Social media is helping brands sell their products through social commerce, which is also known as S-commerce. These features are, however, still being developed and perfected by social networks.
Will your business be ready when social commerce takes off?
What is social commerce?
The financial education website Investopedia defines social commerce as a type of electronic commerce that uses social media to promote online transactions. In short, it is a form of e-commerce that lets brands and business sell their products through social media.
Social commerce uses ratings and communities to help consumers discuss online shopping experiences and compare transactions. In this developing industry, social media platforms are experimenting with Buy Now buttons and even options that let customers buy directly on the social network.
Some ideas, like Twitter’s Buy button, have come and gone. Other social commerce opportunities are, however, receiving massive interest and investment.
In October 2016, Facebook launched Facebook Marketplace, a destination to buy and sell items on the platform. Pinterest is another big player in social commerce with its Buyable Pins. These advertisements let users buy while they are on the Pinterest app or website.
YouTube got into social commerce with Cards, which displays product information within videos. It also has TrueView for Shopping and Shopping Ads, which displays your product information on the videos of other creators who are discussing your products.
Instagram is one of the latest platforms to join the social commerce trend. It’s testing an icon that displays on photos that show products. When users tap the icon, tags appear on the products in the photo – offering prices, detailed views of the items and Shop Now links.
Types of social commerce
Buy Now and Shop Now buttons, which link to e-commerce websites, are considered as social commerce. Product reviews on social media also fall into this category.
In-channel purchasing is another form of social commerce. This option keeps users on the social media platform during the purchase, instead of taking them to an e-commerce website. In an article, the US multinational financial services corporation, Morgan & Stanley, explains that this extra step causes “friction” on the “path to purchase”. Removing this extra step makes it easier for consumers to complete transactions.
Some experts believe social commerce goes beyond social media platforms. Lauren Indvik, a former associate business editor at Mashable, defined the widely quoted seven species of social commerce in 2013. She suggested the concept stretches all the way from peer-to-peer sales platforms like eBay to group buying like Groupon.
Why your brand should sell on social media
Social commerce makes sense when you keep in mind that social networks are ideal platforms for creating brand awareness. Social media also enables word-of-mouth marketing.
In a recent study by SUMO Heavy, a digital commerce strategy firm, 50% of the 1 000 US consumers it asked said that social media influences their purchasing decisions. Of the consumers SUMO Heavy asked, 47% admitted to having made a purchase because they saw it on social media.
Added to that, another 54% said product news and reviews are likely to influence their decisions.
Social media networks also offer advanced targeting options to help marketers reach the right audience. Facebook’s Ads Manager has a Choose Your Audience option as well as a Custom Audiences function for targeting.
Since Facebook owns Instagram, Instagram advertisements are created using the social platform’s tools and include its audience targeting abilities. Pinterest lets marketers target users according to location, gender, language, device, interests, keywords or audiences.
It’s the right time to get into social commerce
Social commerce was predicted to take off in 2016, with 52% of marketers in a 2015 study by the digital marketing agency Greenlight saying social commerce will be the most rapidly growing trend in the new year.
The practice showed good growth in the last few years. A BI Intelligence report showed social media increased its share of e-commerce referrals nearly 200% between the first quarters of 2014 and 2015.
Although its use is growing, it holds a small percentage of the total e-commerce market. Not all e-commerce features on social media have been successful so far either. Twitter, for instance, reportedly shifted the members of its team working on its Buy button to other divisions within the company in May 2016.
Despite these failed experiments, the growing popularity of social media, e-commerce and mobile use makes social commerce an area for potential growth. Businesses that start using, testing and experimenting with social commerce during this development stage will be first to market when this industry takes off.
Are you ready to launch your offering on social media? Here’s our advice: 7 steps to setting up a better digital marketing campaign