Is Social Commerce The Future of Shopping?

You’re browsing Instagram, scrolling through the various posts, all of a sudden, you see an advertisement of your favourite t-shirt on sale. Without wasting time, you hit the buy here option on the Instagram advertisement, and your purchase is made – without visiting the merchant’s site or the bank’s site. Once the purchase is made, […]


  • You’re browsing Instagram, scrolling through the various posts, all of a sudden, you see an advertisement of your favourite t-shirt on sale. Without wasting time, you hit the buy here option on the Instagram advertisement, and your purchase is made – without visiting the merchant’s site or the bank’s site. Once the purchase is made, you go back to scrolling. The opportunity for marketers and sellers here is enormous. 

    We take a look at social media and eCommerce and whether it has the power to challenge existing heavyweights like Google, Amazon, and other players.

    The digital payments landscape has evolved to a great extent. From banking websites to payment aggregators, and now social media. The landscape has seen various players entering from time to time and disrupting existing systems that help merchants ease doing business. 

    The Advent of Social Commerce

    It all started with Facebook when they introduced the ‘shops’ feature on their website, app, and Instagram last year.

    These online marketplaces help marketers create personalised posts on Facebook or use the Facebook marketplace to sell their products. The move helped many small businesses function during the multiple Covid-19 related lockdowns. 

    Social commerce is the process of selling products directly on social media. 

    With Facebook and Instagram Shops, businesses can host product pages and manage sales within the social media platforms. The most significant advantage of social commerce is that it helps customers discover brands, browse, and make purchases without ever leaving the app.

    eCommerce Vs Social Commerce

    eCommerce refers to a shopping experience via a website or dedicated branded app. Social commerce, by definition, allows the customer to make their purchase within their social media experience. Social commerce is not e-commerce. With social commerce, the entire shopping experience — from product discovery and research to the check out process — takes place right on a social media platform.

    Also Read: How Livestream Shopping is Breaking the Boundaries of Luxury Retail 

    Who’s the Target Audience?

    Millennials, avid social media users, influencers, the list is endless. Instagram has stated that almost 70 per cent of shoppers first look at Instagram to discover products and brands that sell these. The increased popularity of social media stores or social commerce signifies that social media platforms are more concerned about evolving themselves for marketers. Instead of being limited to a product gallery that grabs eyeballs and then redirects customers to the merchant website, social media platforms want to have a larger share of the pie.  

    Today, social commerce providers are equipped to host and manage the entire shopping experience for customers on their platforms, without the necessity for customers to leave the website and visit merchant sites or apps like Amazon or other eCommerce service providers.

    With the ongoing pandemic, people are forced to stay indoors and follow social-distancing etiquettes. Social media sites ensure that their visitors spend more time connecting with their loved ones online and spending time shopping. 

    Customers are happy with the integration of social media, product discovery, payments and shopping all coming together in one platform. By 2027, the global social commerce market is expected to grow by 31.4 per cent.

    It’s All About Providing New Customer Experiences

    Globally the players for social commerce may seem different from one another, and there is an element of market monopoly. But social media platforms account for one-third to one-half of all eCommerce transactions. China has seen the successful usage of WeChat and Little Red Book in social commerce. The APAC region and the US have a far higher chance of successful social commerce than anywhere else in the world now. Despite that, it’s essential to know that customers still prefer to make purchases online from retailers. In China, Alibaba handles almost 50 per cent of the total social commerce. In the US, nearly 37 per cent of online businesses are conducted on Amazon. If most customers are still using eCommerce merchant sites to make purchases, what benefits are social media platforms giving to buyers?

    Also Read: Reward and Be Rewarded

    Social Media platforms allow a culmination of shopping experience and online connections. When buyers can discover and choose products, share them with friends and family online for ideas and approval, and complete the shopping with easy return or refund policies, without navigating once from the social media platform itself, the result is a win-win combination for marketers as well as customers alike. No one likes to move away from their ‘current state’. Culminating a shopping experience while de-stressing online seems like the best offering for customers.          

    Who Are the Big Players?

    Facebook and Instagram are the marquee players. 

    Facebook Shops are highly customisable and allows marketers to choose which collections or goods to feature and customise the presentation to suit the brand. The Facebook for business page helps marketers connect with potential and existing customers where news of new product launches, discounts, contests and availability of products can be shared.  

    Instagram Shops allows users to buy products featured in posts and stories (photos and videos) from anywhere in the app. Instagram’s Shopping Tags allow businesses to tag their products in their Stories or posts. Business profiles can create a customisable storefront page that acts as a curated collection of products for sale. Each product gets its detail page, featuring pricing, media, and a detailed description.

    TikTok has already taken a step towards social commerce by partnering with Walmart. With this partnership, Walmart showcases buyable products during a TikTok Livestream. The shopping will be completed without TikTok users having to exit the platform. TikTok also launched the ‘Small Gestures’ option in April 2020, which allowed users to send free, virtual gifts from a range of brand partners within the app. that promotes virtual shopping tendencies.

    Also Read: Shoppable Social Media Predictions

    Others rushing to join the social commerce bandwagon are Pinterest, with its ‘complete the look’ feature that pushes customers to pick up relevant home decor and fashion products from merchants through the linking of product pages and catalogues on the merchant site to the in-app display. Although, Pinterest does not strictly offer social commerce. If a user tries purchasing a beautiful artefact on Pinterest, they will be sent ‘away’ from the app to a merchant site to complete the transaction. However, the brand discovery on Pinterest is tantalising. Snapchat has partnered with many beauty brands and renowned influencers like Kylie Jenner, Kim Kardashian, Shay Mitchell and Spencer Pratt. A few brands, such as Gucci, have also announced their presence with product launches in collaboration with Snapchat, and more are in the pipeline. 

    Not interested in missing a share of the social commerce pie, Twitter, in February 2021, announced that it is testing various commerce features. However, they’re still in the early stages of development. The developments expected from Twitter include new Shop buttons in tweets and on-platform stores, and other tools. 

    Is Social Commerce Equipped to Handle Bulk Transactions?

    The business prospects look exciting. Let’s take a look at a few of the challenges that are bound to come up.

    Increased Interactions

    Social media stores are accessible by a huge population, and buyers will have questions about social media. That will increase the number of messages merchants receive in-app. Replying to every message individually across platforms will be difficult for the merchant. Customers who message but don’t get a response fast enough will be the first ones to churn. How can businesses take care of that? By using chatbots that use AI to handle simple questions and requests. This will ensure merchants can easily manage their store’s communications and drive up customer engagement. 

    Lack of Convenient Payment Options

    Payments are still primarily driven by credit and debit cards. Users are required to manually input grid values, CVV numbers, or pin numbers for mobile payments. This creates friction and room for errors. Lack of appropriate details at the moment of shopping can mean a potential loss of sale. How can this be overcome? By streamlining the in-app checkout system and leveraging digital wallets, virtual cards land other in-app card detail storing options. Integrate autofill options into the purchase process.

    Most Shopify-powered eCommerce platforms already provide systems where the customer doesn’t have to input all their details repeatedly. The transaction details are remembered by the app and can be favourited by the buyer so that the next time they wish to make a purchase, the process can be less cumbersome. 

    What Do the Stats Say?

    Facebook is the number one social media platform with 2.8 billion monthly active users and 1.84 billion daily users it’s not a surprise marketers flock to it. A Facebook report states that over 200 million SMBs use Facebook’s tools for business. Users spend an average of 19.5 hours on the social media app each month. Compared to other social media platforms like WhatsApp and Instagram, where people spent an average of 19.4 hours and  10.3 hours per month. The report also suggests that  78 per cent of U.S consumers found products on Facebook. 

    Instagram has over 1 billion users worldwide and saw a 22.9 per cent jump in active users in the last quarter of 2020. Instagram’s user base is young, and over 71 per cent of users are below 35-years-old. Users spend an average of 53 minutes a day on the app, compared to 58 minutes per day on Facebook. A study tells us that approximately 71 per cent of U.S businesses claim they use Instagram for business. 

    70 per cent of hashtags on Instagram are branded (monetised). 50 per cent of Instagram users follow at least one business. Almost 80 per cent of Instagram users finalise their merchandise after seeing it on a social media platform.

    Pinterest facilitates shopping more than working as a social commerce platform. With 367 million active users, marketers take the purchase intent of Pinterest users seriously. A whopping 48 per cent of users pursue shopping as an activity seriously after viewing products on the platform. 

    Also Read: Customer Profiles That Businesses Can’t Ignore

    Good To Know!

    A Pew Research report says, ‘Even as other platforms do not nearly match the overall reach of YouTube or Facebook, there are certain sites or apps, most notably Instagram, Snapchat and TikTok, that have a solid following among young adults. A majority of 18- to 29-year-olds say they use Instagram (71 per cent) or Snapchat (65 per cent), while roughly half say the same for TikTok.’

    Good times are in store for businesses and customers. Marketers today are consciously moving away from traditional marketing practices and making a conscious effort of connecting with their customers. With social commerce, good times are in store for marketers and customers. 


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