Remember that fidget spinner craze ignited by a seemingly random Instagram video? Social media’s influence has transcended sharing funny cat clips; it’s now a booming marketplace. By 2030, social commerce is expected to be a staggering $6.2 trillion industry. Why? Because it lets consumers discover and purchase products with a few clicks, while offering businesses a golden opportunity to reach new audiences and boost brand engagement.
Social commerce blends social media and e-commerce, allowing users to browse, share, and buy directly within their social networks. Features like influencer endorsements, user reviews, and live-streaming shopping events all leverage the power of social connections to facilitate sales. That said, it’s no surprise that the social commerce revolution might make traditional shopping carts feel more outdated than dial-up internet. What is a brick-and-mortar retailer to do?
A Social Commerce Evolution
With their visual- and video-first approach to engagement, social platforms like TikTok and Instagram have been pivotal in shaping the evolution of social commerce.
Instagram was one of the first platforms to introduce shoppable posts, allowing retailers to seamlessly integrate product promotion with their content, turning each post into a virtual storefront.
TikTok’s short-form video approach has revolutionized discovery. Forget browsing catalogs; #TikTokMadeMeBuyIt highlights the power of user-generated content, where everyday people become brand advocates, driving massive trends and sales.
Product Discovery
How are shoppers finding the perfect products on social?
A Sprout shopping study found that targeted ads are the No. 1 way social shoppers are discovering products. The study also found that a friend’s recommendation, comments or product reviews, familiarity with the brand, and a significant other’s recommendation all contributed to why consumers purchase on social media.
From Instagram to TikTok, social commerce tactics are continually evolving, creating new opportunities and challenges for retailers:
1. Influencer Marketing: Partner with industry experts and celebrities to reach targeted audiences and leverage their credibility. (More on this billion-dollar industry below)
2. Live-Stream Shopping: Live-stream shopping is on the rise as an effective real-time engagement strategy. Retailers use livestreams for product demos, Q&A sessions, and behind-the-scenes looks, enhancing customer understanding and increasing sales.
3. Shoppable Posts: Shoppable posts are reshaping retail by allowing customers to directly purchase products featured in posts. This streamlined process eliminates manual searches, boosting the likelihood of conversions.
4. Micro-Influencers: Micro-influencers, with smaller but engaged followings, are gaining popularity for their authentic promotion. Brands are turning to micro-influencers for a more genuine connection and potentially higher conversion rates.
5. Social Audio Emergence: Social audio, seen on platforms like Clubhouse, Twitter Spaces, and Facebook Rooms, is the upcoming trend. Retailers recognize its potential to foster intimate customer interactions, build community, and uniquely promote products.
Influencers’ Sway Rising
Influencers, with their massive followings, serve as trusted voices that can influence consumer behavior. This influencer-brand collaboration has also created a $21.1 billion industry. Brands leverage influencer marketing campaigns to showcase their products in an authentic and relatable manner, tapping into the influencers’ connection with their audiences.
Instagram remains the most popular platform for influencer marketing campaigns, and a recent HubSpot survey of marketers revealed that 72% said they work with influencers and creators.
Move over celebrities. HubSpot predicts that one of the top social media trends for 2024 will be more brands swapping celebrities for micro-influencers. These are influencers with smaller, more niche accounts of 1,000 to 100,000 followers who participate in affiliate programs and are often successful at building trust in the brands with which they work because of their expertise in the area.
User-Generated Content Driving Sales
User-generated content is instrumental these days for driving sales and building brand awareness on social media. By allowing customers to share their experiences with a product through photos, reviews, or videos, this builds a sense of community, authenticity, and trust. That’s important considering 60% of marketers believe authenticity and quality are equally important elements of generating successful content.
Retailers often offer affiliate marketing opportunities to incentivize users and harness this content effectively to create a more genuine connection with their audience. Here’s a great example:
Livestreaming Picks Up Steam
Live shopping allows businesses to host events where they can showcase their products in real time. Consumers can interact with their favorite influencers and brands, discover new products, and ask questions. The format delivers instant feedback, enabling agile retailers to continuously improve the customer experience.
Research shows that by 2026, U.S. livestreaming commerce sales could account for more than 5% of total ecommerce. The CivicScience data also shows that Gen Zers are most likely to have purchased a product on a live shopping stream, followed by Millennials.
Brick and Mortar for Digital-First Audiences
For brick-and-mortar retailers, it can be tempting to focus more on face-to-face interactions than adapting to the preferences of digital-first audiences. Yet it’s possible to leverage the best of both worlds. To engage effectively, retailers must embrace a multi-channel approach. This involves not only having a strong online presence, but also seamlessly integrating their digital and physical storefronts.
Embracing AI in retail can give consumers a reason to come to your location. Giving customers personalized and convenient experiences through features like augmented reality try-ons, interactive product showcases, and customized recommendations will elevate brick and mortars in the digital natives’ minds.
Retailers must provide customers with a cohesive experience across all touchpoints, ensuring that they can effortlessly move from discovering a product on social media to making a purchase in-store or online. If you can’t do it well, don’t do it all.
An Opportunity to Connect
The interconnected nature of social commerce involving brands, consumers, creators, brand advocates, and influencers offers brands a huge opportunity to connect more effectively with consumers.
Brands that succeed in social commerce can further learn how to leverage important data points and analytics to better understand customers’ behavior, using this information to tailor social commerce strategies, curate personalized content, and enhance the overall customer experience to convert shoppers during their highest moments of intent.
