Social commerce is one of the pillars of the modern commerce landscape. The term refers to the process of selling items directly on social media, with consumers discovering, researching, and buying products without ever leaving a social network.
Definition of social commerce
Since its inception in the middle of the 2000s, there have been various acknowledged definitions for the term “social commerce.” Steve Rubel from Edelman defines social commerce as “creating places where people can collaborate online, get advice from trusted individuals, find goods and services and then purchase them.” Forrester’s Jeremiah Owyang calls social commerce the “Fifth Era of Social Media,” noting that “brands will serve community interests and grow based on community advocacy as users continue to drive innovation in this direction.” You can find many more definitions for social commerce from thought leaders worldwide, demonstrating just how complex and nebulous this term is.
A common denominator? Social commerce relies on users of social platforms and their intersocial dynamics to sell products and services. Organizations must adapt and integrate themselves into an evolving and dynamic ecosystem to compete for audiences and deliver excellent online shopping experiences.
What makes social commerce so important?
The modern landscape of the Internet enables products to go many different ways to reach buyers. Arguably, the most cost-effective process for a business is to let product travel from one consumer to another, or even from one very influential consumer – influencer/creator – to a new audience. When done correctly, social commerce can generate incredible revenues while keeping marketing costs relatively low. It doesn’t stop there: Social commerce is a powerful tool for creating brand awareness and enabling efficient feedback loops because the consumers can communicate directly with a seller or brand. A business can also monitor the online discourse forming around a product or brand.
In social commerce, user-generated content is key to spreading product information to new audiences. Online shoppers share their purchases, ratings, and pick lists, enabling other users in their network to engage with a product organically and from a trusted source. The cascading effects of social commerce mean that a product can “go viral”, a brand can create organic communities, and an organization can maintain a lively and faithful audience that ideally nurtures and grows organically.
The caveat: Only a high-level social commerce strategy can leverage its potential, and new organizations see themselves confronted with an ever-growing complexity in the commerce space. The explosion of social commerce plays a major role in the phenomenon known as Commerce Anarchy. Businesses must implement plans to combat it.
The most important social commerce platforms There are hundreds of social commerce platforms. However, it is relatively easy to define the “big 5” going by global user numbers:
- Facebook: 2.9 billion users
- Instagram: 1.2 billion users
- TikTok: 732 million users
- Snapchat: 528 million users
- Pinterest: 459 million users
Lines can get blurry when applying the “social commerce platform” label onto a social network. We could, for example, include YouTube. It would then be the second biggest after Facebook. The same is true for Reddit, Twitter, Quora, LinkedIn, Discord, and Twitch. All of these platforms have serious social commerce potential, but their design is not as obviously tailored toward product data. For example, you cannot sell a product on Reddit or Twitter directly on-platform but you can advertise it by creating supporting narratives.
And this list is only centered around the US ecommerce ecosystem. While the Top5 are heavyweights worldwide, there are big players in other areas who cannot be ignored. For example, in Europe, the platforms Netlog and XING are serious competition to LinkedIn, while in Southeast Asia, hi5 is a games-focused social platform that rivals Facebook’s gaming features.
Understanding the social commerce landscape and the ins and outs of every platform – the top 5 but also the ones orbiting them – is key to an effective social commerce strategy today.
Why do businesses need a social commerce strategy?
Selling on social platforms is highly lucrative if executed well, requiring a high-level strategy. Doing it without a solid plan can damage a brand’s reputation. A business should be aware that selling on social commerce comes with many challenges. Success on a social platform usually follows a considerable period of trial and error.
A solid social commerce strategy entails many individual strategies according to the respective target platforms and audiences. Market research is necessary to paint a complete picture: What are competitors already doing on these platforms? What does the target audience care about? How can a business integrate its products into the social experience? Who are the opinion leaders and influencers in a certain bubble, and how can a business utilize its potential? This only scratches the surface of social commerce’s complexity.
One key point is that social platform users do not primarily use these networks to purchase products. Strategies need to approach social commerce very differently from other channels – ad campaigns or e-mail. One such strategy native to social commerce platforms is influencer marketing.
Still, if we consider social commerce as just another sales channel, it all starts with the product. A product is made up of digitally composed bits of information that give it content. This content needs to be put on social commerce platforms, but doing this correctly can be challenging - especially if a business wants to bring hundreds, thousands, millions of products and their variations to their consumers. In other words, a high-level social commerce strategy only works in conjunction with a matching technical setup.
How do you manage your product data on social commerce platforms?
Keeping product information up-to-date across multiple social commerce platforms will play a major role in any successful strategy. Simply put, businesses must ensure their product data is exported tailor-made for the target platform’s requirements. Because there is no universal standard for product data, exporting the same data to different channels will lead to faulty, missing, or misplaced product data. This, in turn, will result in poor online shopping experiences, the loss of sales, fewer incentives for users to share a product, and on a higher level, the brand can be damaged, and brand awareness will suffer.
Therefore, a successful social commerce strategy is grounded in a solid solution for this issue, ensuring that products automatically appear on all kinds of platforms as intended. Two commonly known solutions for this are feed management – with which a business perfectly manages their entire catalog’s product data in an efficient way – and product content syndication, an AI-supported process that adjusts product data according to the relevant social commerce platforms’ requirements.
P2C unlocks social commerce’s potential
A complete solution for bringing products to audiences is a product-to-consumer (P2C) platform that bypasses the pitfalls of commerce anarchy and takes reliable control of the so-called product information value chains that denote the complete, tailor-made traversal of product data from a business to its buyers.
Once this is set up, a business can simply focus on actually selling their products on social commerce platforms – along with all social commerce strategies necessary to enable this – without having to worry about inaccurate product information management damaging their brand.
For more on social commerce, read our free 2022 social commerce guide.
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