The Annual State of Social Commerce report provides a comprehensive insight into key social commerce trends. Results highlight that social media is the most important new customer acquisition channel for many brands, but social commerce revenue is routinely underreported by approximately 245%.
- Social media is a great place to discover new products, but not for purchasing.
- Influencers and creators are valued for product recommendations, and “how to” advice, but consumers are wary about scams and authenticity, with the majority preferring to purchase from the brand, not the influencer.
- Clicking through from social is frequently a problematic experience, resulting in high bounce rates and low conversion rates when landing on the eCommerce site.
- Livestreaming is growing fast but most shoppers still see them as a way to discover new products, not make purchases.
The research discovered that the underreporting of social revenue is due to many consumers heading directly to the brand’s e-commerce site to purchase rather than clicking through and purchasing from the social media site.
In turn, two critical key performance indicators used every day by marketers to evaluate campaign success are significantly impacted:
- Customer acquisition cost (CAC) is used to evaluate campaign performance and is a leading indicator of profitability.
- Return on advertising spend (ROAS) is the primary measure of advertising effectiveness and used to allocate advertising budgets to channels and campaigns.
Additional State of Social Commerce Report Highlights
- Prefer to buy on brand site
The majority of consumers — when using social — prefer to start their shopping journeys on social media but actually complete their purchase on the brand site. 68% of respondents reported that they would prefer to buy on the brand site, and 17% reported that they have no preference between buying on social media or from the brand — leaving only 15% of customers with a stated preference to buy on social media.
- Experience issues
86% of respondents reported issues when migrating from social media to the brand site to buy. Inventory, pricing and promotions are often not synchronized, and the returns experience following a purchase is frequently problematic on social media, causing 66% of respondents to be reluctant to make a purchase through social again.
- Live shopping
Livestream shopping events are rapidly growing in popularity, particularly with Gen Z and on video-focused platforms such as TikTok. 64% reporting that they had either purchased from a livestream, been to a livestream but not made a purchase, or had not yet been to a livestream but would consider going. Interestingly, only 36% reported that they would buy from the influencer on the livestream.
Study results show that customers have low levels of trust in both social platforms and, to a lesser extent, brands in relation to their personal data. Sixty-seven percent don’t trust social networks with their personal data, and 49% don’t trust brands with their personal data.