Why Your Business Should Embrace Social Commerce
Photo by Matt Ridley at Unsplash.
Your customers will want – and expect – to shop directly on social media platforms like Instagram in 2021. Here’s how to make social commerce a friction-free and profitable experience.
Online shopping is evolving. The record numbers of consumers that are now shopping online want that experience to be as frictionless as possible.
For retailers, this means adapting. Creating seamless, convenient buying experiences that integrate as naturally as possible into a customer’s everyday activities will set successful brands apart from those that do not.
Beyond integrated payment solutions like digital wallets, the next step to achieving this is for e-commerce to get social.
Social commerce shortens the buying journey
According to a Deloitte report, 29% of social media users are more likely to make a purchase on the same day of using social media. The same report also states that consumers who are influenced by social media are four times more likely to spend more on purchases.
Social commerce means a customer’s buying journey is completed in as few clicks as possible. Once they see a product that they want, they can buy it without navigating away from the platform they saw it on. This type of friction-free CX and integration removes any of the roadblocks that might stop a customer from completing a purchase.
This definition from Big Commerce sums it up:
“Social commerce sells products directly through social media networks. It differs from social media marketing as you’re not redirecting users to an online store, but offering them the ability to checkout directly within the network they’re using at that moment.”
It’s something that’s driving an increasing portion of marketing-driven revenue, according to The State of Social Media Investment Report. About eight in 10 respondents expect to be selling their products or services via social media within the next three years.
Supporting that is research that forecasts the global social commerce market to reach US$1948.5 billion by 2026, rising at a market growth of 29.4% CAGR.
The big players in the world of social media are one step ahead. Facebook, Instagram and Pinterest revamped their social commerce tools in 2020. Retailers can now streamline online shopping experiences through digital storefronts that can be found organically or boosted through paid advertising.
Youtube and TikTok both have ‘shop now’ functionality in the works, while Twitter is experimenting with a new card format that features a prominent ‘Shop’ button.
So how can you take advantage of this new revenue opportunity? Here’s how to maximise social commerce potential on the two biggest platforms. Plus, some key points to consider for further growth…
Facebook Shop
Facebook Shops – another reason for your customers to ‘Like’ you.
Facebook has offered some e-commerce opportunities (like Marketplace) on its site for years. Its launch of Shops in 2020 marked a significant step into establishing it as a social commerce leader.
Essentially, Shops is a way for companies to sell their products on Facebook. Facebook Shops has a range of tools that brands can use for promotion, sales, marketing, conversion, customer support, and more. Excitingly for SMEs in particular, the platform lets you set up a full online shopping experience for free.
The digital shopfronts increase the visibility of SMEs in particular, driving traffic back to them from Facebook ads, sponsored posts, or other content shared on social media.
The premise? If a consumer sees something they like in your Facebook Shop, converting that interest to a sale is easier as it happens in fewer clicks than if they then had to find or click through to your website.
Facebook has made the strategic decision to continue partnering and expanding its relationships with third-party eCommerce tools. Think: Shopify, BigCommerce, WooCommerce, and many more. This is great news as it means you can still build and maintain your own site and shopping cart, but also take advantage of Facebook’s integrated social commerce opportunities.
Instagram Shop
Instagram is now shopable.
Once your brand has a Facebook Shop, the next step is Instagram – although not the other way around as Instagram Shops will pull data from your Facebook catalogue.
Don’t be mistaken in thinking a Facebook Shop alone is enough to guarantee social commerce success. More than 500 million Instagram users use the platform daily and 50% of them follow at least one business.
And this activity is more engaging than just a passive follow. According to Instagram, 60% of people discover new products on their platform. Better yet, users report that liking something they saw meant that they’d take steps to find and buy it straight away.
An Instagram Shop lets brands integrate their product catalogues with their Instagram profile. As a result, products can be promoted directly to users through posts, Stories, in the Explore tab and in a dedicated Shop on a brand’s profile.
The offering is constantly evolving. A checkout button has been launched and Shopping tags allow you to highlight products from your catalogue within both Instagram Stories and in the newsfeed. This means consumers can instantly see more information about a product and how to buy it.
Consider Chatbots
Experts agree that one of the most exciting and potentially profitable elements of social commerce is chatbot functionality.
E-commerce chatbots aren’t new, but their more recent integration into social commerce is proving seriously successful.
Take Lego’s chatbot Ralph, which ‘chats’ to customers via Facebook Messenger. Ralph started life as a way to help holiday shoppers with gift buying but soon evolved to a key cog in the brand’s social commerce strategy.
Lego’s Ralph chatbot now drives over 25% of the social media sales. He also has a conversion rate that was 8.4 times higher than other Facebook Ads and helped LEGO reduce their cost per conversion by 31% (vs. other conversion-based ads).
A chatbot on your brand’s Facebook and Instagram Shop personalises the shopping experience for customers. It also helps smooth any potential bumps in the road to a sale. The speed with which a Chatbot can respond to customer queries is a win even before the cost savings it can deliver.
By automating your Instagram DMs and Facebook messages, you can engage customers at their highest intent moment, with helpful and personalised experiences that drive sales.
Looking to China for the next step in social commerce…
Photo by Austin Chan at Unsplash.
Like many major e-commerce trends – and many trends in general – China is where it all began. Over there, social commerce has been a ‘thing’ for years. The majority of e-commerce transactions now take place via the country’s equivalents of Facebook and Instagram.
China’s social commerce market has further evolved to include ‘live commerce,’ a market now worth around US$60 billion a year.
Live-stream shopping has exploded in popularity in China. One influencer – Viya – sold more than US$4.5 billion through her Taobao live-stream channel last year.
To put that into context, reports suggest that this is roughly the equivalent of what supermarket chain Carrefour sold across all its stores in China in the same period.
Savvy businesses will know that the Chinese market is an accurate predictor for what retail trends will hit the US, UK and European market in the coming years and so will also keep live streaming at the forefront of their minds.
It’s clear that retailers must keep up with consumer demand for social commerce or risk being left behind. Part of that is integrating digital payment solutions. PyxPro can help.