What is Social Commerce?
Social commerce is shopping-oriented social media marketing that touches buyers before, during and after their purchase. Or as Marketing Consultant, Heidi Cohen simply puts it, “shopping meets social media”.
It encompasses a broad array of options including group buying, social shopping, mobile apps, retailers adding social features, and shopping integrated into social media.
Social Commerce Today
Once viewed as ‘the sales guy at a cocktail party’, with time consumers warmed up to the concept of social commerce.
In the past year, social commerce grew in leaps and bound, earning bigger chunks of referral traffic, a higher sales number and new leads. Ecommerce referrals from social media sites increased by approximately, an astonishing 200% from 2014-2015.
This bought the world to a realization, that social media had taken a turn. Now social media is playing the biggest role in getting retail traffic, than any other medium.
Another key point is that, mobile sites are becoming incredibly popular. According to statistics, users are 35% more likely to share a brand’s post on mobile, than over social media.
With astounding facts and figures such as these, social media networks are heartily embracing social commerce and rolling out the Buy buttons.
This infographic by Mobstac analyzes the rise of social media in ecommerce:
Facebook has been cashing in on retailers battling to be in our feeds with sponsored ads and promoted posts since a long time. In June, it added the Buy button to those posts, allowing users to make a purchase on site.
Now, Facebook is testing a ‘shopping feed’ that will allow users to browse and purchase without leaving the social network.
Among social sites, Facebook is the largest ecommerce traffic driver. 50% of social referrals and 64% of total social revenue comes from Facebook, making it the most significant social website for ecommerce.
Even if the sales with Facebook might not result to those of email marketing, the figures are too huge to be ignored by retailers and reflect social media’s snowballing importance for online retailers.
Despite having a comparatively narrower user base, Pinterest brings in around 16% social revenue. The new Buyable Pins, announced in June, are likely to send those numbers skyrocketing, making Pinterest a stronger revenue and referral engine for brands.
While Instagram doesn’t boast of driving significant sales activity for retailers, it is the ideal platform for branding. A lot of high-end companies use it as a branding platform.
However, with Instagram’s new Ads, that allow the users to ‘Shop Now’ and ‘Learn More’, this is another platform that may plummet to become a direct-response driver. We will just have to wait and watch.
In the social media race, twitter seems to be last. The twitter “Buy” button remains in testing. It is losing influence for retailers but it does have an advantage with the sporting and events marketers, especially for location-based promotions. Brands like NFL & NBA sold game tickets and brand merchandise on twitter.
Recently, Yahoo announced its decision to buy Polyvore, which advertises itself as “the world’s largest style community.”
Polyvore is a social commerce site, with user-generated content, similar to Pinterest but involving a lot more specific market (home décor & fashion), and more transactions.
It may house a smaller user base, but according to site – an average shopping basket of Polyvore users comes in at about $200. And they are there to browse and shop. Unlike users on social networks.
It also allows brands to push sales with promoting their products in a pay-per-click model.
Polyvore can also be utilized beyond the sales boost. Retailers can connect much easily with the users, find ready-made brand advocates in their top followers, and test new trends on the site for different target markets.
The Future of Social Commerce
Even though niche social networks are happily gobbling up the rewards for selling online through their platforms, all the major social networks are monitoring consumer appetite for social commerce.
Online retailers are also on the quest for new marketing methods that allow peer to peer and group-based interactions, knowing that recommendations from friends and popularity of products by others can cause greater conversions.
The “Like,” “Pin It” & “Share” buttons are popping up everywhere, urging customers to show off their purchases on social media.
While social commerce may never be as successful as a dedicated ecommerce site, it is still an innovative and public way of selling online.
What does it mean for social commerce in the future? Only time will tell.
Our bet is on growth within social commerce. What’s yours?