Social Commerce: The New World of Selling

Jul 20, 2020

Just over a decade ago, Facebook became the most popular social media platform in the world. It hasn’t let go of the reins yet, but a quick glance at the apps on any given cell phone will show that Facebook has a lot more competition these days. While social media started as a way to connect with friends, it has transformed into a way for brands to connect with customers in a more personalized and intentional way to build loyalty.

Social media is a daily part of our lives. In the US, there are approximately 247 million social media users or 79 percent of the US population. The average time spent on social media networks in 2019 was 153 minutes per day, compared to 90 minutes per day in 2012; that’s an extra hour per day that consumers are spending by scrolling their feeds and searching for the next best product. Retailers know it and are investing – heavily. Over $32 million was spent on social media advertising in 2019 – a 19 percent increase year over year, and a 105 percent increase from 2016.

With numbers like that, it is no surprise that retailers spending on social media advertising want to connect to their customers faster by having direct purchase on social networks, or social commerce. Consider this – over half of social media users are mobile-only. E-commerce consumer spending is growing by leaps and bounds, and mobile shopping is shifting into mobile buying. In 2018, 79 percent of smartphone users made a purchase online using their mobile devices. For brands, that means social media is more than just a touchpoint in the customer journey; it is a critical channel to grow mobile commerce spend.

There is also plenty of room for growth. 22 percent of consumers say they bought something directly from a social media app or website in Q4 2019, up from 13 percent in Q4 2018. It’s becoming more and more evident that social media is an important connection in the crosschannel customer experience, and can shorten the length of time from initial discovery to purchase.

While the power of social commerce may seem evident, identifying a balanced approach that fosters brand loyalty while also providing a streamlined purchase path is more complicated. So, what is the best approach to take with social media shopping on the rise? How does a brand balance content that is true to its brand identity, build customer loyalty and entice the customer to purchase directly from a given social media platform? Here are some tips:

  • Focus on brand values. Social media shopping is about striking a balance between commerce and branding. Customers are craving honesty and authenticity when making brand choices – 63 percent of consumers would buy from a brand that they consider to be authentic versus a brand they feel is fake. Highlight brand differentiators, charitable causes and culture. Don’t swing the pendulum so far towards selling that it degrades your brand value.
  • Build loyalty with customer engagement. Incentivize users to join your loyalty program and reward current members. Offer a bonus when a member follows your brand, takes a survey, leaves a review or when they share/like/love a post. On average, people are five times more likely to purchase a product that a friend has endorsed on social media rather than an online influencer. • Personalize with data. Social media is about a personalized experience with your customers, so the more you know about them, the better you can tailor the experience. It is another great opportunity to use your loyalty program, as it provides a valuable first-party data source to identify customers and customize the experience. But remember, there’s a fine line between personalized and ‘creepy.’
  • Leverage your loyalty program for exclusive product offerings. Encourage customers to engage with your loyalty program by offering exclusive offers, bonuses and products on specific social media networks.
  • Customize the approach based on the platform. Social networks each have their own identity, and your brand should have a tailored approach for each. Understand which platforms reach your target audience and deliver products that best fit the network and your brand. For example, a clothing retailer geared towards teenagers should have separate messaging for the teen wearing the clothes versus the parent that is purchasing the clothes.
  • Interact on a personal level. Social commerce is not a monologue – posts need to be relevant to the audience, but make sure to interact with followers and close the feedback loop. Social networks are essentially free focus groups – use them. And if a customer can purchase on social media, they can also complain about the purchase on social media; let them know you have heard their concerns and quickly address the issue.
  • Be strategic about the experience. The sheer volume of advertising, paired with the growth of social commerce across social networks, makes it difficult to stand out. The wrong content can turn off the audience you’re trying to capture. For instance, if a retailer touts environmental sustainability as a core value, but its social media posts show people drinking out of plastic bottles, it will ring disingenuous. Authenticity breeds trust and trust breeds loyalty.

Successful social commerce is not all in the hands of brands – it’s also reliant on the platforms themselves. Social networks are still figuring out the most seamless, yet differentiated, integrations for commerce. Instagram launched shoppable posts in March 2018, where users can purchase straight from the platform. Pinterest just recently announced Try On, a shoppable augmented reality feature. Brands like Sephora, Neutrogena and Estée Lauder are already on board and testing. Meanwhile, TikTok has just started testing out commerce; any brand targeting Gen Z should closely watch this space.

The best social commerce strategy is still only a piece of the puzzle. It is important for brands to put the data to work throughout channel integrations. Yes, you’ll have transactional data, clickthrough rates and interactions, but there is even more value in social media data. Social media data should be an integral part of the customer profile. Think about it – what if CLV not only showed purchase history but also a brand love score? A more holistic view of your members will allow you to better personalize content and messaging, inform how you market across channels, build brand trust and foster customer engagement.

The way consumers shop will continue to evolve – change will remain the constant. Brands need to view social media networks as more than advertising space, but as a place to build loyalty, connect with customers on a personalized level and make a more seamless path to purchase. Social media usage will continue to rise in 2020, and time will tell if this is the year social commerce comes into its own as a mainstream shopping channel.