‘Tis the season for frenzied holiday shoppers to storm the doors of their local malls after stuffing themselves silly during Thanksgiving Dinner. The National Retail Federation estimates holiday retail sales will grow between 3.8% and 4.2% this year, accounting for above-average-growth. Additionally, the NRF expects online and other non-store sales to climb between 11% and 14%. If you’re a B2C retail brand, chances are eCommerce is a priority, but how strong is your social commerce presence when it comes to a 2020 marketing plan?
It’s no secret that brick and mortar stores, specifically malls, are struggling. Stores with booming Millennial and Generation Z audiences, like Forever 21, are now filing for bankruptcy signaling a new kind shopping trend. In 2019, major retailers closed the doors on 8,558 stores in the U.S. while only opening 3,446. As eCommerce continues to sky-rocket, social commerce is revving its engines in preparation to change the face of retail as we know it.
What is Social Commerce?
Social commerce, simply put, is the love child between social media and eCommerce—two of the biggest industries worldwide. Brands continue to see an uptick in demand on social media, specifically from younger consumers who want a seamless experience when browsing brand offerings and purchasing products and services.
“Social commerce has definitely emerged as one of the recent growth stories of eCommerce, fueled by social platforms making it easier for brands to showcase their merchandise and for shoppers to follow, browse and buy products,” says Andrew Lipsman, principal analyst of eMarketer. “Despite the added features, the real driver behind this trend is that social media is providing contextual relevance to shopping in a way it didn’t previously.” eMarketer further cites an August 2019 survey conducted by BizRate Insights that reports social commerce ranked among the most-used emerging Ecommerce behaviors by US consumers. So, what exactly are social platforms doing to create this utopian shopping experience?
The Current State of Social Commerce
Specifically, when it comes to retail brands, expanding into the social commerce sphere can have big benefits, especially when involving the big players: Facebook, Instagram and Pinterest. eMarketer reports that Adobe found Facebook drove 80.4% of all US social referral to retail sites in Q1 2019, followed by Instagram at 10.7% and Pinterest at 8.2%. Facebook’s advertising platform is the main driver for their social commerce business.
Mark Zuckerberg also announced at the F8 conference last April that plans were rolling out for shipping options so sellers can send products to buyers across the US. These changes to the platform will undoubtedly boost FaceBook’s advertising business, which accounted for $14.9 billion in revenue during the first quarter of 2019, 99% of its total revenue, CNBC repots.
This comes at the cusp of the new decade and Facebook’s launch of Calibra, a new digital wallet that utilizes blockchain technology and digital currency. If anyone doubts that Facebook will continue to become a major player in the services industry following Apple and Amazon, think again.
Ever-popular Instagram arguably has the most seamless social commerce experience across platforms. Instagram’s Checkout, launched in March 2019, allows people to buy products directly on the social platform, rather than leaving to purchase from a website. “Instagram is a place for people to treat themselves with inspiration, not a place to tax themselves with errands,” Instagram explained when they announced their latest social commerce tool, Checkout. “It’s a place to experience the pleasure of shopping versus the chore of buying. We build everything with this in mind.”
Checkout does everything you would expect from an intuitive social commerce tool. Choose the size and color of an item, fill out billing and shipping information and pay. Buyers can also expect shipping and delivery notifications directly in their Instagram app. Additionally, brands have embraced the “swipe up” feature in Instagram Stories, sending interested audiences directly to a webpage designed to purchase the advertised product.
In 2017, Pinterest introduced an option to its users called, “Shop the Look” where users click on Pins to reveal the featured products, price and a link to purchase. In preparation for their IPO this year, Pinterest upgraded this feature to make branded content more visible and accessible to audiences. According to Social Media Today, this a significant step in Pinterest’s social commerce potential and good news for brands who use the feature.
Social Commerce Will Continue to Grow and Evolve—Why?
Although social commerce is still in its adolescence, there’s several reasons why your brand should keep an eye on this new retail opportunity in 2020. According to GrowCode, social commerce is thriving because it:
- Reduces friction associated with online shopping; shoppers can see exactly what they want and buy the item or service on the spot
- Enables online retailers to reach new markets and audiences with targeted advertising
- Generates buzz and conversation about new products and offerings by leveraging the social aspect of shopping and simulating urgency and the dreaded FOMO (fear of missing out)
- Tailors personalized experiences for audiences due to the detailed analytics social platforms provide
- Retargets shoppers who have previously purchased products or serves advertisements to audiences who have visited the website or browsed an online store
- Reaches customers at prime times on their preferred outlet
How Social Commerce Can Work for Your Brand
So, if your brand is thinking about using social commerce to your advantage next year, there’s some things that you should know. Social commerce fits best with a fully integrated social media strategy, which means continued testing is a must and focusing on your best, most popular products are essential.
Content is also king when it comes to social commerce. One way to boost engagement and awareness are to leverage the use of social media influencers. Influencers already have a solid presence on social media. Knowing that your core audience of Millennials and Generation Z often stray away from traditional advertising is critical. These shoppers rely heavily on social media and influencers to inform their purchase decisions due to authenticity—a core value of these generations.
Many social platforms are attempting to create a place where cross-traffic shopping is an obstacle of the past. For now, it’s important that retail brands get in on the ground floor of this new kind of mall. A mall that’s just as social with a seamless shopping experience.