What is social commerce? Definition, examples, stats
Social commerce is the use of a social platform for e-commerce sales, and it's huge: By 2027, it's projected to drive $604 billion in sales.
Consumers have grown used to social media over the last two decades, but how can brands find a profitable home on these platforms? What’s the best social commerce strategy?
What was once a chance to engage with friends or spend a bit more time than intended looking at puppy videos has now turned into a full-blown commerce opportunity.
Social platforms provide brands with a unique window to meet shoppers where they are most engaged. They must meet the moment with relevant offers that encourage shoppers to checkout and share. But how can brands square the increased audience with the decreased control and data that goes along with social commerce?
Here are some tips to help you develop a winning social commerce strategy:
- Start with a smart social media program that’s timely and relevant
- Focus on enhancing the customer experience with social value-adds
- Come to terms with the decreased control on social platforms
- View social commerce as an opportunity to bring consumers to your owned platforms
Why you need a social commerce strategy
With lookalike audiences on social sites, brands can get hyper-targeted and present social media users with products they’re much more likely to buy. And the social aspect of your social commerce strategy really matters.
Social media offers a chance to introduce products in a social setting. It’s so easy for consumers to send a friend a product they might like or get a second opinion on something they found interesting. Consumers are already in the mode of sharing and commenting when on social media and products can get a boost from word-of-mouth advertising when they get into the feed of the right potential customers.
This built-in engagement that brands can tap into can’t be experienced to the same degree on owned websites. Brand websites are about education, exploration, and transactions, so social media is a necessary commerce channel for any brand seeking to create a buzz.
But not every worthy product benefits from the bump of word-of-mouth advertising.
Brands have to adopt the right approach on social media first. They have to be timely and relevant to make the intrusion worthwhile to consumers and continue to delight them when a potential customer gets to their profile. The current sophistication level of advertising makes this much easier for the savvy brand that’s willing to put in the time.
Social marketing vs. social commerce
To help brands nail down the metrics they need to be tracking and improving, Jason Goldberg, Chief Commerce Strategy Officer at Publicis, differentiates between social marketing and social commerce.
“The distinction is the outcome you’re seeking and how you measure it. Social marketing is generally about building awareness, and so your KPIs are going to be things like reach or impressions or unaided brand recall or CPM. In social commerce, the outcome you’re seeking is revenue or profit or customer lifetime value,” he explains.
With the right strategy, social commerce isn’t an intrusion, it’s offering up a product that the customer is likely to want at a touchpoint at which they’re likely to buy. Instead of adding friction, it makes their life more seamless, and can help them learn about a product that will save them time or get more enjoyment out of life.
In a nutshell, the best social commerce examples are value-adds that enhance the customer experience instead of detracting from it.
Social commerce strategy: Getting real
While social media is a great way to grow awareness and sales to a lesser extent, it’s important for retailers to acknowledge that they don’t own their customer data or branding on the platform.
Having someone check out after seeing an Instagram ad is a win, but converting that shopper to make a purchase on the website is not guaranteed. A social site could have an outage or boot a brand and then they would lose any data and sales coming through that channel. Brands must approach social commerce carefully and strategically.
This is where competing interests start to emerge. Brands must meet shoppers where they are, but social sales can be opaque data-wise and create extra work for a brand in terms of upkeep for yet another sales channel. Brands must have dual goals: Make it as easy as possible for customers to pass through discovery to checkout on social, and also get the data and relationships they need out of each sale.
The future of shopping: Here we are now, entertain us
The future of shopping is entertainment. It's not enough to have an online storefront – brands must do more. Consumers today are looking for novel, immersive, and entertaining shopping experiences.
Customers want ease of use, and social commerce provides that on a golden platter. They can discover products while scrolling through vacation pictures and check out without having to leave the social property.
Brands must humble themselves and provide the service shoppers are looking for, instead of adding the friction of requiring potential customers to check out using their site. They must provide moments of delight that grow loyalty in new customers and intrigue them enough to explore the brand on their owned channels.
Social media might offer more constricted methods of commerce, but an excellent first experience through these social channels can be the first step toward owning the relationship and data. This provides the opportunity to improve the customer experience, offer more payment methods, and keep in touch from owned channels.
The future is social
Social commerce in Asia provides a potential look into the future. Social commerce is starting to pick up in Western markets, but it’s already booming in Asia.
Sites like Alibaba powered by Taobao Live tap into the social aspect of social media and get customers checking out at several times the rate seen in Western countries, according to Goldberg. With the help of engaging content creators, these sites excel in “shoppertainment” — using entertainment as an effective selling tool.
The allure of social media is hard for brands to ignore. When viewed honestly and with a firm set of attainable goals, it can open the aperture to new customers.
Getting a social commerce strategy right requires a balance of accepting the site for the revenue-generating opportunity that it is with the much harder goal of using it as a gateway to owned-selling channels. This will be an ongoing project for brands as the role of social commerce continues to evolve.
