According to Strategic Market Research, the global industry of social commerce is expected to reach over $7 trillion by 2030, showing annual growth of more than 30%. E-commerce platforms are announcing their partnerships with social media channels, brands are heavily cooperating with influencers and investing in their own video buying services, and customers are getting more accustomed to purchasing directly on social media. In this environment, online stores should follow consumer demand and experiment with social commerce.
In this post, we’ll discover what social commerce is, why it’s beneficial, and how it works.
What is social commerce?
To easily define social commerce, it’s a shopping experience that happens entirely on social media. Users find posts or videos with tagged products and purchase them right on the spot, without leaving the social platform.
The trend of social commerce was mainly established by Chinese platforms, but other regions are not far behind: for instance, US and UK markets have over 35% and 23% of internet users, respectively, who’ve made at least one purchase through social media in 2021.
As research shows, an overwhelming majority of businesses are either already selling on social platforms or planning to do so:
Since social media is becoming a primary source of discovering new products (35% of consumers claim it’s their preferred way), it’s only logical that companies want to support product discovery with purchasing capabilities, allowing users to buy what they found on social platforms without leaving them.
The 3 major benefits of social commerce
Social selling is easy to start with and can bring a significant revenue increase. Here are the 3 major benefits offered by social media commerce:
- Frictionless shopping. When a user finds out about your product and then lands on your product page, the purchasing funnel can be blocked by different factors. The page might not fully correspond to what a user was searching for, the path to checkout might be too long, the item might be out of stock, etc. But when a user can discover your product on a social page, ask questions about it right there, and checkout without visiting another site, it’s a faster and more convenient shopping experience.
- Better alternative to social media advertising. Online ads, including those placed on social channels, have been a proven way to gain new customers for e-commerce businesses. But as the industry grows, the market gets overcrowded, ad competition gets stiffer, and customer acquisition gets less affordable. You can still run ad campaigns on social media, but social commerce can serve you as a great tool for easier and less expensive audience reach.
- Increased trust. Social commerce platforms open ways to represent products in real-life environments and actively collaborate with influencers. You can promote items during livestreams, demonstrating how they are used and what they look like in reality. You can use as many shoppable photos and videos as you like without worrying about dragging down the loading speed. Finally, having people who are popular on social media talk about and show your products is a strong social proof indicator.
The likelihood of users buying products after seeing an influencer livestream is impressive:
What social commerce platforms are out there?
The scope of social shopping has expanded to the point that big brands and retail platforms are developing their own social commerce sites or in-built capabilities. For instance, Amazon allows merchants to host shoppable livestreams, and Nike is creating an app where users can post brand-related content and make purchases.
But for most e-commerce businesses, using the good old social channels like Instagram and YouTube is enough. Let’s see how to run your store on different social commerce platforms.
Social commerce on Facebook
Facebook and Instagram started introducing shopping in 2016. Since then, social media commerce on these platforms has grown into a normal practice for many brands.
To create a Facebook Shop, you need to have a Facebook business profile and upload your products. You can do it manually or sync your store data (for instance, Shopify automatically syncs your catalog after you add Facebook as a sales channel).
Once you’ve done so, Facebook users can navigate to your shop and make orders right on this platform. However, this shopping experience is not available in all countries, and those users that don’t have the add-to-cart functionality will see the button that leads to a product page.
Regardless of whether a user can checkout directly on Facebook, they can interact with your Facebook shop similarly to your website: they can see available size options, product descriptions, return policies, and any other details you add.
When you make a sale on Facebook, the company charges you a fee: 5% per order or $0.40 per order of less than $8.
Social commerce on Instagram
Since Instagram and Facebook are both controlled by Meta, you can create your Instagram shop from your Facebook business account. The set-up process is very similar, and the fees are the same.
On both platforms, you can replicate your store structure, letting users browse different categories and search for particular products.
Given the overall visual nature of Instagram, it gives you more features on top of what Facebook includes. You can tag shoppable products on photos and reels.
Plus, influencers can tag your products on their profiles and earn commission this way.
When users click on the shopping bag icon on a post, they will see what products are featured and can navigate to those products’ pages, view their details, and purchase them within Instagram.
Video shopping possesses the biggest market share in social commerce—around 42%. 40% of shoppers bought something they discovered on Youtube, and 35% of all TikTokers purchased an item they saw on this social media.
Live streaming is already bringing huge success to brands: it helps increase conversion rates by up to 30% and achieve lower returns. As one of the largest platforms for e-commerce sites, Shopify saw a surge in livestreaming app popularity: their downloads grew by 61% in 2021.
YouTube is allowing e-commerces to create shoppable videos and livestreams. On top of that, the platform is working on creating shared experiences where video creators can promote products and lead users to featured brands. YouTube’s partnership with Shopify is one of the first steps this platform has taken to establish itself in the landscape of social commerce.
Social commerce on TikTok
TikTok incorporates a native checkout so that users can see a product and purchase it right away. Merchants can add a shopping tab to their profile and attract users to it. This platform allows for a diverse range of social e-commerce experiences: besides merchant-curated videos, ads, and streams, users can generate their own content about products and drive more sales to brands with viral videos or hashtags.
From an order completed on TikTok, you’ll need to pay a fee worth 2%.
46% of Pinterest users discover a new product or brand on a weekly basis. Even though the platform doesn’t include a direct checkout (although, it is already testing this functionality), businesses can attract new consumers to their websites by creating product pins. To do so, you have to apply to the Verified Merchant Program.
You can add pins designed as a product page. By clicking on such a pin, a user will land on your site.
Plus, you can organize your Pinterest profile to look like a shop and feature your product categories:
Twitter commerce functionality, called the Shop Spotlight, is currently accessible to the US audience and US-based merchants only. Companies can add products that will be displayed in a draggable gallery above their tweets. This feature was rolled out in June 2022, so the outcomes are still to be evaluated.
This gaming platform also has shopping potential. It may not be a classic social commerce example, but it can help you engage with a new audience. For instance, a cosmetics brand elf launched their account there to host streams with contests.
Chatting apps can serve e-commerces as an additional platform for product consultations and recommendations. For example, a company producing clothing care products reached a 14x increase in sales thanks to a WhatsApp chatbot that gave customers advice.
Take the most out of social commerce
As you can see from some social commerce examples, it’s a universal market trend that will only grow in maturity. It’s still new for many brands and consumers but already brings impressive results. It opens up new ways to sell and collaborate with influencers, boosts conversions, and expands brand awareness.
Plus, the most active social shoppers will continue fueling the demand. Research done by Accenture distinguishes different segments of shoppers based on their engagement with social commerce features. While the segment of mature shoppers is in the minority now, they are ready to browse for fun and pay 30% above the market.
If you run your store on Shopify, it’s super easy to start with social media commerce. More than other e-commerce builders, Shopify tries to keep up with the trend: it launched in-app shopping via TikTok, allowed merchants to create shop pages on Twitter, and introduced YouTube Shopping. The platform automatically syncs your product data and inventory levels; the only thing you need to worry about is creating attractive visuals and copy.
We hope this overview helps you navigate the world of social commerce platforms and decide on your strategies. Try incorporating your products and deals into social media and see how different users react and how many of them convert. Analyze social sales and apply insights into further campaigns. Happy social selling!