The pandemic served as a social commerce catalyst for brand marketers.
eMarketer revised its forecast for social commerce growth from 19.8% to nearly double at 37.9% in 2020 because of this massive uplift.
Companies use social media to maximize revenue to find potential customers, connect with them, and nurture their relationships. However, the last couple of years felt different. A year after the pandemic outbreak, social media apps or sites recorded an increase of 5% in users, bringing the total number of active users to 3.78 billion.
The majority of these users access their favourite platforms via mobile devices. As a result of its ability to seamlessly combine sharing and selling, social media platform Instagram grew to become a global leader in social commerce.
From July to September 2020, Instagram outgrew its parent company Facebook, according to Hootsuite’s latest Social Trends 2021 Report. In the most recent quarter, “Instagram’s advertising reach grew by 7.1% — more than three times Facebook’s at 2.2%,” says the report.
Instagram reports that 70% of consumers use the platform to find new products, and 90% of those users follow at least one business. In other words, brands gain tremendously by selling on visually focused social media platforms.
This article discusses social commerce and its accelerating use of online platforms.
A global social revolution is taking place on the internet at a breakneck pace. Social media is used by nearly all of the world’s 4.8 billion internet users (or 4.5 billion people). This translates to 57% of the global population using some form of social media.
Social media became their primary gateway to the internet. According to data compiled by GWI, social media platforms were used by 96% of global internet users as of July 2021, with search engines at 84%.
Astonishingly, according to Statista, the average person spends two and a half hours daily on their preferred social media platforms.
Even though many brands recognize the importance of social media in their marketing strategy, they may not fully grasp the implications of this online social revolution. According to GroupM, these brands spent $537 billion globally on digital advertising in 2020, but less than a third of that money was spent on social media advertising.
The term “social commerce” refers to the practice of buying and selling goods and services on social media platforms. Customers complete the entire purchase process without leaving their preferred apps under this model.
Facebook, Instagram, and Pinterest launched revamped social commerce tools in 2020 to assist retailers in streamlining online shopping experiences during the pandemic. These features created new digital storefronts that can be discovered organically or promoted via paid advertising.
Social media advertising diverts users away from the platforms they prefer (such as Facebook and Instagram; i.e., a brand website). In essence, they may get lost or take a different route on their way to the website.
Social commerce remains the solution to this problem. While users stay on their social media apps, they can shop, catch up on the latest news, and watch videos all in one spot. This keeps people where they want to be.
In 2022, social commerce sales in the United States are predicted to reach $45.7 billion, with more than half of the nation’s adults purchasing through social media.
A significant advantage of using Facebook is that it’s a well-known, widely used social network. When it comes to social commerce, it’s likely that your company already has an active presence on Facebook.
Using Facebook’s Shops for social commerce enables you to build a unique customer experience aligning with your company’s brand guidelines. A pre-existing catalogue of products from your website can be imported and customized via fonts, colors, and graphics.
It’s possible to engage with clients on other Facebook platforms, such as WhatsApp, Messenger, or Instagram to answer inquiries or provide assistance.
If your products have the potential to stand out visually in users’ newsfeeds, it’s generally a good idea to establish an Instagram presence. For example, vendors often use shopping tags on “Instagram Stories” and the newsfeed to highlight certain products. This method provides easy-to-access information about the products and how to purchase them.
TikTok joined Instagram and Facebook in allowing influencers and creators to sell things directly from the app, becoming the latest to implement social commerce.
TikTok’s in-feed features were modelled after social media heavyweights like Instagram and YouTube, making the platform a popular visual medium.
It makes it easy for brands to engage and build communities around their products using visual and dynamic elements.
Brand-related materials such as product reviews, product hauls, and lessons was already abundant on TikTok. While product purchasing tags may appear salesy in mainstream media, engaged TikTok users welcome and value them.
61% of TikTok users say they buy from brands they see featured in their feed. So any marketing measures relevant to supporting this feature will be readily embraced.
Virtual Reality (VR) and the Metaverse
Virtual reality is predicted to explode in popularity throughout 2022, as consumers will swiftly catch on to the concept.
With the growing demand for virtual reality shopping experiences, now stands as the best time to pioneer in this field.
Users shop from the comfort of their own homes while sitting on their couches and wearing their headsets. For virtual reality to take off en masse, two things must happen.
The first step: create virtual reality content. If Tik Tok’s explosive rise is any indication, ‘non-professional’ producers appear eager to experiment with new ways of connecting with their followers and will soon figure out how to use VR technology to their advantage.
Second: customer acceptance must surpass a critical mass. VR is being introduced to a significant number of people through gaming. Next up in this chain lie education and everyday life. Eventually, consumers will expect VR to be an integral part of their shopping experience.
In a recent statement, Meta CEO Mark Zuckerberg said that the metaverse is a virtual construct destined to supplant the internet. Although this sounds futuristic, the metaverse is already a part of our everyday life.
Do you know how many Zoom family reunions have already occurred? It was common to see graduations in Minecraft and weddings in Animal Crossing during the pandemic. A virtual fitting room is now available for a user, and as we’ve already established, VR will only grow in popularity.
The metaverse (also known as the spatial internet) is not such a massive step when you put it into the context of recent trends. Other developments mentioned in this article will eventually lead to their metaverse counterparts. While we won’t get there in 2022, it’s worth noting where we will ultimately land.
As a consumer, how does the metaverse manifest itself? Imagine strolling through a park in your neighbourhood. You see a jogger sporting some top-notch running shoes. Virtual shoe vending machines suddenly appear next to you, each containing a variety of the same shoe in your size.
Imagine then clicking on a review written by an influencer whose opinion you trust. You select a shoe, make your payment, and the shoes are delivered to your door the following day. Yet you continue your stroll across the park almost as if nothing had happened.
Metaverse represents the vortex where virtual and augmented reality meet, where data from every second of the day merge to create a second layer of information on top of the real world we live in.
Facebook’s virtual reality social media platform Horizon is currently in beta testing. Another example: Microsoft is one of several technology firms making significant investments into platforms built on the spatial internet.
Any omnichannel strategy now includes social commerce. The chance to market through customers’ digital comfort zones is unequalled, as consumer preferences constantly change.
We’ve gone from a “going shopping” mentality to an “always shopping” one, where we’re constantly looking for new things to buy. Shopping increasingly integrated itself into our daily lives as mobile experiences grew more seamless.
Many people turn to social apps for personalized forms of inspiration and curated recommendations. Truly, we have seemingly limitless options at our fingertips, wherever we go. When you find something you didn’t know you were looking for, you feel like you’ve found a treasure. This is what most people love about it. Do you remember when the first Apple iPhone was introduced?
Businesses no longer retain the luxury of waiting for customers to find them and buy. In order to survive in the new, meta world, they must be proactive and reach out.
The new shopfront is social commerce. As individuals spend time keeping up with friends and family, consuming relevant content, and discovering new brands, products, or services they love, this presents an opportunity for seamless, app-based experiences.
Shops on Facebook and Instagram stand at the frontline of this transition, offering businesses customizable collections and simple design tools promoting featured products, bringing brands to life, and facilitating customer buying. It’s a joyous experience for customers to integrate online and in-store shopping features including discovery and browsing, live shopping, augmented reality try-ons, and in-app checkout.
For 2022 and beyond, brands embracing social commerce will earn advantages over their competitors.
Disclaimer: The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group, www.deltecbank.com.
The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group, www.deltecbank.com
The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.
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