The advent and growth of Social Commerce
Before talking about social commerce in-depth and how it is slowly becoming more popular than e-commerce by revolutionizing the buying and selling process, I would like to highlight a few statistics:
· Around 48% of the global population, ie 3.78 billion people use social media as of 2021
· On an average, people spend around 2–3 hours daily on various social media platforms
· 54% of the social media browsers state that they have discovered new products on social media platforms, wherein 49% of the users depend on influencers for product recommendations on social media
· Post COVID outbreak, 52% of socially engaged shoppers and 35% of non-socially-engaged consumers have purchased through a social platform
The above data indicates the rapid adoption of social media- which got accelerated manifolds during the pandemic- not only for networking with like-minded people but also for discovering and buying items. Defined as the “Process of promoting and selling products via social media platforms”, Social Commerce has found new-found glory amongst entrepreneurs, SMEs as well as large, well-established companies. Social Commerce provides customers a Complete Product Experience (also known as CPE), providing assistance right from the product discovery and research stage, to the checkout process, and finally post-sales support. The fact that customers can undertake and complete different activities throughout their journey with the company on the very same platform where they spend most of their leisure hours is one of the biggest advantages of this form of online shopping. In this article, I will be exploring the world of social commerce and how it is slowly revolutionizing the face of retail. By implementing the simple ideology of “Look, Click and Order”, social commerce has streamlined the entire customer journey with various brands.
Why did Social Commerce become so popular:
Millennials and Gen-Z have been shaping consumer markets for quite some time now. Their purchase behaviour predominantly establishes new trends in the market, and whichever brands or companies fail to adapt to these trends fall behind and consequently lose revenue. Given the vast amount of time that the younger population (and now even the older generations comprising of baby boomers) spends on social media platforms, brands have accurately identified an opportunity to establish their presence here. Instead of making potential customers put in all that effort to come to their websites or visit some e-commerce platform, deliberately search for their products and then place orders, companies have decided to instead take their products to their prospects at a place where they are the most active. A recent survey has revealed that Gen-Z is spending almost 4.5 hours a day on social media, while Millennials have an estimated average of around 3.8 hours. This gives companies enough time to showcase and promote their offerings in new and creative ways, engage with customers on a more personal level and understand their needs, build trust by maintaining transparency throughout the entire buying process, make adequate sales and ultimately nurture this newly-formed relationship by providing post-sales support. Personalization and the ability to have one-one interactions with brands are a few of the most important factors that young consumers look for before making a purchase, and social commerce is increasingly allowing brands to achieve just that, with the minimum amount of hassle.
What are the benefits that Social Commerce provides:
Ever since the introduction of social commerce, both the buying as well as selling processes have become smooth. Not only has it become easier for shoppers to buy products in a matter of few seconds, but social commerce has also established a level playing field for small and medium enterprises (SMEs) as well as for standalone entrepreneurs, who are now in a better position to survive (if not compete) in a market that has been monopolized by the likes of Flipkart and Amazon. Let us look at a few ways by which social commerce has achieved this:
1. Establishing long-term relationships with customers is one of the main objectives of social commerce. While e-commerce is more transactional in nature, social commerce is relationship-oriented. The 2-way communication and interactive nature of the entire purchase process, wherein prospects can directly reach out to the brands even before placing an order, is what builds trust with potential customers, which in turn gets converted to loyalty down the line.
2. The non-disruptive nature of social commerce is a big advantage. People do not have to leave the social media platform (where they usually relax after a long day) and go to another website, search for products, apply filters, scroll through the plethora of available options (which is a daunting task by itself), add to cart, add payment options and finally checkout. They can do all this and more by staying on the same platform, just by clicking on the sponsored ad. Cart abandonment rate reduces rapidly if the number of steps in the entire purchase process is minimized and simplified.
3. Highly personalized and well-organized content is another strength of social commerce, which allows brands to enjoy a greater degree of customer engagement. As mentioned above, users who wish to buy a product on social media can easily reach out to the brand via a simple DM and customize the purchase as per his or her needs. The brand stores this customer-specific purchase behaviour in its database, and uses it to create targeted offerings and promotional content in the future, therefore tempting the same customer to make a repeat purchase. Additionally, by leveraging the innovative tools (like gifs, memes, videos and now reels) that are available on social media platforms, companies are able to weave a story around their offerings, which helps create a deeper brand image, and subsequently a stronger connection with their TG. Different display templates like, for example, the carousel enables the products to be showcased in a very organized and neat manner, thereby preventing users from getting overwhelmed by too many choices.
4. The rate and scale of reach that brands achieve by promoting their products via social media platforms are unparallel. Companies always have the option of going for targeted, sponsored ads. However, what creates a major differentiation is the amount of user-generated content that gets created, which in turn brings in organic traffic. Say, for example, you come across a brand’s product on Instagram, buy and use the product, and after having liked it you decide to put up a product appreciation post on your Instagram story. Once you share it, your followers will be able to see the product and if interested, they will reach out to you to gather more information. This kind of social proof- the ones that are generated by close friends or family- is the best kind of evidence that a brand can gather about its products’ honest performance. Sure, even e-commerce platforms have ratings and reviews sections. However, scrolling through thousands of such comments, that too a mix of good and bad reviews, is an arduous task. There is also the possibility that the reviews might be fake.
5. Another good thing about social commerce is the kind of closely-knit online community that it creates. After having liked a product, not only can a user immediately share it with her friends (who are also right there on the same platform) and consult on purchases, but she can also engage with other like-minded shoppers who would be commenting on that particular product’s page. Millennials and Gen-Z always seek instant gratifications, and by selling on social media platforms brands can provide just this.
6. Last but not least, companies have become increasingly dependent on fashion influencers and content creators for advocating their brands’ products, since most of the current generation of consumers follow them religiously. Small and big influencers have been diligently ideating innovative ways to advertise products for quite some time now, by leveraging the various tools and services that are at their disposal courtesy of the online platforms. One such service is live commerce, which allows influencers to demonstrate product features in real-time, while simultaneously answering questions from customers who are logged in and are watching the stream. The beauty of live commerce is that it allows brands to have a high degree of engagement with the customers in real-time, by identifying their doubts and unique, often inarticulate pain-points, and accordingly shaping their shopping process.
I purchase products via social media platforms quite frequently. As a consumer, I have always been impressed by how easy the entire buying process has become, thanks to social commerce. However, I have now realized that just as it helps buyers in discovering and purchasing new items, social commerce is equally beneficial for sellers as well. Recently I, along with three of my friends, have started a small online flower shop, and we have been extensively using platforms like Facebook, Instagram and Whatsapp to promote and sell our offerings. The CTA button on our Facebook page directly routes interested users to our Whatsapp business profile, wherein they can interact with us, learn about the offerings, prices and thereafter place their orders. All it took for us to set up our digital marketplace were a few clicks and a little bit of creativity. We are not only amazed at the reach and visibility that we have achieved over the last couple of days (Which is way better than the results that we were getting from traditional methods of awareness creation), but also the easy-to-understand, step-by-step process through which we were guided while setting up our online shop has fascinated us. Given the fact that we started this business in a tier 3 city in Odisha, there were a lot of entry barriers at the beginning, which social media has successfully helped us get rid of. Truly, social commerce has become a necessity towards being an “Atmanirbhar Bharat”.
