The velocity and convenience of shopping online has led to a massive growth in ecommerce. Current social distancing measures and business closures have significantly disrupted consumer spending habits and has fundamentally changed shopping behaviours, forcing many retailers to rethink the way they engage with customers as they rely on technology to keep their businesses afloat.
The fulfilment of online orders has been one of the quiet revolutions of last year. Online growth has seen a 46% increase in 2020 compared with the previous year, and the average time spent per day on social networks increased from 142 minutes in 2019 to 145 minutes in 2020.
The long-term outlook for buying and selling online is bright. The rise in ecommerce has now encouraged companies to turn to influencer marketing and user generated content to promote brand awareness.
Ecommerce giant Amazon currently own 63% of product searches in the UK, but other media platforms like Google, Instagram, Pinterest and TikTok are currently expanding their ecommerce offering.
This provides many opportunities when it comes to gaining, holding in place, and growing customers. With significant ecommerce growth and tech-savvy customers increase their focus on smartphones, 2021 will be the year of social commerce.
To prepare for what may be a digital-first future, read our guide.
What is Social Commerce?
Social commerce blends ecommerce and social practices. More specifically, this refers to a consumer’s shopping experience occurring directly on a social media platform. It may also include clicking links on a social network that lead to a retailer’s product page with an immediate purchase option.
Different to social media marketing where you try to drive referral traffic from social media to a website, social commerce is the entire shopping experience. There is no navigating away from the social site, but you might drive people to specific sites or locations on that social platform.
Social media and ecommerce convergence trends brings growth opportunity for brands
Why should retailers care about social commerce?
A lot more brands are now leveraging social media checkout and shopping integrations as modern consumers engage with social commerce more often than before. Integrating ecommerce with social media allows consumers to search brands via social content and to explore products they usually would not look for on an ecommerce platform.
Around 75% of consumers rely on social media to help guide what they plan to buy which means individuals are actively and always looking for product recommendations.
Let’s take Facebook, for example. Facebook rolled out its shop feature in 2016, allowing businesses to create a shoppable storefront directly through the social media platform. In-app purchases like Facebook and other familiar platforms offer the ability to purchase without visiting the actual company site. It is no surprise now for retailers to directly connect products to their consumers, creating shortened and simpler customer journeys.
The major factors that will fuel its rise includes visual content, cheaper data, improvement in user experience in terms of native checkouts and payment security and the continually increasing amount of time spent by millennials and the younger generations on social media apps.
Here are the business benefits of social commerce.
- Consistent Audience Growth: The advantage here is that you do not necessarily have to target your final audience. Thousands of new users join social media sites every day, for example Facebook generates over billion active users each month. One of the most important considerations for any business online is how to reach and sell to its target audience. For companies using social commerce, their followings are continuously growing and accessible.
- Higher Search Engine Ranking: Social commerce increases traffic to your website which will overtime influence your ranking on search engine results. Sharing links to content on your website through social media is successful when driving traffic from social media users. It also allows your audience to comment, like or share to reach an even larger audience.
- Authentic Engagement and Traffic: Another significant benefit of social commerce is the engagement and reach that businesses can get whenever they share content. Showing up in a follower’s updates feed on a regular basis is a successful branding opportunity. Social commerce encourages people to connect with a business through two-way communication. This allows customers to not only engage with your business, but it also gives them the opportunity to use social media as a powerful customer service channel to solve problems.
- Customer Loyalty and Retention: By using social commerce, you are aiming to sell and promote your products/services, but you are also aiming to build good relationships with your target audience. By engaging with prospects, brands can build and maintain relationships to increase trust and further promote brand loyalty.
- Business Metrics from Social: You should be able to analyse your efforts and see if the results provided a positive ROI. Social commerce makes it effortless to evaluate performances. Facebook pages, Instagram business accounts and tweets on Twitter have built-in metrics for impressions, engagements, and reach.
- Livestreaming Commerce: As more than a sales channel, livestreaming gives real-time communications with consumers. Brand representatives are able to help customers select the most suitable products.
Big data has significantly changed the way businesses market on social media
Big Data enables companies to generate a 360-degree view of their customers. It is transforming retail sales in ways that were not achievable just a few years ago. It has changed the way these teams engage with customers by allowing businesses to make smarter decisions, as a result, this helps to increase profits and customer satisfaction.
However, to attain real value out of data analytics, retailers need to consider aggregating their data across disparate systems into a single, unified view throughout the organisation. Once in place, retailers will gain true insights which will help plan customer retention strategies.
Learn more on how big data benefits businesses today.
Social commerce engines like Facebook and Instagram offer new sources of insight driven by their extensive behavioural and product-experience data. They run millions of product pages on which consumers find product reviews and answers to potential questions.
In the thriving digital world of consumer behaviour, big data documents the consumer journey across millions of products. Web analytics across social commerce engines track how consumers engage with product narratives across multiple products and categories. By combining behavioural data with product-level narratives, provides unparalleled access to the consumer experience.
Retailers with access to this information would be wise to leverage the data they can use from the social networking sites.
Read our guide to see how big data is already transforming ecommerce marketplaces.
Embrace the Social Commerce Revolution
Social commerce will become a key revenue channel as it has been slowly gathering momentum in the last few years. Social media channels are no longer just advertising channels, it is a great way for brands to acquire more customers at a small cost besides simplifying the purchase journey.
Retailers need to embrace the overall evolution of ecommerce and meet consumers expectations -creating an efficient, seamless experience across all sales channels. With the right strategy, retailers can be in the space where today’s customers are shopping, but also where future customers spend the most of their time.
While today’s consumers may go online to search for a product that they need, social commerce could fill a void when people go online without knowledge of what they are looking for or even intend to buy. As a result, this can increase product discovery.
Staying connected to customers is a retail challenge. Brands need to maintain relationships and inspire customers while understanding their purchase-making decisions and how/where they shop.
Data Clarity are always on top of the challenges and opportunities this presents for retailers. We conduct data audits for organisations to highlight the current capabilities, strengths, weaknesses, and opportunities.
Contact our data experts today to discuss how to gain true value from your organisation’s data.