The Rise Of Social Commerce And Changing Patterns Of Social Behaviour
According to research conducted last year by Global Web Index (worldwide), Pew Internet Surveys (US), and OfCom (UK), more than half of the world’s population now uses social media. These users are currently spending 2 hours and 24 minutes per day on average, spanning multiple platforms across a typical average of 8 social networks and messaging apps. Active social media penetration reaches 63% of the populace in Eastern Asia, and 56% in Western Asia.
Increasingly however, people are turning to social media not just to connect with friends and family, or to follow the activities of their favourite online personalities or influencers. Social platforms like Facebook, Twitter, and WeChat are also serving as tools to interact and transact with favourite brands.
2020 was a year of significant growth in social commerce. For stakeholders in the eCommerce sector, one of the biggest consequences of COVID-19 is the shift that the pandemic has precipitated towards social platforms as the preferred medium of interaction with commercial brands, for consumers in Asia Pacific, and the world at large.
Charting The Rise Of Social Commerce
We can trace the origins of digital social commerce back to the early years of the 21st century, and across a number of social media platforms.
Facebook set the ball rolling in 2007, with first a limited opportunity for users to buy and display virtual gifts for friends, then a marketplace enabling the sale of items to those within your network.
Users had to wait until July 2014 for Facebook’s pilot test of its “Buy” button, which authorised sales of branded goods to users within the social platform. In 2015, Facebook then began its first experiments with in-platform exchange, allowing friends to split payments through Messenger.
When it launched Facebook Marketplace in summer 2018, Facebook introduced a peer to peer sales platform that could compete with Amazon, Google Shopping, and Etsy. For smaller businesses, Facebook Shops provides a digital alternative to the physical sales avenue.
Though somewhat slower off the mark, Instagram could capitalise on its existing popularity as a vehicle for fashion, beauty, and lifestyle products promoted by influencers. The platform introduced its Instagram Shop Now button in June 2015, and a “Buy Now” button for brands in the same year. By March 2018 when Instagram’s Shoppable Posts went live, brands could tag items in organic posts, providing users with a direct link to a checkout page for purchasing.
Over the course of the pandemic and in Asia Pacific in particular, live streaming for product promotions and experiences has taken off in a really big way. In response to this trend, Instagram is currently testing a live shopping experience which enables brands to tag products in their live streams for a Checkout-style follow up.
Like Instagram, visually appealing content is central to the Pinterest platform, which also thrives on viral appeal and the social sharing of content. In fact, some 80% of what appears on Pinterest consists of repins of previously shared material.
Pinterest’s foray into the social commerce arena began in 2015, with the extension of buyable pins to a few select brands. This scheme expanded in 2016, and in that same year Pinterest introduced a shopping cart allowing users to combine their purchases from multiple suppliers.
Some analysts argue that in order for social commerce to become mainstream and the principal driver for online commerce, social implementations must become more open to the use of third-party tools and networks. For example, brands like Marvel are using third-party solutions for automated chatbot checkouts, in order to sell tickets directly from organic and paid social media posts.
Meeting Consumers On New Social Avenues
The Global Web Index consortium research reveals that 4.57 billion people around the world now use the internet, of whom 346 million new users came online within the last 12 months. Significantly, 99 percent of total social media users are accessing their platforms via mobile at some point. This is already abundantly evident in China for example, where mobile rules, and people are using social media to engage with brands at every stage of the customer journey.
Clearly then, it’s important for brands to identify where and how consumers are accessing social media -- and also how they view the medium and its role in the buying and selling processes. That’s why Facebook in its most recent patent application, “Processing Payment Transactions Using Artificial Intelligence Messaging Services” has taken a leaf from the WeChat playbook.
More generally, online shoppers and users of social media have grown wary -- and weary -- of the hard sell. In the social arena, engagement is the key rather than promotion. And the ways that you deliver that engagement must take into account the prevailing trends in customer behaviour.
Short-form video is the dominant medium in this respect, with video content getting five times more engagement even on less “sell” focused platforms like LinkedIn, and some 84% of consumers admitting to being convinced enough to buy a product after watching a video about it. Platforms like Facebook and Instagram are particularly successful at marketing in this manner to the Millennial and Generation Z demographics.
Though established platforms with video functionality such as Facebook and YouTube have a long-standing consumer base, newer outlets like Triller and TikTok are putting a focus on video-based social commerce. For example, in 2021 TikTok announced a partnership with eCommerce platform Shopify, enabling merchants to advertise on TikTok. The agreement includes the possibility of future in-app feature innovations.
Chatbots and “chat commerce” are enabling social platforms to bring personalisation down to the individual consumer level. By providing quick and simple answers to their questions, chatbots increase the engagement factor for consumers, and help build trust in the brand.
With big-name celebrity influencers out of the price range of most businesses -- and often associated in the minds of consumers with the hard sell -- brands are turning to the so-called “micro-influencers” to help in promoting their products and services. Influencers with fewer than 35,000 followers have a greater aura of authenticity which resonates with users, and get the highest engagement rate at 5.3%.
Word of mouth between consumers themselves is now a major currency in social commerce. User-generated content (UGC) in the form of Likes, Comments, recommendations, and general conversation can often tip the balance in users’ minds between choosing to engage with a particular brand and looking elsewhere.
Social commerce is also more about impulse buys inspired by engaging experiences, so the kinds of products to pitch via this medium should tend to be in the sub-$100 range. It’s no coincidence that China’s PinDuoDuo -- an app that facilitates group buying of products -- has been gaining in popularity. The app also integrates with WeChat and other big Chinese social media networks to facilitate sharing and interaction between friends, capitalising on the social proof and user-generated content aspects unique to social commerce.
Why Social Commerce Matters To Your Brand
According to Forbes research, 91% of consumers prefer interactive or visual content over conventional static media -- and the same percentage of people trust other users and their opinions more than straight reporting or promotion from brands.
Going further, consumers are likely to spend more, when their shopping experience is personalised. By capitalising on cost-effective social tools like chatbots and conversational interfaces, you can increase customer engagement while saving money and fostering trust in your brand.
The live streaming market will have an estimated worth of $184 billion by 2027. Using a live streaming solution from a reputable third-party provider will open a new channel for you to engage your consumers, while enabling you to analyse user behaviour within each live stream, better identify audience preferences and pain points, and monetise features like pay-per-view, and subscription services.
Social commerce puts both your promotional efforts and user-generated content (comments, likes, and shares) in a single venue, where you can meet consumers in the place and manner that they most enjoy. As customers worldwide continue in a state of uncertainty as the COVID-19 drama plays out, these channels provide both a short and mid-term opportunity for your brand to increase its outreach, speak personally to individual consumers, and build a larger community that’s both loyal to and vocal about your brand.