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Social Commerce

Social Commerce

As former Yahoo! Vice President of Direct Marketing Seth Godin once said, “You can use social media to turn strangers into friends, friends into customers and customers into salespeople.” This profound insight is perhaps the most digestible definition of social commerce out there. To put it more simply, e-commerce plus social media equals social commerce. Since Yahoo! first introduced the term in 2005 to describe various online shopping tools, social commerce has come to refer to entire e-commerce ecosystems. Social media users can not only browse shops and make purchases without switching browser tabs. Today, smart retailers are also leveraging customers’ posts or other online activities to help heighten brand engagement and increase sales.

Merchants by now have noticed that even in an increasingly commercial online space, traditional advertising is not enough. They realized they have to be where their current and potential customers always are. In other words, they had to build a presence on social media.

More to the point, consumers’ social behavior seems to influence their buying behavior and vice versa. Social referral to retail e-commerce sites, for instance, has grown by 110% in two years, the inbound e-commerce traffic accounting for 9.1% in the first quarter of 2019. Also, 30% of online shoppers say they would be likely to make a purchase from a social media network like Facebook, Pinterest or Snapchat.

Innovation in social media platforms

Instagram launched its Checkout feature this year, which allows users to click on an item featured in a post, see its price, and purchase it without leaving the app. Furthermore, the customer receives notifications about shipment and delivery on Instagram, so they can keep track of their purchases. Brands such as Adidas, H&M, Burberry, NYX Cosmetics, Prada, Zara and many more are currently rolling out this feature. The service is available only in the U.S. for now, but will be more widely available soon. The Facebook app also hosts the entire purchase journey without redirecting customers to an e-commerce website.

Pinterest has focused on commerce capabilities this year as well, launching a new Complete the Look visual search tool. It leverages scene context to recommend visually compatible results in fashion and home decor. What’s more, Pinterest introduced a new “Shopping” category to its Pinterest Marketing Partner program while removing “Marketing” from the program name. This move may be a reaction to a GfK “Pat to Purchase” report released in November 2018, which revealed that 78% of Pinterest users who engaged with home decor Pins made a purchase based on content shared by brands on the platform.

Snapchat’s recent innovation with native checkouts powered by Shopify is especially impressive. This June, five celebrities—Kylie Jenner, Kim Kardashian West, Shay Mitchell, Spencer Pratt and Bhad Bhabie—received a small update to their profiles. A shop button was added that lets users buy items from the influencers’ respective brands (Kylie Cosmetics, KKW Beauty, Béis, Pratt Daddy Crystals and BHAD Goods). All the revenue goes to the influencers themselves, and no customer data is shared unless a transcation is completed.

Keeping up with the pack, WeChat messaging app launched a feature called “Good Product Circle”. It is an extension of WeChat’s “Shopping List” feature, allowing users to recommend e-commerce Mini Program stores, access friends’ recommendation lists, and socialize on the interface.

Thinking forward

A look at the success stories on Facebook

reveals that using social media as a channel for shopping is indeed a good opportunity for growing sales. Retail is the main vertical present on social media, but other verticals might want to consider social commerce as part of their multichannel strategy as well. Consumers look for a wide variety of items in retail, but they are also interested in gaming, travel and telecom offers. The commerce industry should take better advantage of what social media can provide in terms of exposure and selling opportunities.