to transact in the moment, with fewer clicks, and utilizing features like autofill payments.

Throughout 2020, the digital world evolved even faster than anticipated as a result of the COVID-19 global pandemic. An almost overnight change in consumer behavior and expectations accelerated the online retail arena, and it’s often said that as a result, the e-commerce world has accelerated five years of growth in just five months.

In some instances across the globe, retailers have had to close their physical locations and/or scale back. As a result, they’ve prioritized cash preservation and overhead costs, demanding automation and digitalization even more to meet the rapidly changing landscape.

In parallel, the same can be seen across consumer behaviors, with people staying home and instead shopping online; growing numbers of consumers have adapted to the online shopping methods and channels available to them, which they may have overlooked before.

While the more traditional brick-and-mortar stores will always have a role in our retail world, they’re likely to evolve greatly with regard as to how they serve consumers, and the role they play in the consumer lifecycle. Whereas the recent shifts we’re seeing across the e-commerce arena are likely to become even more embedded in our everyday world and will continue to grow from there.

Although the global pandemic may have accelerated these commerce changes, they were already emerging. As consumers, in a world that’s continually becoming more and more connected and fast-paced, we often crave convenience, which digitalization of commerce world helps provide.

I have a small glimpse of this experience first-hand, from both the perspective of a consumer and a merchant.

The consumer e-commerce experience

When it comes to e-commerce, like many, I’d have considered myself an established consumer, and prior to 2020, thought of myself as an early adopter. However, we’ve come to learn just how much social media platforms can be used throughout all stages of the buying lifecycle.

Before 2020, consumers may have simply followed brands they liked for inspiration (or to know when a sale was launched). But now we’ve come to realize social channels can be a great tool for researching products, or we save posts and ideas for future purchases.

Social platforms are also an excellent place to contact brands or their communities, post-purchase for help and advice.

What’s more, in a world where we’re presently separated from friends and family, social has become more of a tool for us to share ideas and similar interests.

We should expect these conveniences will stay in our online world as we become more accustomed to them, and anticipate further mass adoption of social commerce into our regular shopping habits.

However, while the shopping experience is relatively simple, there are a few minor items that can be a bit annoying.

For example, as a consumer, if I’m scrolling, catching up on updates from friends and the latest news or funny cat videos (who can resist), and your ad catches my attention, getting me to click that “Shop Now” button, please navigate me to that item. Some brands will expect you to find your own way.

Even better: Only tempt consumers with items that are actually in stock, and available to be shipped to where they live or else they’re likely to bounce, and probably think twice about tapping on your “Shop Now” post in the future.

Merchant perspective on social commerce

Whether you’re a small start-up or an established brand, social media and social commerce are hugely powerful tools. With a small e-commerce storefront of my own, I’ve experienced first-hand how powerful building an online community can be in helping reach your audience and make the world (or at least a small corner) aware of your offerings.

Building an online community, no matter how big or small, can be invaluable for helping with social-proof. We all know happy customers can be a great social advocate among their network, and how this can grow organically.

And, with more and more of us flocking to social media sites, it’s where your customers are most likely hanging out, providing a great chance they’ll see your latest offerings. That includes those already following you, who will see your organic posts, and those who aren’t, but could be reached with relevant paid ads and promoted posts.

With a world that’s becoming increasingly accustomed to being able to source products and information, anywhere, and at anytime of the day, you can easily make use of tools available to pre-load and schedule content and to continually work towards increasing engagement and awareness, without having to always be physically working.

However, while the foundational tools to achieve both a near personalized social commerce experience and optimization of CPA are mostly there today, from a merchant’s perspective, the methods to bring it all together in a seamless consumer journey can still feel overwhelming, complex, and disconnected between platforms.

The consumers are there – they’re engaged and actively using social at a vastly growing rate, each and every day (and night). However, as a merchant, I believe there’s still a long and exciting journey to embark upon in the world of social commerce and social marketing to truly unlock the power of using these platforms to better showcase offerings to existing and potential customers throughout the buying lifecycle.

So, what comes next in social commerce?

It goes without saying, that as consumer behaviors surrounding e-commerce and social commerce rapidly evolve, so will a new wealth of data and opportunity, allowing brands to understand even more about their existing and potential audiences.

Here are several items about social commerce to watch and understand:

  1. Brands will need to embrace an end-to-end commerce strategy, supporting consumers in the buying lifecycle, and bringing relevancy from browsing to post-sales support.
  2. Using brand data across all digital touch points allows for better interactions with consumers.
  3. Personalization allows brands to present products and services that are of greatest interest to consumers specifically, at the right time and place, without causing annoyance or disruption to their social or onsite experience.
  4. Providing consumers with even more relevant experiences can help better optimize marketing spend, with clear and measurable strategies to utilize both paid and organic activity, further supporting brands to prioritize cash preservation and overhead costs.

As both a merchant and consumer, a core foundational element of promoting and selling via social media is using only products and services that are in-stock and available to consumers in their region. This is a fundamental element in succeeding in those early engagement stages, as we ensure consumers are seamlessly guided towards a successful purchase.

As more brands become increasingly familiar with building their social commerce and social marketing strategy, they’ll learn how to best use data and insights from across digital experiences to focus small volumes of higher quality, and more relevant content to help entice consumers at the right time, with the right product.

And, in doing so, they’ll cut through the extra noise from the competition on this same path.

Consumers buy from sellers that make buying simple.
Is your brand ready?
Get started HERE.

Share this article


Search by Topic beginning with