- The Evolution of Social Commerce: Platforms Race to Adapt to Changing Consumer Behavior - 1. March 2023
- Are the Streaming Wars Over? - 14. February 2023
- Generative AI: What Marketers Should Know - 24. January 2023
“Commerce is everywhere. The purchase journey is non-linear. It can happen from seeing an ad on Instagram, an influencer on TikTok, a drop on Twitter. You might be window shopping in person, or a friend might send you a link.” – Arpan Podduturi, Director of Product Retail and Messaging, Shopify
The pandemic accelerated the shift, but momentum shows no signs of slowing.
Just a few months into 2020, pandemic lockdowns led to a 77 percent increase in online shopping year over year (Forbes), accelerating the adoption of e-commerce by five years practically overnight. Shopping, working, and socializing online became the new normal, and e-commerce quickly began evolving. Now even with the pandemic waning and life returning to normal around the world, there hasn’t been a “shift back” to previous offline behaviors.
By 2025, global social commerce is expected to account for 41 percent of total e-commerce and over $2.2 trillion in sales worldwide (Statista). In 2023, more than half of US users are expected to buy something on a social platform, largely driven by the growth of TikTok. The number of buyers on the platform is expected to rise by 72 percent to 23.7 million, compared to 9 percent growth on Instagram (41 million) and 12 percent on Facebook (63.5 million) (eMarketer).
Nearly every social platform is evolving to capture demand.
Meta is narrowing focus.
Even though Facebook and Instagram account for most social buying this year, many of their e-commerce initiatives did not pan out. They are now sunsetting features like Live Shopping on Facebook and the Shop Tab on Instagram. The company will instead focus on shopping-related advertising in 2023 and its continued expansion into the Metaverse.
Pinterest looks to expand.
In the last year, Pinterest has invested in a shopping API to allow merchants to sync their product catalogs, personalization enhancements to reach users with more relevant results, a hosted checkout feature, and an augmented reality (AR) try-on tool for furniture and décor. In the next year, they are planning to embed shopping into every aspect of the platform by making every pin shoppable and streamlining the path to purchase. However, they are facing sluggish user growth which will hamper their ability to increase advertising share.
Amazon tries to mimic TikTok’s success.
In December 2022, Amazon launched “Inspire”, a new short-form video and photo platform that allows consumers to explore products and shop from content created by influencers, brands, and other customers. The goal is to lure users away from TikTok directly onto their website to interact with content and drive sales. For now, Inspire is only available to select customers in the US.
Amazon has made past attempts at a social media offering, rolling out a Pinterest-like feature called Interesting Finds, as well as Amazon Stream, Amazon Spark, and Amazon live. It has not yet found success as the content has existed only to push products, a challenge it will still face with the launch of Inspire.
TikTok’s meteoric rise continues.
TikTok has become the ultimate destination for influencer content, reviews, and product recommendations – the #TikTokMadeMeBuyIt phenomenon has over 8 billion views alone. It’s continuing to transform from a discovery vehicle to a shopping platform through new ad formats, a Shop feature for US merchants, and a partnership with TalkShopLive for livestream commerce. They are also planning to open fulfillment centers in a bid to become an end-to-end commerce platform.
The key to their success has been a user-first approach, building on the organic behaviors that exist on the platform rather than trying to force a linear purchase journey. Advertisers on TikTok should follow suit, ensuring that they are authentic, creative, and providing value in order to genuinely connect with their consumers.
What’s next? Metaverse madness.
The Metaverse in its current iteration is a collection of three-dimensional virtual worlds that are focused on social connection. Advertisers have already taken advantage of branded opportunities, even selling digital goods and apparel. In 2021, Coca-Cola auctioned off collectible NFTs in Decentraland, including a collectible bubble jacket, and Gucci opened their “Gucci Garden” in Roblox to celebrate their 100th anniversary. Louis Vuitton created their own Metaverse called Louis the Game, taking users on a journey to collect birthday candles over a while telling the story of Louis Vuitton’s founding. These are just a few examples as brands race to cross the new frontier – market revenue in the Metaverse is projected to explode from 47 billion today to $678 billion by 2030 (Grandview Research).
The Net-Net: How to Succeed on Social
Social media is an ideal environment for commerce, playing the role of “word of mouth” on steroids. It accelerates the customer journey from awareness to purchase almost instantly, streamlining the purchase process in-app for a completely native experience. Furthermore, Paid Social Media acts as the perfect conduit to accelerate this buying behavior, because it’s powered by the customer data that underpins these scalable recommendations to virtually any audience.
To succeed on social, brands must ensure that their strategies reflect their advertising data models with the right amount of authenticity, humanity, and creativity. Without creating a fundamentally “social” experience, brands will struggle to build favorable brand perception, loyal followers, and collaborative partnerships that move the needle. And as more brands experiment with branded opportunities within virtual worlds based on social connection, maintaining a connected brand experience across all channels will be key to success.
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