Social commerce takes off as advertisers turn to platforms

During the first lockdown of 2020, a number of retailers in the popular Kildare Village shopping center turned to WhatsApp to offer a virtual shopping service as they tried to find a way to move their stock.

At the time, only essential retailers in the country were allowed to open, and a sense of dread, doom and uncertainty gripped the rest of the industry.

While most luxury brands in Kildare Village have global websites, fulfillment and warehousing are usually handled in the UK or another European country. For retailers who had stock on their shelves or hanging from railings in Kildare or elsewhere, it was a nervous time.

Using WhatsApp, retailers in Kildare Village were able to upload stock photos and interact with potential customers using the messaging and video features that come with the app. Initially, it was far from a perfect customer experience, but it showed what savvy retailers can do with social media apps while, to be fair to the retailers in question, it demonstrated a creative solution to what was a very difficult situation. And good luck to them.

On a much broader level, however, using social media platforms to sell goods has become a big business as advertisers and brands look to complement their existing sales channels, with new channels like Facebook, Pinterest , TikTok, Snap and WhatsApp.

Like everything else in the world of advertising and marketing, this trend has a name: social commerce.

A 2021 study by Sprout Social, the social media analytics firm with EMEA headquarters in Dublin, found that Irish consumers are increasingly turning to social commerce. The Sprout Social Index showed around 63% of Irish consumers bought directly from a brand’s social media in 2021, a threefold increase from 2019.

More recently, another report published by Accenture in January 2022 revealed that the global social commerce industry is worth approximately $492 billion (€442 billion) and is expected to grow three times faster than traditional e-commerce to reach 1 .2 billion by 2025.

Accenture’s definition of social commerce is a person’s complete shopping experience from product discovery to payment process takes place on a social media platform. Clearly, it differs from e-commerce which encompasses purchases from a brand’s website. Like Sprout Social, Accenture found that 64% of social media users surveyed globally made a purchase in social commerce in 2021.

Accenture’s report also predicts that by 2025, the most social commerce purchases globally are expected to be in the apparel industry at 18%, with electronics accounting for another 13%, and fresh food and beverages. 13% more.

“Social commerce is a leveling force that is driven by the creativity, ingenuity and power of people. It empowers small brands and individuals and forces big brands to re-evaluate their relevance to a market of millions,” notes Accenture’s report.

At a time when competition between different social media platforms, with their walled gardens, is intense, the rise of social commerce comes at an interesting time for the broader digital marketing universe.

While marketers have never had so many choices when it comes to digital channels, giant Google still reigns supreme when it comes to not just search advertising, but digital marketing in general.

As the pandemic has shown, brands have redoubled their efforts to accelerate their digital transformation. Much of the investment made over the past two years has been in areas such as search engine optimization – so Google can find and rank a brand’s website – as well as developing commerce capabilities. electronic.

Then on the back of that, Google is also there to take your money if you want to advertise your products.

While social media platforms have done a good job of sucking in advertising from advertisers to boost their brand or promote sales, in the past customers had to leave the social media platform they were using. By building their social commerce capabilities, however, social media companies can keep customers on their platforms while giving them a bigger share of the overall digital market.

Another key consideration in all of this is how people use the internet. Many social media companies claimed shoppers were no longer using search engines like Google to find the things they knew they wanted and at the lowest price. Instead, many consumers have shifted from a utility mindset to a discovery mindset. Now, according to social media platforms, they are just as likely to act – and buy – on the recommendation of a friend or social media influencer.

That may be true, but Google is still the search giant to beat.

While in the past people may have searched Google for the cheapest headphones or laptops, there is growing evidence to suggest that search queries are changing.

Google search data over the past two years, for example, shows a huge increase in people searching for “the best” as opposed to the cheapest. So the mindset of discovery is not limited to social media users, although it’s easy to see why social media platforms would want to convince us otherwise.

But social commerce is here to stay, whether we like it or not or find it boring. If Accenture’s predictions pan out, some brands could go straight to social, bypassing the need for a website altogether.

But in case there is the idea that you can just set up a store on Facebook or TikTok and sell your wares for nothing, forget it. Like all social media and digital platforms, you have to pay to play. And of course, look before you start.

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