The current state of social commerce and why it requires agility
February 26, 2020
Today’s brands face an everchanging commerce ecosystem. With new channels appearing daily and existing ones going viral overnight, it’s more important than ever for businesses to invest in agility. However, in the words of our CMO, <a href="https://www.linkedin.com/in/marcelhollerbach/" target="_blank" rel="noopener noreferrer">Marcel Hollerbach</a>, “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. <br> Hear what else Marcel has to say about social commerce in his interview with <a href="https://www.linkedin.com/in/benjaminrund/" target="blank" rel="noopener noreferrer">Ben Rund</a> from <a href="https://data-talks.club/" target="blank" rel="noopener noreferrer">Data Talks</a>. <br> <center><iframe width="560" height="315" src="https://www.youtube.com/embed/X4aXl87xa14" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe></center> <br> In this article, we’re going to take a closer look at social commerce and how agility can help you succeed.
Why social commerce is booming and what makes it unique
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) are instead using online streaming services and social sites like YouTube, Tik Tok, and Instagram. As a result, advertisers have followed. Now, social media channels are some of the highest-grossing advertising platforms available <br> But is this social commerce? Not quite. <br> Social commerce is often confused with social media advertising. However, the two aren’t the same in practice. The main difference lies in where the consumer completes their final purchase. Traditional social media ads redirect consumers to a business’s website once clicked. There, the customer can complete the transaction. In social commerce, however, consumers are completing transactions without ever leaving the social network. This is already possible on Instagram with Checkout on Instagram, and soon, Facebook will join the social commerce train. <br> Here’s a look at <a href="https://about.instagram.com/blog/announcements/introducing-instagram-checkout" target="_blank" rel="noopener noreferrer">Checkout on Instagram</a>: <br>
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 working with social commerce channels. Here are just a few of the many ways in which agility can be used to get ahead in social commerce. <br> Compete with microbrands: As the popularity of channels like Pinterest, 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 Marcel Hollerbach puts it, “Being agile is not just the technical requirement but it’s really a business requirement.” <br> 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. <br> 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 channel that may 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, its prominence is quickly diminishing. There are many browsers that have already stopped supporting it and even Google is set to eliminate the use of third-party cookies on its Chrome browser by <a href="https://digiday.com/media/google-plans-kill-off-third-party-cookies-chrome-within-2-years/" target="_blank" rel="noopener noreferrer">2022</a>. <br> 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 checkout, rather than redirecting shoppers to third-party websites. This is already being done on 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 data integration agile enough for the social commerce playing field? If not, now is the time to start investing in agility.
Senior Content & Copywriter