Today’s brands face an everchanging ecommerce ecosystem. With new channels emerging all the time and existing ones growing and adding new features, it’s more important than ever for businesses to invest in agility. However, in the words of our CMO, Marcel Hollerbach, “Don’t be agile for the sake of being agile.” The real reason to make it your focus is the fact that your competition is already doing so. And it’s why they’re already succeeding in social commerce, a market expected to reach $3,369.8 billion by 2028.
Hear what Marcel said about social commerce in his interview with Ben Rund from Data Talks in 2020.
In this article, we’re going to take a closer look at social commerce and how being agile can help you succeed.
Why are social media channels and online retailers perfect partners?
It may seem obvious that consumer media consumption has changed drastically throughout the last decades. For instance, there has been an obvious decline in linear television consumption. Nowadays, consumers (led by Gen Z and Millenials) use online streaming services and social sites like YouTube, TikTok, and Instagram to watch live and on-demand content. As a result, advertisers have followed. Social media channels have thus become some of the highest-grossing advertising platforms available.
TikTok recently found that 50% of its users found new products through ads on the app. But social media isn't just about advertising, it's where users go to find influencer content, organic posts, and livestreams. According to Instagram, 70% of shopping enthusiasts turn to Instagram for product discovery and 87% of people say that influencers have inspired them to make a purchase.
And thanks to a year-on-year increase in social media usage of 16.4% in 2020, 2021 might just be year of social commerce.
But what exactly is social commerce?
Social commerce refers to the process of selling items directly on social media, with consumers discovering, researching, and buying products without ever leaving a social network. This is already possible on Instagram and Facebook with Checkout, which is currently available only in the US.
Here’s a look at Checkout on Instagram:
US brands with access to Instagram Checkout can also broadcast an Instagram Live Shopping experience, and sell products during their broadcasts.
In July 2020, Snapchat announced a closed beta launch of its own Shopify-powered native shop experience, Brand Profiles, while TikTok's Shopify partnership in October 2020 is set to drive in-app shopping features in the future.
Features that are not strictly speaking social commerce, because they direct customers to an ecommerce website to complete their purchase, include:
- Dynamic product ads on Facebook, Instagram, YouTube, Pinterest, and Snapchat
- Facebook Shops and Instagram Shops in non-US countries
- Shoppable media, such as Pinterest's Product Pins and product tags in Instagram Reels
How agility benefits brands and retailers in social commerce
While agility carries benefits for any business these days, it’s especially valuable for brands and retailers embracing social commerce channels. Here are just a few of the many ways in which agility can be used to get ahead in social commerce.
Compete with microbrands: As the popularity of channels like TikTok, Snapchat, and Instagram rise, so does the success of microbrands that have been there from day one. These digitally native brands are now your direct competitors. In order to compete, your business needs to be able to move as quickly as theirs. Therefore, as our CMO Marcel Hollerbach puts it, “Being agile is not just the technical requirement but it’s really a business requirement.”
Be a first mover: There is no doubt an advantage to being among the first to reach a specific channel. Not only does this give you more time to test and get to know the channel best practices, but it allows you to do so with lower competition and click prices. Essentially, getting there first can get you more customers for less money.
Capture new opportunities & prepare for the next big channels: If we think about where Instagram was ten years ago compared to today, it’s a big jump. Who knew that Instagram would become one of the most lucrative channels for product ads? If you have the ability to transform and deliver product data quickly, you’ll be better prepared for any new channels that appear in the future.
What could the future look like?
Where is social commerce heading and what can we expect to see in the future? Here are some predictions and insights from our CMO.
The disappearing third-party cookie
At the very heart of tracking online consumer behavior lies third-party cookies. However, as data privacy concerns continue to rise, their prominence is quickly diminishing. Many browsers, including Apple's Safari, have already stopped supporting them, and Google is slowly phasing out the use of third-party cookies on its Chrome browser by 2022.
So when cookies really are gone, what are big players like Google and Facebook likely to do to ensure they don’t lose customer information? Well, they’re more inclined to keep users from ever leaving their platforms in the first place. One way of doing this is by implementing on-site or in-app checkout rather than directing shoppers to third-party ecommerce websites. This is already being done by Facebook and Instagram, and we are likely to see similar models being put into place on more and more social channels.
Rise of D2C
It’s becoming increasingly important for brands and retailers to know who their customers are, how they buy, and where they shop. Because of this, it’s likely that we’ll start seeing more traditional brands move away from wholesale and towards direct-to-consumer business models. This way, they’re able to own the customer and compete with retail giants like Amazon.
As more and more channels start introducing social commerce capabilities, businesses need to reexamine their existing processes. Is your approach to product feed management, order management, and content syndication agile enough for the social commerce playing field? If not, now is the time to start investing in agility.
This updated article was originally published on February 26, 2020.