When it comes to constructing an effective omnichannel experience, social commerce might just be the missing link you need. In fact, around one in four people are projected to make a purchase directly via social media globally in 2024. To this effect, social commerce presents a unique opportunity for businesses to reach new markets and maximise their eCommerce revenue.
In this article, we explore what social commerce is, how it compares to eCommerce and how it can benefit businesses, among other things.
What is social commerce?
Social commerce is the process of embedding your entire shopping experience into a social media platform, and it’s gaining traction as a preferred payment option for consumers. Social commerce allows customers to discover and purchase products without leaving their social media app, providing a more convenient and frictionless checkout experience.
What’s the difference between social commerce and eCommerce?
Social commerce and eCommerce are two distinct yet closely linked concepts that involve conducting transactions and business via digital means. Social commerce encompasses shopping and payments on social media platforms like Instagram and Facebook, and is essentially a subset of eCommerce. On the other hand, eCommerce describes sales made over the internet and, more broadly, it includes a wide range of online transactions like business to consumer (B2C), business to business (B2B) and consumer to consumer (C2C).
Benefits of social commerce
It’s critical that businesses understand the benefits of social commerce and give their customers their preferred payment options. Here’s a quick rundown of the benefits that social commerce can bring to your business:
Improved checkout experience
Social commerce allows customers to browse and purchase products without leaving their preferred social media app, elevating the checkout experience. Alongside this, it provides access to unique features like shoppable posts, in-app checkout and product tagging to simplify the buying process, reducing payment friction and leading to higher conversion rates.
Build credibility and brand loyalty
Social commerce provides an interactive way for merchants to sell products, providing opportunities to leverage user-generated content and reply to consumers in real-time. This can help businesses to build credibility in the minds of customers, leading to increased brand loyalty and reduced cart abandonment rates.
Increased reach
Social commerce is increasing at pace and was estimated to surpass US$570 billion during 2023, with young consumers the most avid adopters. Furthermore, merchants can leverage social commerce to increase their reach and visibility, attracting new customers who might not have otherwise discovered their products.
Vital insights into shopping behaviours and preferences
Social commerce traffic can give merchants insights into individual preferences and shopping patterns online, using the data analytics functionalities of social media platforms. Users’ geo-locations, interests, items viewed or added to cart, social media activity can all be tracked and used to provide more tailored shopping experiences for customers.
What are the best platforms for social commerce?
Navigating the vast landscape of social commerce is essential for merchants aiming to thrive in the digital marketplace, but it’s paramount for businesses to identify the best social media channels to promote and sell products. Let’s delve into some of the top-ranking platforms.
Facebook shop
In today's digital era, social media platforms provide various avenues for users to purchase their favourite products and services. However, Facebook stands out as the preferred choice among consumers worldwide. According to Statista, 23% of global consumers rated Facebook as the social media platform that delivers the best experience for social commerce.
Alongside offering a plethora of purchasing tools for merchants to tailor to their businesses such as 'Commerce Manager', Facebook was the pioneer in investing in social commerce, dating back to 2009. This early commitment has paved the way for robust features that enable businesses to seamlessly sell products and services to Facebook users.
Instagram shopping
Instagram is also a frontrunner in the realm of social commerce, capturing the attention of 18% of consumers globally as the platform that delivers the best social commerce experiences. Instagram Shopping has gained significant traction, especially among millennial users, who hold the app dear. It offers merchants interactive tools to enhance their shopping experience.
For instance, businesses can showcase their products in a more engaging manner by posting photos featuring individuals using their brand's products, complete with tags placed strategically within the image. This intuitive feature allows customers to seamlessly purchase products directly through the platform with a simple swipe or click.
TikTok shop
TikTok has witnessed an unprecedented surge in popularity since its inception in 2016, particularly among the Gen Z demographic. To underscore this phenomenon, a staggering 49% of Gen Z shoppers utilised TikTok to make diverse product purchases in 2023. Furthermore, TikTok stands out as the go-to platform for impulse buying, with over half of its weekly users in the US stating they indulged in spontaneous purchases via TikTok in 2023.
The platform is committed to bolstering social commerce, evident through its substantial investments in this arena. In addition to providing various sales tips during live videos, TikTok has introduced TikTok Academy, a feature designed to educate merchants on optimising their product offerings and sales strategies. According to recent research conducted by TikTok, these initiatives have yielded remarkable outcomes, with a substantial 62% of weekly users engaging in eCommerce activities on the platform.
How to build an effective social commerce strategy?
Pinpoint the right channels for your target audiences
The first step is identifying who your target market is and what channels they’re using. Worldwide audiences aged 25-34 tend to favour Facebook, while those aged 18-24 typically prefer to use TikTok and Instagram, according to recent data from Statista. Pinterest has also been shown to be especially popular among women aged 25-34 years globally. To this effect, merchants will need to setup social commerce for platforms that align with their desired markets in order to optimise their reach and social commerce efforts.
Leverage user-generated content and influencer marketing
Nothing encourages someone to make a purchase better than positive reviews through resharing and tagging. This acts as “social proof”, showcasing how your products are used in real-life by other consumers. Interestingly, 40% of global consumers stated that user-generated content highly influenced their purchasing decisions in 2023. By showcasing what products look like in real-life, merchants can leverage user-generated content to build trust among consumers.
Offer different payment methods
There's no point in offering a payment method that's not popular in the market you're striving to access. This necessitates studying your target audience and offering the local payment method preferred in the territory your customers are situated in. For instance, whereas German consumers prefer PayPal, the Nordics choose to pay with Trustly and Brazilians opt for paying with Pix. Your payment service provider should be able to advise on local payment methods and adoption rates across territories, so make sure to consult with them first for optimal results.
Listen and respond to your customers
A unique aspect of social commerce is the ability to respond to consumers directly in real-time, allowing you to build relationships and communities with users. It’s important to monitor and respond to enquiries in a timely manner to reduce cart abandonment rates. This can be streamlined by introducing a chatbot to respond automatically to messages based on keywords used for enquiries, with the option to speak to someone directly if queries aren’t adequately resolved.
emerchantpay is here for the future of social commerce
Social commerce has reshaped the way we shop and engage in business. Its convenient nature, personalised experiences and endless possibilities have made it an integral part of everyone’s daily lives, providing new opportunities for businesses to expand their reach and revenue.
emerchantpay is a leading global payments service provider for online, mobile and point of sale payments. Our team of payments experts can help you integrate many popular digital wallets, such as PayPal and Apple Pay among other payment solutions, for more frictionless and secure transactions throughout the customer journey.
Curious to know how you can boost your online sales and boost your mobile conversions? Contact our payment experts today and find out how.