Social commerce: the e-commerce revolution

Fact number 1: Almost everyone regularly uses e-commerce to store for goods and services, and the market continues to grow unstoppably. That's great for you as an online retailer.

Fact number 2: Almost everyone uses social media platforms to chat and find out the latest news. Couldn't that also be great for you as an online retailer? And how! The keyword is social commerce. This is the synthesis of the two worlds of e-commerce and social media - and one of the most important trends for online retail in the future. Find out exactly what's behind it and how you can benefit from social commerce here.

What is social commerce?

Social commerce is the sale of goods and services via social media. These include platforms such as Meta or Facebook, but also comment pages and review areas such as on Amazon. The possibilities in social commerce are very diverse and the structures are in a constant state of dynamic change. Basically, however, it is always about combining the greatest advantages of e-commerce and social media.

E-commerce companies set up accounts on social networks such as Instagram, Facebook (Meta) and YouTube. They use them to convey their messages, provide information about developments and - most importantly - place purchasable items in appealing posts and attractive product photos. This is often done via influencers who reach large communities with relevant interests and purchasing behavior.

If users like the items they discover while browsing, they can also buy them directly. The networks have integrated their own shopping functions for this purpose. You can recognize them by "Shop the Look" or similar CTAs, for example. They make it easy to see which content is available for purchase. Users are then often redirected to the company's actual store pages, where they complete the purchase. But there are even more dynamic options: companies can use store systems such as Shopify to integrate their offer into their social media presence. Integrated check-out systems allow users to pay for items without having to visit the store page or payment service provider. This means that users rarely have to leave the familiar environment of the social media platform to make a purchase.

Users also have the opportunity to interact with the companies, for example through comments, likes and direct messages. They share the latest articles or personal experiences, write reviews and generate a lot of attention - and therefore valuable usage data - for brands.

These are the biggest advantages of social commerce for you

E-commerce has revolutionized the way we shop. Free from store opening hours and limited product ranges, online stores offer items from all over the world and deliver them conveniently to our doorstep. Social commerce is the next stage in the development towards greater convenience and speed for shoppers. But you as an online retailer also benefit in many ways from the integration of social commerce into your e-commerce strategy:

• You move your offer to where your target groups spend a large part of their time anyway.
• An online store is no longer a mandatory requirement for your e-commerce. You can use social media as marketplaces with ready-made structures and huge existing communities.
• In particular, users of trendy platforms such as Pinterest, Instagram and TikTok tend to make impulse purchases. With cleverly placed ads, you can meet this basic willingness to buy and trigger a spontaneous desire for products that users can satisfy directly.
• With a regularly managed social media account, you can generate attention for your offer and special promotions.
• Likes, short ratings and reviews not only create trust in a product or brand, but also convince those who are undecided to make a purchase, because people also (and especially) tend to adapt the behavior of others or seek confirmation for their own behavior on social media.

The "social" decides the "commerce"

Social commerce is always about more than just product placements and sales. Today's users want a personal connection to a brand and an exchange at eye level with likeable, approachable, trustworthy and authentic people.

You can inform your prospective customers about news on additional channels, represent your company values and learn a lot about your target groups through direct communication. Only if you understand social commerce in this sense and take it seriously can you convince increasingly critical, enlightened target groups.

These are the challenges of social commerce for you

Additional sales channels, large communities, convenient store structures for retailers and buyers alike - so everything is great with social commerce? Not quite. There are some limitations and challenges that you should be aware of as an online retailer before you conquer social media with your e-commerce:

• Not all product categories are equally suitable for social commerce. While fashion, lifestyle and electronics items, for example, can be marketed well on social media, some other goods may appear less attractive or even inappropriate. You need to assess whether and how you could place your goods or services so that they stand out in users' feeds in such a way that they trigger a desire to buy.
• You place part of the responsibility for your business in the hands of the platforms. This concerns structural aspects such as the preparation of the store system, but also issues such as your integrity: If the reputation of a platform falls in the eyes of the public, this has an impact on user numbers and therefore your clientele.
• As on Marketplaces, fees are charged for each item sold, which you must deduct from your profit and transfer to the social media platform.
• Social media is the birthplace and stronghold of shitstorms. If users are dissatisfied with your products, services or campaigns, you need to react quickly and prudently so that your company does not end up suffering irreparable damage.
• Sometimes the social media platforms keep the usage data collected from social shopping for themselves. This makes it more difficult for you to create data sets for target group analysis.

How your social commerce works: examples and tips for your strategy

Numbers and feelings

Products that you offer for sale on social media must not be too expensive. They must be within a price range that does not deter impulse and spontaneous buyers. An upper limit of 100 euros is considered the optimum here. Anything above that will make potential buyers more hesitant and refrain from making a purchase.

For users to even consider making a purchase, a product must also trigger certain emotions. This is often referred to as the wow factor. Ideally, the product stands for a desirable attitude towards life and conveys its practical benefits in a flash. Appealing content that is precisely tailored to the target group is therefore of crucial importance in social commerce.

Exclusivity

Social media is the place for hypes and impulse buys. By creating an artificial exclusivity for certain items, you can increase their appeal enormously and arouse spontaneous desire. Classic examples of such artificial shortages are

• limited quantities of articles
• limited periods for sale
• Exclusive social media sales

For fans of certain brands, such exclusive offers are often irresistible because they satisfy the need for an exclusive social status that is often sought and flaunted on social media.

Pictures or videos?

The success of short video platforms such as TikTok makes it clear: quickly consumable, easily accessible "snackable" content is becoming increasingly popular. This applies to pure entertainment as well as to content marketing in general. You should always keep this trend in mind when presenting articles. Videos allow you to present products and features that require explanation in a clear and entertaining way in a short space of time.

Nevertheless, use the video format sparingly, preferably for highlight articles in your product range. After all, images can be consumed even faster, which is why consumers can perceive significantly more of them in less time. In addition, online users have less and less patience for individual pieces of content. A good mix of lots of images and some video content is best suited to consumer behavior today.

Lean customer journeys

Always put yourself in the shoes of your potential buyers: When people browse social media, they are on curious discovery tours, open to new things and ready to reward themselves with a spontaneous snap - much like a stroll through the city center or mall. With well-crafted content that has the necessary wow factor, you can meet them at an early point in the customer journey.

It would be fatal if the spontaneous wow moment were to fade away due to lengthy processes. If customers had to switch to your online store after their discovery, add the item to their shopping cart again, go to the checkout and enter their payment details, the magic would quickly come to an end. Therefore, make sure that your store system is seamlessly integrated into the respective social media platforms and that prospective customers don't have to leave them to get their items.

Conclusion

Social commerce is still little known in Germany, and its share of total e-commerce sales is still at a low level. At the same time, however, collaborations such as those between Facebook and Shopify and the trend towards a metaverse, into which we are increasingly shifting our everyday lives, show two things:

1. Social commerce is a trend that will become even bigger in the future.
2. Now is the opportunity to take a pioneering position in social commerce.

Of course, it depends on whether you offer suitable products or know how to market them in an appealing way. You must also be aware that a new way of thinking is needed in sales - more democratic, more communicative, more approachable. This often requires a separate department in your company. If you manage to skillfully position yourself in this promising field, you can achieve essential goals as a retailer with social commerce via Facebook, YouTube and the like: more satisfied customers, more traffic, higher conversion rates and a positioning as a brand at the cutting edge.