Social Media. It has changed the way we interact with each other and how we express ourselves. Half the worldâ€™s population is active on one social media platform or the other. The reach of social media is virtually unparalleled.
And this brings another new e-commerce opportunity. Never has the retail and e-commerce sector had the opportunity to reach such a huge global audience. Social commerce is the latest and wildly growing trend among modern retailers. E-commerce businesses are using it to engage their existing and potential audience, and have made it another channel of sales and revenue.
It only seems logical to use social media to sell products online, and social commerce is the next big thing in online retail. With the might of social media and the power of e-commerce, the future of social commerce looks to be a bright one.
Now that even traditional brick and mortar stores are pivoting towards online sales in light of the pandemic, social commerce is an innovative substitute for brands to engage and connect with their audiences.
Letâ€™s take a look at what the future of social commerce will look like and the trends to watch for in 2021.
Strong growth is on the cards for the future of social commerce
Reports suggest that over 87% of buyers on e-commerce platforms strongly believe that social media influences their purchase decision. Social commerce is not a brand new concept, it has been around for a while.
But what is helping boost its prominence and performance is the COVID-19 pandemic. The reliance on e-commerce has skyrocketed and the amount of time spent on social media has gone up. Blend the two, and you have a powerhouse of commerce just waiting to cash in.
All major social media platforms have developed e-commerce capabilities. From Pinterest catalogues to Facebook and Instagram shops to TikTok partnering directly with Shopify to enable online sales. Facebook is taking big steps towards its social commerce play. In May of this year, it announced Facebook Shops, which allows retailers to set up full-fledged storefronts on their Facebook business pages.
The company has replicated that on its other social media company Instagram as well, branding it as Instagram Shops. It is rolling out both these commerce features to more merchants in regular intervals.
It is allowing merchants that satisfy its eligibility criteria to access its â€˜in-app checkoutâ€™ feature. Using this, shoppers donâ€™t have to leave Instagram to make their purchase. It can all happen on Instagram itself.
Now WhatsApp too has been added to the mix, allowing in-app shopping. It will let users check out products on Facebook Shops and buy products directly via the chat option.
The coming year is probably the best time for social commerce to thrive.
Social commerce through conversational chatbots will pick up
Instant messenger platforms like Facebook Messenger, WhatsApp, Telegram are used by billions of people every day. This is why they are great resources for retailers to interact with their audience, and people to interact with brands and products.
All of these already are being used by businesses to communicate with their customers, and also to help them buy directly via them. Natively using these apps to sell products makes it even easier for consumers since they do not have to go register or use another platform or app to make their purchases.
Facebook has already introduced messaging based shopping. Facebook shops get a messaging button that allows consumers to chat with the merchants using any of its chat platforms â€“ Messenger, WhatsApp, and Instagram.
Selling via chat reduces the sales cycle and makes for a faster purchase experience for the shoppers. In the coming months, we will see more retailers sign on to implement messenger chat options to sell their products.
With the pandemic forcing many retailers into selling online, a low friction way for them to get started is with chatbots. It enables round-the-clock purchasing as well as an easier way to provide customer support and service for merchants.
Video and live streaming is the future of social commerce
A major chunk of content on social media these days is in the video format. In fact, all major social media platforms have a video feature â€“ in the form of short video â€˜storiesâ€™. Video offers far better engagement with audiences and retailers are taking notice of it.
Many online merchants are already using TikTok to sell their goods. Interactive videos that showcase the products in use are sure to grab the immediate attention of users on the platform. Similarly, some merchants are already putting up storefronts on Snapchat and using Instagram Reels to market their products.
Another video format gaining traction is live streaming. It is low-cost, lo-fi but brings in the views in hordes. Brands showcasing their products via a live stream can instantly connect with their target audience. Think of it as teleshopping, but with a 21st Century twist.
Two big players going after live-streaming shopping are Facebook and TikTok. While this concept is popular in China, the US market for live stream retail is very nascent.
Facebook has revealed that it is experimenting with this feature and will roll it out soon. TikTokâ€™s partnership with Shopify will leverage the short video and live video format to allow Shopify merchants to tag their products in them. Users can then tap on it to view and make a purchase on the platform, without ever leaving it.
With Facebook already replicating TikTok-like features on all its social apps, 2021 is when weâ€™ll see the social media giant step up its video social commerce game.
Influencers will guide the future of social commerce
Influencers have become a huge part of social platforms and how we consume media. The rise of social commerce makes them an even more valuable asset to brands. They have loyal followers always paying attention to what they have to say.
In fact, influencer marketing generates as much, if not more, revenue as other marketing channels. Influencers will play a bigger role in their capacity as brand ambassadors and enable sales directly on their social channels.
Retailers selling on TikTok and Snapchat have leveraged influencers and the nature of these platforms to see great returns. Both these platforms have a strong group of influencers with a large reach among the millennial and Gen Z crowds. This has proven to be far more effective than burning money on advertising, the returns on investment much higher.
Social media is here to stay and so are influencers. In 2021, we will see influencers become much more deeply integrated into the marketing strategy of brands. Influencers can also guide the brands on what their specific audiences like. Then the brands can curate custom products and campaigns that are highly targeted.
Social commerce is the next step in omnichannel retail
Since omnichannel retail is already a norm among many retailers, social commerce will be the next stage in its evolution. Retailers already advertise on social media to drive consumers to their websites or platforms. Now they will use the same advertising dollars to generate revenues, instead of just traffic.
With social commerce, they can engage customers and enable purchasing without them having to leave the social channel they are on. The advantage of this is shorter sales cycles and faster sales. Consumers can make a purchase instantly when engaged via social commerce. It will be critical for retailers to build out social commerce as a channel in their omnichannel retail stack.
And when building out another sales channel, retailers will need to deploy a robust inventory management software to track their orders and inventory efficiently. One that can easily integrate and centralize multiple sales and revenue channels will be key to success. With social commerce becoming a new source of sales, inventory will need to be mapped and tracked accordingly.
User-generated content for social commerce will kick-off
Word of mouth is still the best way to build brand identity and trust among consumers. Think of platforms like Tumblr, Pinterest, and Twitter. Users on these platforms can express their approval of a product by simply sharing it on their timeline. The social reach is magnified with every such share.
Brands can leverage this by using loyal customers to drive sales for them, without having to spend any money on advertising. Building a strong community for the brand will enable such buyers to share their experience with the product or brand on their social feeds. This makes for higher engagement and re-share value.
A great example of this is Pinterest. It has been a favorite destination for many in the US to look for inspiration when thinking of buying something. In fact, 48% of users on Pinterest have said that they use it for finding and shopping for things they want.
Brands are partnering with users on the platform with a large number of posts and followers to get other fellow users to â€˜pinâ€™ their products. These â€˜shoppable pinsâ€™ enable conversion from viewing to buying.
The future of social commerce will get more futuristic with voice and augmented reality
Voice recognition technology is improving and getting far more accurate every day. Alexa, Siri, and Ok Google are being used to query shopping-related suggestions more than ever. They are also becoming commonplace in many households through smart home devices.
Customers will use voice to search and discover new products, and if the ecosystem is built right, will make purchases via voice commands too.
Another great innovation that might transform social commerce is augmented reality (AR). Think about this â€“ a user can see how a product will look like in their respective surroundings. Wonâ€™t that be something?
Social media giants like Snapchat and Facebook have already dedicated massive resources to developing AR capabilities that can help increase sales on their platforms. Sure it is still early on in the AR social commerce journey, but it is one that will soon gain traction.
Social commerce will continue to grow in 2021, with both e-commerce and brick-and-mortar retailers adopting it to drive sales. As and how social media grows, so will the idea of social commerce.
What other trends do you think will evolve in the social commerce landscape? Let us know in the comments below!
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Sharan is an avid writer with experience writing on different technologies for startups in various domains. Heâ€™s a self-professed tech nerd and start-up buff who likes keeping abreast with all the latest news in these areas.