26th March 2021

Social Commerce Vs eCommerce

When thinking about social commerce vs ecommerce and which strategy you should be using, the question isn’t really a “versus” one - it’s rarely, if ever, a choice of one or the other. If you are selling online, it’s likely that social commerce could play a part in increasing the sales, revenue and profit of your business and will form a part of your overall ecommerce strategy. However, success in this area depends on your businesses offering, target audience, budget and many other factors which we’ll explore later.

So what is social commerce, what role does it play in an ecommerce strategy, and should you be investing in it? Over these next two articles, we will dig into these details. First, let’s start with some context.

What Is Social Commerce?

Social Media Networking + eCommerce = Social Commerce

Social commerce can be simply defined as the promotion and selling of products and services using social media networking sites. Social media advertising campaigns can focus on obtaining impressions, clicks, engagement, increased reach (for branding efforts), or conversions in the form of leads or sales and more, where users are redirected to an online website store. The term ‘Social Commerce’ relates specifically to purchases made directly from a social media platform.

Social networking is about people connecting with people, with brands trying to insert themselves into that conversation. Social commerce is more about people connecting with both people and brands around a natural passion and interest they have for a category or product.

Social Commerce Vs eCommerce

Although the lines between the two are often blurred, there is a key difference between social commerce and ecommerce.

With social commerce, the whole sales experience or shopper journey happens solely within a social media platform - from product discovery to consideration, comparisons and purchasing.

The term ecommerce generally refers to a sales experience or shopper journey happening on a company's own (or occasionally third-party, e.g. Etsy) website or app.

The Rise of Social Commerce

First used in 2005 by Yahoo!, the term ‘social commerce’ referred to a set of collaborative shopping tools such as user ratings, shared pick lists, and other user-generated content-sharing advice and product information.

Social media networks grew rapidly throughout the 2000s and 2010s, alongside a general increase in ecommerce and consumer confidence when shopping on mobile devices. This has led to customers and merchants alike quickly recognising the benefits of buying and selling through social media networks.

Evolving from originally being considered merely a showcase tool for brands, social media platforms can now serve as virtual storefronts and extensions of a company’s main website, capable of managing the whole buying experience.

In a 2019 study by Facebook, 87% of people surveyed said that they took action after seeing product information on Instagram, such as following a brand or visiting their website. 54% of respondents made a purchase in the moment or after seeing a product or service on Instagram. 

Forbes suggests that young people shape consumer markets, determining what is trending and therefore what drives demand in consumer markets. The vast amount of time Generation Z and millennials are spending on social media is what has led social commerce to become such a key driving force in online commerce, with Gen Z spending two to three times more shopping on social channels than the average consumer. Short-form video content is beginning to dominate, with younger generations favouring platforms such as TikTok, Instagram and YouTube. However, platforms such as Facebook still remain a strong force in the world of social commerce.

The opportunities presented by social commerce are rarely going to be enough alone for business selling online. The growing digitally-savvy younger generation demands more options for where and when they can buy products. They often interact with multiple touchpoints across many different forms of digital media, platforms and devices.

Because of this, it’s now important for retailers to employ social commerce as part of an omnichannel commerce strategy, delivering seamless and consistent experiences across a variety of channels and interacting with consumers in a way that suits them.

Social Commerce Platforms

Every social media platform aims to keep visitors on their platforms for as long as possible. Increased time on-site or in-app maximises the opportunity for them to serve ads to you, which is their primary source of revenue generation. With millions of daily active users, social media platforms possess an unquestionable power to help merchants build their brand, engage with consumers and support aftersales.

Many social media platforms have already established themselves as credible channels for commerce. We explore the most well-known social commerce platforms below:

  • Facebook - A pioneer in the social media industry, it’s not surprising that Facebook was quick to realise the commercial opportunities at play by allowing merchants to advertise and sell directly through their platform. Providing a user experience that seamlessly integrates social, shopping and purchasing/payment is key to their continued success and why so many consumers and merchants alike flock to use the platform to buy and sell. A strong mobile experience means users don’t have to leave the app throughout the buying process of consideration, research, interaction and purchase. The app provides a platform where users can discuss and review products, get recommendations from connections they trust, purchase directly through the app and interact with brand customer service departments post-sale. Facebook, having removed any barriers between their platform and a final user purchase, is an ideal advertising and commerce opportunity and a no-brainer for B2C merchants.
  • Instagram - Being owned by Facebook, Instagram also facilitates shopping “in-app”, handling entire transactions within Instagram itself. Fully comprehending the experience of their users, Instagram understands how their engaged users often want to follow trends and replicate looks or ideas, emulating their favourite influencers. Enabling the purchasing of items on-demand, straight from visually rich imagery and video, allows businesses to sell with a lifestyle approach, rather than a traditionally presented “here is my product, please buy it” approach. Users want to see an aspirational product and be able to buy it instantly and Instagram does a great job in fulfilling this requirement.
  • Pinterest - Like Instagram, as a predominantly image-based platform, many of Pinterest’s users are in the research and consideration phase of their buyer journey, looking for inspiration, creating boards of their favourite home decor, wedding accessories, fashion favourites and more. With users aspiring to the latest trends and fashions and primed to buy once they have added pins to their boards, companies can capitalise on an audience who are ready to buy. The introduction of visual discovery tools such as Shop the Look ads, global Catalogs and dynamic business profiles, enables “businesses to reach people who want to go from dreaming to decision making, from inspiration to purchase”. Ikea is a prime example of a business appreciating the power of social commerce and how their audience uses social media. Ikea started transitioning its print catalogue to Pinterest, recognizing a need for something different to its online catalogue and stagnating print-based catalogue.
  • TikTok - A later entrant to the world of social commerce, Shopify partnered with TikTok in October 2020 to help their one million plus merchants drive sales through reaching TikTok’s younger and seemingly ever-expanding audience. Using the TikTok For Business Ads Manager, merchants can create content such as in-feed video based on their product offering. Satish Kanwar, Vice President of Product at Shopify commented:

    “The TikTok channel means Shopify merchants - even those without a strong TikTok following of their own yet - can connect with these new audiences using content that feels authentic and genuine to the TikTok experience”

What these platforms all have in common is they give consumers a choice to buy on a channel where they choose to spend their free time and pro-actively connect with brands by following their pages and interacting with their content and like-minded individuals. There are regularly new entrants to the social media market, with platforms quick to monetise their offering by offering ads and selling experiences. Merchants need to keep on top of emerging social commerce opportunities so they can take advantage by being early movers into the space, rather than followers.

In the next article, we will investigate the future of social commerce and reasons for businesses investing in social platforms to drive thier sales online.

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