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The Rise of Social Commerce – Why Retailers Must Pay Attention

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Credits: Tradebyte

Alexander Otto, Head of Corporate Relations, Tradebyte

According to recent figures from Kepios, there were more than five billion social media users globally at the start of April 2024. This number makes up a colossal 63% of the world’s population, and has more than doubled since 2016.

The average user now spends almost two and a half hours a day on social media apps – that’s around 15% of their waking lives. Any space – physical or digital – where consumers spend this much time represents a huge opportunity for brands to connect with their intended audiences.

Smartphones have become hand-held billboards and apps like Instagram, TikTok and Facebook are unanimously considered powerful tools in the digital marketing kits of any brand or retailer. Indeed, it’s par for the course to be served up an ad for that pair of trainers you’ve been thinking about whilst scrolling your usual feed of holiday snaps, birthday celebrations and brunches.

Smartphones – the most powerful digital marketing tool

But recent years have seen this form of marketing taken one step further, with shopping features now built into social channels that allow customers to browse, add to cart and checkout all without leaving the platform. Suffice to say, social media has evolved far beyond its original purpose of keeping up with family and friends.

Today’s social apps are vibrant marketplaces. As well as a place for retailers to express their brand identity and interact with customers in increasingly personalised ways, they’re also a new type of search engine, where consumers research potential purchases, seek authentic product reviews and compare the best deals.

This blurring of social and commercial constitutes what we now know as social commerce. Social commerce differs from e-commerce in that the purchasing process is done via social media apps rather than a traditional online webpage, and often heavily relies on influencer marketing strategies.

Live shopping and social commerce

Live shopping via social channels, where customers are presented with items during a live stream – often by social media influencers – is a key string to the social commerce bow. By directly conversing with shoppers, a sense of community is created that builds a deeper connection with the brand for greater trust and loyalty.

Social commerce emerged as a response not only to consumers’ increased time spent on these apps, but the changing consumer mindset. With high expectations for how they interact with their favourite brands online, today’s consumers value convenience above all else. They demand seamless, integrated experiences across all touchpoints of a brand, from social media presence to checkout.

Convenience is king

If previously conventional e-commerce marketing tactics required customers to switch platforms for checkout, social commerce minimises the potential to lose a sale due to inconvenience. This is particularly key to reaching younger generations with both shortened attention spans and an increased number of applications, websites and brands competing for their attention.

The increasing number of retailers recognising the value of this new mode of shopping is giving rise to a fiercely competitive environment, and online vendors who fail to respond to emerging trends in social media could stand to lose their customers to competitors.

Sit up or miss out

The rise of independent, social-first retailers is making the call to action even more urgent, as they utilise online platforms to produce more creative social content and beat out competitors. This poses a significant threat to traditional and legacy retailers, who may be less agile and still ironing out the creases in their e-commerce strategy.

These trends also have a ripple effect on the “good old” marketplaces. In competitive times, the onus is on them to detect and integrate these shifts into their interfaces, stepping away from being a purely commercial endpoint towards being a fully-fledged entertainment centre. Even established players will need to get creative in order to retain their market share; examples of this include having weekly influencer rotations providing styling advice and other opportunities to engage, or showcasing assortment pieces in a way that goes beyond the typical, such as video snippets.

Investing in a solid social commerce strategy will prove invaluable for retailers in terms of boosting brand awareness, customer engagement and overall revenue. The native checkout features that are inherent to social commerce lead to better conversion rates, while the integration of social channels also offers access to sophisticated analytics and data-capture capabilities that make it much easier for retailers to understand their customers’ needs and desires. By harnessing this data effectively, it’s possible to stand out through greater personalisation and social experiences to make users come back for more.

Alexander Otto, Head of Corporate Relations, Tradebyte Credits: Tradebyte
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