27 Mai Social Commerce – the social manifestation of e-commerce
Open Instagram, scroll through the feed, click on a picture here, click on a story there. On this everyday journey through social media, users also discover various products that arouse their interest. With just one click on the corresponding image, information such as price and description is immediately displayed. Another click on the desired product and you will be taken to the checkout. A few seconds later, after entering the required information, the purchase is already completed – without even leaving the app. This smooth purchase is made possible by social commerce.
What is social commerce?
Social Commerce (sometimes also Social Shopping) is a composition of the words social media and e-commerce. Companies use social media as advertising platforms to promote their products and their own brand. In doing so, recommendations to buy can be given which are based directly on the use of social media and thus largely correspond to the interests of the users.
And after consumers have been using the platforms for a number of years to find out about products and brands and to gather inspiration, they have also been able to make their own purchases via the respective social medium for some time now. Thanks to the so-called in-app checkout, they don’t even have to switch from the social media app to the corporate site to do so. This eliminates an additional hurdle on the customer’s path and lowers the inhibition threshold to purchase.
What is so special about social commerce?
A major disadvantage of e-commerce in contrast to stationary trade is often seen in the lack of social aspects. Only with difficulty is an exchange about products and brands possible. Not so with social commerce! In social media, the sharing of experiences but also of criticism is encouraged and a dialogue is created which forms the basis of social commerce.
In addition, social commerce gives companies the chance to tell the story of the product or brand instead of pure product placements. From the initial idea, through development and the people behind it, to the final product. In this way, the customer is given a look behind the scenes and the unknown behind a final, purchasable product is revealed. The product gains depth and is even humanised in a certain way. The resulting sympathy and fascination that is built up attracts new customers and ensures an increasing reach [1].
So it’s easy to imagine that the sales of an online shop can increase through social commerce, but there are also one or two additional advantages that should not be overlooked. Through the increased conversation, customer proximity can be established, which is always beneficial for the sale of a product. In addition, companies can use this feedback to adapt business models, improve customer service and develop products to meet the needs of their customers.
Social commerce in action
In contrast to China, where the model of social commerce is already an integral part of popular apps, it is still in its infancy in Europe. Various platforms are constantly testing new functionalities, changing the model or discarding it completely. In 2016 (2 years after implementation), for example, Twitter has scrapped its social commerce model. Other platforms, on the other hand, are successfully using the strategy and are continuously developing their functions. For example Facebook, Instagram and Pinterest [2].
Facebook was one of the first platforms to begin implementing social commerce features. For example, you can create a shop page for your own company on which you can upload your own product catalog after entering the shop details. Using e-commerce solutions such as Shopify and BigCommerce, purchases can also be made directly on Facebook.
With the help of the set up product catalogue, so-called dynamic ads can then be placed. In this case, personalised advertisements are played out to people who have already shown interest in the respective brand. All that is required is to design such an ad at the beginning, the rest is done automatically by Facebook.
The social media giant also offers the Facebook Marketplace, which is often compared to Ebay classified ads. Here users can buy, sell and give away products.
The fact that Instagram is not to be neglected by companies has often been discussed in the meantime. However, due to the constantly improving social commerce aspects of the Facebook subsidiary, the platform now also offers more and more possibilities for actual sales processing.
So-called Shoppable Tags have been available since 2016. The prerequisites for this are the use of the company account on Instagram and the depositing of the product catalogue on Facebook. This catalog must then be linked to the Instagram profile and products can be marked on pictures (similar to a person). If the user then clicks on the image, a preview of the catalog image is displayed, along with the name and price of the product. This function is also available in the Stories since 2018.
Initially, after tapping on the product, the user was redirected to the company’s website and had to complete the purchase there. According to Instagram’s own information, 130 million Instagrammer users tap on marked products in such shopping posts every month. [3]
To further exploit this enormous potential, the checkout function was introduced in 2019. Here, the entire purchase process takes place directly in the app. Only address and payment information has to be stored on Instagram and you can shop at different shops without leaving Instagram. However, users have concerns about security and privacy: 80% cite this as a reason for not yet having made a purchase via social media. [4]
The social medium Pinterest is mainly used to discover new ideas and gather inspiration – obviously a good place to promote and sell your products. If you look at some statistics, this assumption is confirmed: 93% of pinners use the platform to plan purchases and 73% of active users claim to have bought something because they have seen it on Pinterest. [5]
And with the introduction of the catalogue function in March last year, these statistics are quite promising. The function allows you to upload the entire product catalogue and then convert the individual articles into purchasable product pins. In addition, Pinterest now offers the „Shop“ field for company profiles, which users can use to make purchases.
Conclusion
While social commerce is already an integral part of everyday social media life in China, the various functions are only just being gradually installed and improved in Germany. And as with other trends that are more or less still to come, the development remains to be seen. However, not without taking the first steps as a company and taking full advantage of this opportunity.
[1] CXL: Social Commerce (2019)
[2] mobile zeitgeist: Social Commerce: Eine Bestandsaufnahme (2019)
[3] Instagram Business: Neu bei Instagram Shopping: Checkout (2019)
[4] SUMO Heavy: Shoppers Have Mixed Views on Social Commerce (2018)
[5] Ahalogy: Pinterest Media Consumption Study (2016)