Social commerce is a $1.2 trillion opportunity and the next global shopping revolution

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The Internet is experiencing a global social revolution. Almost all the 4.8 billion internet users worldwide are also on social networks, some 4.5 billion people. This means that 57% of all people in the world use social media.

This has made social media their gateway to the internet. In July 2021, social media platforms were used by 96% of global internet users, according to data compiled by GWI and reported by We Are Social and Hootsuite. Chat and messaging platforms came in second at 95%, followed by search engines at 84%.

And what is even more amazing is that the the typical social media user spends about two and a half hours a day on their favorite social media platforms, according to Statista.

Although brands understand the importance of social media as part of their marketing mix, they may not fully understand the implications of this online social revolution. They spent in total $537 billion worldwide last year on digital advertisingaccording to GroupM, but less than a third is dedicated to advertising on social networkssays Statista.

The problem with social media advertising is that it sends people from where they want to be (eg Facebook, Instagram) to another location (eg a brand website). It’s like when people drive on the freeway and are diverted to another route. They can easily get lost.

Similarly, if social media is users’ favorite highway on the internet, it makes no sense to force them off an exit ramp to get what they want.

That’s what social commerce solves. It allows users to stay where they want to be by allowing social media users to shop while interacting with friends, getting their news and watching videos in one place.

Social commerce is the next digital shopping revolution and it will change people’s shopping behavior as profoundly as internet shopping has done in the last twenty years. And like any revolution, it will bring unforeseen changes and leave collateral damage.

Social commerce is here now, but much more to come

Social commerce is defined as when the entire shopping journey, from product discovery to checkout process, is performed on a social media platform.

In 2021global social commerce sales hit $492 billionbut it is expected to nearly triple by 2025 to $1.2 trillion, according to new research from Accenture.

“The steady increase in time spent on social media reflects how essential these platforms are in our daily lives,” said Robin Murdoch, global head of software and platforms at Accenture. “They are reshaping the way people buy and sell, giving platforms and brands new opportunities for user experiences and revenue streams.”

In total, social commerce now represents 10% of e-commerce sales, but its share will reach 17% in just three years. And surprisingly, retail brands in developed markets, like the US, UK, and Europe, are lagging far behind developing markets in tapping into social commerce opportunities.

“Mobile-centric cultures like China, India, and Brazil, which haven’t had the history of shifting from brick-and-mortar retail to e-commerce, have made the leap to social commerce much more faster than in Western Europe and North America,” said Oliver Wright, global head of consumer goods and services at Accenture.

“The appeal to consumers around the world is overwhelming,” he continues. “Consumers basically want simplicity, and social commerce is a very natural and integrated part of the social media experience.”

Brands that made early forays into social commerce know its power. Sephora, for its part, launched Instagram Shopping early on, which allows customers to shop through the Instagram app. And he did a weekly series of Facebook Live shopping shows over the past summer.

“Everything indicates that it is [social commerce] it’s going to be great“said Carolyn Bojanowski, Sephora’s general manager of e-commerce, in an interview with Brilliant. “We know from our partners at Sephora China that this is such an important part of the customer experience. It’s one of those things that we know happens and we want to be a pioneer.

Three ways to engage socially

As social commerce evolves, Wright sees three main models of engagement in social commerce:

Content model

This engages potential customers with unique and original content. This is perhaps the easiest for brands to enable, as they already do much the same with their content posts. All they have to do is make it buyable on the platform or through in-app stores on Pinterest, YouTube, TikTok, Facebook, and Instagram to name a few.

“This enables brands, influencers and individuals to use social content to drive authentic discovery, engagement and action,” says Wright.

Nike, for example, has developed the NbG (Nothing by Gold) app which combines style, sports and personal care content and allows community members to shop directly within the app.

Experience model

“It’s perhaps the most interesting, because it adds the experiential dimension,” says Wright. It engages customers through experience-driven channels, such as live streaming, virtual and augmented reality like in games, to enhance the shopping experience.

For example, beauty influencer Michelle Phan, hosted a live broadcast on the Twitch platform to launch its new EM Cosmetics foundation during the “League of Legends” game. A bot was programmed to add links to buy and chat while an ad played during game breaks. The company reported that the new foundation sold nearly three times as much on Twitch compared to launches. precedents of new products.

Network model

“It’s peer-to-peer commerce, like group buying models,” says Wright. “It gives people more power, more control and more ability to do things themselves. It democratizes trade.

These network models include Pinduoduo in China, which reportedly has more active buyers than Alibaba, and e-commerce site Meesho in India, which supports social commerce via WhatsApp.

Express, the clothing brand, is tackling this, allowing not only professional influencers but also regular shoppers to create Express storefronts and become virtual “style editors” to earn rewards by attracting new customers and customers. sales.

power to the people

Wright thinks we’ve barely scratched the surface of what social commerce can become. “Any brand, big or small, and any individual can now become or create their own ‘brand’ and directly reach a market,” he says. “It gives consumers more control. It gives power back to the people. »

“This has hugely positive implications for small businesses and entrepreneurs, as they are able to reach potentially huge markets that were simply not accessible to them before,” he envisions. “Rather than a handful of large retailers and brands selling into mass markets of millions, we now see millions of individuals and small businesses selling to each other within a vast ecosystem of commerce. social.”

Citing Accenture research which found that 59% of social shoppers say they are more likely to buy from a small business through social commerce rather than online, Wright concludes:

“Social commerce is a force for democratization that is driven by the creativity, ingenuity and power of people. It empowers small brands and individuals and forces big brands to reevaluate their relevance. The implications affect all categories of consumers, all products and services, and will impact all platforms, brands and retailers. These players must put people at the heart of their strategies and embrace this rich ecosystem with new partnerships and business models.

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