13,902 We are social, Can social commerce be the next wave of retail?

Can social commerce be the next wave of retail?

In this post, GlobalWebIndex‘s Strategic Insights Analyst, Olivia Valentine examines how the big social platforms are building up their e-commerce credentials and the opportunities for retailers and brands.

Over the past five years, social media’s coming of age has seen a lot of shifts that are now the new norms. In a relatively short period of time, social platforms have evolved way beyond a space for communication, personal sharing and networking – towards a place where consumers can engage in a myriad of behaviours that aren’t so traditionally social.

Social behaviours aren’t the primary motivation anymore
Back in 2014, around half of internet users said they mainly used social media to stay in touch with what their friends were up to. This was the top motivation back then, and by some distance, with a 14 percentage-point lead over all other options. But fast forward to 2018 and a lot has changed.

Those activities that defined social media from the beginning – like staying in touch with friends, voicing opinions, and sharing personal content – still hold the top three spots when consumers are asked about their motivations behind visiting social media, but it’s the percentage differences over time that are most revealing. Those activities just mentioned have seen the biggest decreases in the last four years, whilst more purposeful activities like networking for work or researching products to buy have seen the greatest increases – the latter rising by 26%. Among Generation Z, who hold a huge $44 billion in buying power, this motivation has seen a 37% increase.

In short, there’s an ongoing and gradual transition taking place, whereby personal sharing is becoming more of a side dish than the main fare. It’s now purpose-led activities that traditionally lay outside the social arena that are drawing consumers in.

There is a blurred line between content and commerce
It’s not news that brands and marketers have succeeded in making themselves visible and accessible to consumers on social media platforms. You don’t have to scroll far down your social feed before coming across content created with promotion in mind.

As a result, social media has become a key way in which consumers come across and research new brands. In 2019, 38% say they typically discover brands via social media ads and 1 in 4 through recommendations or comments they see on social media. As a point of comparison, 35% say they do so through ads seen on TV. During brand or product research – when consumers are purposefully searching for information or inspiration – 42% are mainly using social networks, making this the second-biggest go-to behind search engines.

The boom of influencers has had a pivotal role in the shift towards content consumption and commerce behaviours. Whether mass or micro followings, influencers give brands the opportunity to reach consumers through authentic experiential marketing forms that offer entertainment and a personal connection, all of which we know they crave.

But with all this in mind, social media still has a big shortfall; the shopping experience isn’t seamless. The top social platforms have made attempts in the past, but consumers are mostly having to be redirected to retailer websites to complete purchases, lengthening the decision-making window between liking and buying.

But Instagram is becoming a one-stop shop experience
Instagram has already placed its bet on the intersection of social media and retail and is increasingly a place to browse products and be inspired. A third of those discovering brands on social media say they’ve clicked through posts to purchase, and on Instagram specifically, 1 in 5 users say they clicked on a sponsored post last month – using the Shop Now or Learn More buttons.

The launch of Instagram’s Checkout feature is the latest in its slew of updates over the past year, and the biggest sign yet that social shopping is here to stay. The new feature lets consumers browse images and videos of items in their feed and make the purchase directly from the app, without being redirected to a website. Big names are already using it too including Nike, MAC Cosmetics and Kylie Jenner Cosmetics.

When we look across product categories to compare consumers’ online shopping habits, it’s FMCG products, like packaged foods and personal care products, alongside fashion items and make-up, that seem best suited to the social shopping experience. As these purchases are more likely to be impulsive, lower-value or “show-roomed” (where shopping begins in store but completed online), they have more online purchasers than online researchers, showing how consumers are not only happy to buy them online, but also that they’re happier to take immediate action.

Becoming an online marketplace in this way – pushing consumers through the purchase funnel from discovery to purchase – will add a substantial revenue stream for Instagram, but most importantly, will give Instagram’s huge base the frictionless shopping experience that they’ve come to expect.

But can social commerce be the next wave of modern retail? 
Well, it’s certainly on its way. Retail is certainly transforming and consumers’ online buying habits are constantly shifting too. As the top platforms carve ways for consumers to act on impulse and interact directly with brands in a seamless fashion, the line between social, content consumption and commerce is continuing to blur.

There will surely be a chunk of consumers who are onboard with the convenience of purchasing directly through social media. The challenge will be achieving mass adoption by both consumers and businesses, and addressing the obvious security concerns that surround buying directly through social media.

Recently, We Are Social helped LEGO Wear to launch its first-ever exclusive range of adults clothes by using Snapchat’s AR technology to create a pop-up store which could pop up anywhere. Find out more here

The post Can social commerce be the next wave of retail? appeared first on We Are Social.

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