U.S. retail social commerce sales are expected to rise by 34.8% to $36.09 billion this year, representing 4.3% of all retail eCommerce sales. Our 2020 social commerce forecast is trending upward from our initial analysis of 19.8% growth to a now projected 37.9% growth.
According to Grand View Research, by 2028, the global social commerce market size is expected to reach USD 3,369.8 billion. The same report anticipates that it will expand at a CAGR of 28.4% from 2021 to 2028.
What does this rise in social commerce mean for businesses marketing to consumers? For starters, it means that a social commerce strategy is a must. Additionally, this eCommerce strategy has to be optimized to provide the best experience possible for consumers. Social commerce cannot stand alone, but rather, must be supported by a cohesive digital experience.
For reference, the digital roadmap strategy guide is a great place for brands to start as they look to incorporate the social commerce trends of 2021 and beyond.
What is Social Commerce, and Why is it Important?
Social commerce is far more than just marketing to consumers via social media platforms. Instead, social commerce encompasses a vast array of channels, including all of the following as outlined by Heidi Cohen:
- Group buying
- Social shopping
- Shopping via mobile apps
- Retailers adding social features
- Shopping integrated into social media
Why is social commerce important?
- It helps companies engage customers with their brands according to customers’ social behaviors. Utilizing artificial intelligence, retail brands can now harvest real-time data on consumers, turning it into practical insights. For example, if data shows that a potential buyer is influenced by what celebrities have to say about recent clothing line releases from Ralph Lauren, the company could show an Instagram ad to that consumer with a celebrity endorsement.
- It provides all the information customers need to research, compare, and ultimately choose you over your competitor. By focusing on a cohesive digital experience, you can essentially follow your consumer from channel to channel, reinforcing your UVP.
- It encourages purchasing from a third-party company within the native social media experience. For example, consumers can browse and compare products on Facebook and then make a purchase on Facebook itself instead of going to the company’s site. Another example would be a consumer learning about a product in a tweet or an Instagram post and then purchasing directly on these platforms.
Heidi Cohen says it well:
“While shopping is essentially a social experience — think girls shopping at the local mall — online shopping is distinctly not social. Yet, regardless of where the purchase is made, many shopping decisions involve more than one individual’s input, be it a couple, parent and child, or friends.”
With evolving technology, notably increased use of smartphones and social media platforms, online shopping is changing and becoming more social. 74% of consumers now rely on social networks to guide their purchase decisions. It’s a no-brainer to sell where your customers are rather than trying to lure them to your site.
Social Commerce FAQs
For companies interested in investing in a social eCommerce strategy, it is critical to first understand social shopping and which eCommerce design will best serve consumers in 2021 and beyond.
The following questions are frequent inquiries brands might have as they enter the social shopping sphere:
Which Social Media Platforms Are Most Effective at Driving Social Commerce and Why?
While social media isn’t the only channel for social shopping, it is a critical component.
In fact, 81% of shoppers say that they research products on Instagram and Facebook before making a purchase. Currently, Instagram and Pinterest provide the most relevant social commerce experiences for brands, but Facebook, Snapchat, and TikTok are all expanding their offerings.
Which social media platforms are most effective also varies by audience. For example, Generation Z does 2-3 times more shopping on social channels than the average consumer, preferring Instagram and Snapchat for social shopping. Conversely, Generation X favors shopping on Facebook.
For this reason, it is critical for brands embarking on a social eCommerce strategy to tap into detailed data on their target audiences.
Which Brands and Product Categories Should Invest in Social Commerce?
Apparel and accessories remain the largest category for social commerce, but consumer electronics, cosmetics, home decor, and consumer goods are also key players. B2C brands featuring new and differentiated products and/or aspirational imagery are best suited for the social commerce environment.
For instance, Ralph Lauren Home is a prime brand for embracing social commerce. Home decor is a highly social purchase. Consumers are heavily influenced by the opinions of family and friends when buying home products. Social shopping can help guide consumers as they explore new home decor options, creating a shareable social experience with family and friends.
When a consumer wants to decorate their home, they might begin with inspiration from Pinterest, creating a home makeover board. From here, Ralph Lauren Home could use Pinterest to serve up highly-targeted content that inspires the homeowner. Layering into this social experience, family members or friends can share the content for a second opinion. The sale itself can be quickly closed via social shopping.
Procter & Gamble is another brand prime for social shopping. P&G touches everything from cosmetics to apparel and can benefit greatly from direct-to-consumer marketing via a social eCommerce strategy.
For example, a busy mom who needs a new foundation might hop onto Facebook and encounter a livestream event where a fellow mom shares her recent experience purchasing a new foundation. After hearing how quickly this mom can get ready in the morning using this smoothing foundation, the first mom decides to snag a bottle of foundation.
Through a seamless experience, she doesn’t even need to leave the Facebook platform, completing her purchase in a matter of minutes. Two days later, after using the new foundation, she hops on Facebook to share a post about how great her recent purchase was, urging other moms to try it out.
It is easy to see how various brand categories can benefit from the power of social shopping.
Which Social Commerce Strategies Should Brands Consider?
Brands looking to drive social commerce sales need to consider all of the following:
- Content/creative assets
- Media strategy
- Audience amplification
Also, a brand investing in social eCommerce needs to ensure a measurement strategy is in place from the start to demonstrate whether their efforts are working. A measurement strategy also allows brands to adapt as needed to their consumers’ data.
Imagine that the popular diaper brand Pampers decides to invest in social commerce. First, they will need to think through how content and creative assets will be created and where they will be surfaced. They will then need to ensure they have a robust media strategy, building across social platforms. Next, they will need to strategize around how they will amplify their message through their audience. Finally, they need to close the loop with a quality strategy around conversion.
The company would also need to build in a measurement strategy, allowing them to learn from their consumers as they go.
Pampers might invest in a digital experience that spans social platforms and use audience data to target a specific portion of their consumer base. Perhaps they begin with a campaign targeting new moms.
They might also invest in content that surfaces on Pinterest, targeting expecting mothers. Here, Pampers can deliver value to these moms, assuaging their fears and offering a discount on a trial package of Pamper newborn diapers. An expectant mom looking to save money converts, purchasing a package of diapers with the embedded discount code.
Pampers then offers a button to allow this mother to share this great deal with friends. In a matter of seconds, the expectant mother shares the promotion with her friends.
This is one example of how social shopping can use a variety of tactics to reach an audience while also creating an amplification effect through the social aspect of buying.
Social Commerce Tactics You Can Use Today
It’s easy to see why social commerce is becoming a critical component of any brand’s future success. For brands looking to build out a cohesive social shopping experience, the following practical tactics can help:
- Engage through Facebook Messenger with consumers. It is critical to humanize your brand and connect with consumers via Messenger.
- Invest in intelligent automated bot checkouts. Bot checkouts can help close sales for you 24/7. Be sure that any bot utilized is optimized to provide a seamless experience.
- Create cohesiveness by managing your social commerce with your eCommerce platform. Integrating these platforms ensures that inventory is always accurate and you are marketing the right products at the right time.
- Consider promoting low-cost products first. Start your strategy out with low-cost products, which tend to sell better via social channels. From here, you can build a data set on consumers, learning more as you go.
- Gather as much information as possible from a potential buyer. Never neglect to gather important information, such as their email address. This can help fuel further marketing efforts, allowing you to create an omnichannel approach.
- Choose an integrated platform that enables you to manage everything in one spot. This will ensure that data is not siloed and teams across the business can collaborate in real-time.
Vaimo Makes It Simple for Brands to Tap into Social Shopping
When it comes to building out a social commerce strategy, brands should look to a solution that will be cohesive and simple to manage. Solutions such as Magento allow a brand to tie their entire digital experience together.
Vaimo makes it simple for brands to tap into social shopping. Our team offers eCommerce design backed by expertise. From Magento development to creating custom-built strategies backed by real data, we can help brands prepare for 2021 and beyond. Reach out today to learn more about how your brand can invest in the next phase of eCommerce.