Global eCommerce spend this peak shopping season is set to hit a record-breaking $910bn, up 11% year-over-year. This trading high forms a significant part of the predicted $4trn being spent online during 2021, again a record sum.
Yet grabbing a share of that bumper harvest is no walk in the park and brands are constantly looking for the competitive edge. Could the world of social commerce be the answer? Are brands increasingly looking to social to drive sales?
Social Usage as a Trend
As a starting point, let’s look at social usage as a trend. There is no doubt that eCommerce sales are heavily influenced by online engagement. At least 72% of US adults use some type of social media. For many users, social media is part of their daily routine. 70% of Facebook users and around 60% of Instagram and Snapchat users, visit these sites at least once a day.
The UK is home to 53 million active social media users, which translates to an impressive 77.9% of the population. UK adults spend over an hour a day on social media, with Facebook being the most popular platform.
Overall, social media users jumped by more than 13% over the past year, bringing the global total to nearly 4.2 billion. That’s over 1 billion new users over the last three years. Importantly, according to the Global Web Index, the average number of social media accounts a millennial or Gen Z-er has is 8.4 worldwide, up 75% from 4.8 accounts in 2014.
But What About Social Shopping!
When it comes to completing a purchase in a social app, about 1 in 3 shoppers globally have made a purchase on social media in the past year. When you break it down by age, that number climbs to 43% of 18-24-year-olds and 47% of 25-34-year-olds. While less common with shoppers 35 and older, buying on social media is growing fast.
These purchasing figures are a great indication of the potential of social commerce but we feel they should be treated with caution, as many consumers are unaware of when they have switched from social platform to brand site.
Facebook is currently the most popular platform for social commerce but others are catching up, as they integrate more shopping features. Evidence is building that TikTok will be a shopping force of the future. A new study from Nielsen finds that 68% of TikTok users find its advertising content to be unique from a competitive platform. Whilst, a 2021 Adweek-Morning Consult survey shows 49% of TikTok users said they have purchased a product or service from a brand after seeing it advertised, promoted, or reviewed on the platform.
With over 1 billion active users, Instagram is also considered a strong social selling option. Out of that billion users, over 80% of Instagram users discover new products/services on the platform. And that journey continues for many, as after seeing a product/service on Instagram, 79% search for more information, 37% visit the retail store and 46% make a purchase.
How Much are Social Shoppers Spending?
According to eMarketer, social shoppers will spend slightly more than $400 on average in 2021 (that’s about $34 a month spread per year). About 90 million Americans are expected to spend $36.62 billion in 2021. While the transaction sizes are small right now, there are extra benefits, such as reaching new consumers.
The Driving Force?
Much of this growth, particularly for B2C, is driven by the pandemic. The immediacy and convenience of shopping online, in its many forms, has led to massive growth. Of course, social distancing, stay and home orders and the rise of new variants, such as Omicron, prolong its impact and secure the trend.
“In a pre-pandemic world, [social commerce] was a nice-to-have. … The pandemic hit, and consumer demand just shifted. … [Customers] don’t shop at [a retailer]; they pull up in the parking lot, or they’re doing it all online. … Now we’re holding products back because we’re selling to the end consumer.
That same energy, those same products, that same supply chain, those marketing dollars, that marketing campaign — we’ve now shifted those into our social digital calendar. … It’s only online versus when you’d [formerly] have to find those deals in a brick-and-mortar [store].” Director of marketing intelligence, CPG,
Social Commerce and B2C
The same Forrester report shows that 83% of B2C organizations are investing in two or more social media shops, and more than a third have a presence in four shops or more. Obviously, this makes sense when you consider the consumer’s blossoming use of multiple platforms and the brand’s need to be where the consumer is.
Unsurprisingly, the CMO Survey 2021 research shows that social media spending has increased from 13.3 % of marketing budgets in February 2020 to 23.2 % in June 2020 —a 74 % lift. CMOs anticipate that social media investments will remain high at 23.4 % of marketing budgets into 2021.
Is Everything Equal in the World of Social Commerce?
Not quite, there are many ways to approach social commerce and selling and as leading brands have demonstrated, you need to be agile and look at all the options.
Key options for social commerce:
· Social commerce is selling directly to your customers on social media platforms. Everything from discovering your product or service, to a buying decision, to the checkout process happens in the app or platform they are already using.
· Social selling is when brands use social media to identify, connect with and nurture sales prospects.
· Social media eCommerce marketing can involve building brand awareness, advertising, community management, social customer service, social listening, competitive analysis, social commerce and social selling.
eCommerce Transactions on Social Platforms vs The Brand Site
The latest research from SmartInsights indicates that consumers are more likely to convert by clicking through to the eCommerce site to complete their transactions. However, a notable percentage is transacting directly via social platforms. Interestingly, female consumers are much more likely to click-through to the brand site, while male consumers seem content to check out directly on the platforms.
Global Web Index also recently concluded that social channels are an excellent space for brand discovery and product research. They believed that social platforms were yet to fulfill their potential for completing purchases, as some significant issues remain in the eyes of the consumer. The most notable issues for the consumer relate to privacy, data use, and inventory availability. Furthermore, a lot of consumers want to learn more about the brand before they purchase and that is best achieved through a visit to the brand site.
Of course, data is a consideration for the Brands too, as they may feel that customer data and engagement is best served within their own branded site, where the full brand experience is available.
Brands are increasingly investing in social media this peak shopping season and beyond! They are using its many forms to make themselves visible to the consumer, so they can discover and be inspired about their brand and product. Innovation in social media is accelerating with many brands now delivering a wide range of content and promotions across multiple platforms. As a result, these brands are reaping the rewards and are seeing increased engagement across social platforms.
When it comes to purchasing it seems the vote is still in the balance. The brand experience, inventory and privacy issues are far from solved. So it pays for brands to invest in all the social options of social selling, social commerce and social media marketing. Ensuring the consumer has options on how they want to purchase.
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