What is social commerce?
Have you ever browsed through your Instagram stories and gotten an advertisement for a product or brand? If you look closely at the story, you may even see the ‘swipe ‘up’ function or a shop tab that takes you to their Instagram page or online storefront. Either way, you haven’t left the Instagram app.
Similarly, you could watch an influencer review a product live on TikTok and find the bag icon on their profiles to purchase the product without leaving the app. Selling goods and services directly through social media platforms is known as social commerce. With social commerce, customers go through every step of the purchasing process, from finding products sold by retailers and paying for them, on social media.
What is e-commerce?
E-commerce, short for electrionic commerce, refers to buying and selling of goods and services over the internet.
Social commerce differs from traditional e-commerce, described as shopping through an e-commerce site , an online store, or a specific branded app. The buying process of the two differ as e-commerce customers typically browse products on a website such as Shopify, add items to their cart and proceed to checkout to complete their process. In social commerce, the buying process is integrated into social media platforms to allow customers to browse and purchase products without leaving the social channels.
In addition, e-commerce sellers may use social networks to do social selling through social media marketing. Social selling is when a seller communicates directly with their customers. By definition, e-commerce is not social commerce, as social commerce enables customers to make purchases directly through social media platforms.
To read about cross border e-commerce, go to What is Cross-Border eCommerce and Why You Should Consider It.
Why you should use social commerce
High social media usage
According to Datareportal, about 59% of the ‘world’s population uses social media, with the average daily use per person being 2 hours and 31 minutes. As one of the most used forms of media, business owners must tap into the social media market. For example, you can advertise new products through social media, build customer relationships, and conduct social commerce. Social media has shown that there are no longer geographical borders when sharing content. Everyone everywhere can share posts to all corners of the world. Businesses can use social media to conduct social commerce to reach an international customer base.
Tap into the Gen Z market
Gen Z are known to be digital natives as they grew up with the internet. According to Insider Intelligence, nearly 9 in 10 Gen Z adults spend at least an hour on social media, while about half spend more than 3 hours. Gen Z mainly uses internet-based media, and social media is one of them. They are also more likely to try new features and create user-generated content on social media sites. Furthermore, 50% of Gen Z are likely to make purchases through social media. These findings show that an excellent social commerce strategy is critical to tap into the Gen Z market.
Growth of social commerce
The worldwide social commerce market generated about US$724 billion in revenue in 2022, as reported by Statista. Furthermore, social commerce trends show that social commerce will continue to grow in 2023. According to the same report by Statista, the global social commerce market is predicted to generate about US$947 billion. With the growing importance of latching on to social commerce trends, it would be wise for business owners to venture into the avenue.
What are the top social commerce platforms of 2023?
Instagram Shopping is a set of tools that lets users browse and purchase from your brand’s images and videos on the Instagram platform. With an Instagram business account, you can turn on shopping features to launch your Instagram shop.
You can upload your products on your storefront, and when a shopper taps on the item, it will take them to a product detail page, which includes all pertinent product information from your product catalogue. Instagram even allows you to organise the items in your storefront into different categories or collections, so shoppers have a better shopping experience and know exactly where to find what they’re looking for.
You can also attach product tags to create shoppable posts. Customers can quickly tap the product tags on the products to learn additional information from your Instagram feed post, stories, reels, and live streams. This nifty tool also lets you highlight up to five items from your catalogue.
Facebook and Instagram come from the same parent company, Meta, so the features of an Instagram shop and a Facebook shop are not too far from each other. You can link your Instagram and Facebook account together to streamline your business. With nearly 3 billion monthly active users, as reported by Datareportal, Facebook is one of if not the most frequented social media sites.
Much like Instagram, you can upload products on your product page with detailed descriptions. You can also categorise items into a product catalogue for a better shopping experience. Facebook even allows you to customise your store layout.
You can also create a shoppable Facebook page by changing the colour of the buttons and links, the alignment and size of titles, also the outline and shape of buttons. This customisation allows expressing your brand’s identity through your Facebook page.
TikTok
Another example of social commerce is selling on TikTok. If you’ve ever used TikTok, you may notice posts with a little yellow bag in the bottom left corner which acts as a Shop Now or Buy button. With over a billion users, TikTok is one of the biggest social media sites, making it also one of the biggest social commerce sites.
Like other social commerce sites, you can set up a storefront by uploading your products onto the platform. On TikTok, you can link your products to just about any post, and if you engage with social media micro-influencers, they can use the same yellow bag to link to your storefront. One of the most popular ways sellers or retailers engage with potential customers on the app is by hosting a live stream. During their live streams, they have special offers, pack customer orders, or demo their products. Shoppers can enjoy live shopping as these live-streaming sessions usually have the little yellow bag.
Pinterest is a social media platform you usually frequent to seek inspiration. Whether for a recipe, house décor, or crafts, Pinterest is the go-to site for mood boards and looking for ideas. ‘Wouldn’t you love it if you could purchase the exact rug in the inspiration picture? Well, Pinterest has resolved that problem with product Pins.
Retailers can publish a pin with a link to the product page of their site. With this feature, Pinterest users can purchase products that are part of their inspiration. This feature also betters the online shopping experience of Pinterest users as they ‘don’t have to search the internet high and low for a product that somewhat looks like the Pin they saw.
Tips for effective social commerce
Schedule consistent posts
Creating a consistent posting schedule is essential for running a social commerce storefront. Having a consistent posting schedule allows you to keep retention amongst your followers. A consistent posting schedule allows you also to build and communicate better with your audience. Encouraging followers to interact with you will enable them to give honest feedback about your business that can help you improve your business and could also convince other social media users to trust your brand.
Create a creative social storefront
Since the pandemic, there has been a shift in people’s shopping habits. During the height of the global pandemic, we weren’t allowed to go out and shop, so most of us turned to online shopping. Online shopping has continued to be the favoured method of shopping for many due to its convenience. Many still learn about new brands and products through social media.
As a brand looking to expand into social e-commerce, you must consider having an attractive and visually pleasing social media page to attract potential customers. Of course, this doesn’t always mean having the most aesthetically pleasing page. It also means the content you post has to suit your brand image and the platform you’re selling on.
For example, it may be more suitable on Facebook to have a layout and post that make the business look professional. Also, as previously mentioned, most Facebook users are older, so they may want a clear and concise description of the products sold. Take retailers like Watsons Malaysia‘s Facebook shop, for example. The listings in their product catalogue are straightforward and straight to the point.
On TikTok, however, you may want to take a different approach since the users mainly consist of the younger generation. Posts on the platform that gain a lot of traction are those that show the adversities faced by the business, take part in current trends, or micro-documentaries showing the process of getting your product made. Humour and transparency are the main paths businesses take to promote online business. For example, Shopee Malaysia has a platform where they post humour-based, trendy videos.
Social commerce allows you to be more creative in promoting your storefront, which differs from e-commerce sites. For example, although you can customise the photos for your product listing, there isn’t a way to make yourself stand out from similar listings.
Understand your audience
Before opening a social media storefront, you must understand the target audience you are trying to attract. For example, even down to the social media platform, older generations may still prefer using Facebook as their primary form of social media. In comparison, younger generations use social media sites like TikTok and Instagram. Therefore, you must understand the demographic you’re trying to attract.
Understanding your audience allows you to be more deliberate when selecting products and language to suit your unique social media customer subset. You could also use hashtags in your social media listings frequently used by your audience for search engine optimisation on social media platforms.
Chatting on e-commerce platforms is usually a one-on-one conversation between you, the seller, and the customer. In contrast, you can converse with more people on social media, and others can chime in with their own experiences.
Use an AI chatbot
It is a must to answer all enquiries as that is one of the main factors influencing a customer’s purchase decision and abandoning the shopping cart. You may even get questions during non-business hours, so consider using an AI chatbot to streamline customer enquiries.
An AI chatbot can converse with thousands of customers simultaneously, allowing customers to get a response in real time and providing a better customer experience. It also allows you to be more productive as the AI chatbot answers most enquiries even outside of business hours, allowing you to attend to more pressing matters. AI chatbots can also help attend to international enquiries. They can be programmed to answer questions in any language you want.
Talkative is a service you can use to get started on customer service chatbots on social media. They can deploy their AI chatbot to many platforms, including Facebook Messenger, Instagram, and Twitter.
Influencer and KOL Marketing
Social media influencers and key opinion leaders (KOLs) have developed a reputation for their expertise in a specific area. The difference between the two is their level of knowledge. For example, a KOL in makeup would be a renowned makeup artist, while an influencer would be someone enthusiastic about makeup who shares it through social media.
Influencer and KOL marketing is the craze now as more and more businesses lean into this marketing strategy for their brand. Influencer marketing and KOL marketing are when a brand or a company collaborates with an influencer or KOL to market a product or service. Collaboration is sometimes less about promoting a single product and more about improving brand recognition. These forms of marketing are great as they are forms of word-of-mouth marketing which instil loyalty and credibility and build brand trust.
You are more likely to purchase an item recommended to you by someone you trust. Now, imagine a person with a strong following of people that trust them recommending a product to that audience. Influencers already have a large following, so if they promote a brand or product, brand awareness is now increased among these followers. In addition, if the influencer tags the ‘ ‘brand’s social media handle or is given an affiliate link to your store, it will increase the traffic to your store.
Social commerce success story
L’Oreal Malaysia was founded in 1995 and since then has promoted 14 of its brands in Malaysia, offering the most cutting-edge goods in every area of beauty.
In 2021 L’Oreal Malaysia began their efforts in social commerce by collaborating with AVANA. This social commerce platform allows businesses to sell through social media platforms such as Facebook, Instagram, Whatsapp and Telegram. L’Oreal Malaysia’s efforts in employing social commerce were a little less conventional as they didn’t use their social media platforms to sell their products but partnered with their salon partners. Besides the obvious benefit of increasing their sales, these efforts were also introduced to help brick-and-mortar businesses into the digital world after the devastating economic blow of the COVID-19 global pandemic.
Initially starting with 8 participating salons, that number quickly increased to 100 salons by December of the same year. The initiative allowed the salons to create buzz for new L’Oreal product launches, creating a higher conversion rate between interest and sales. In addition, the collaboration with AVANA allowed the participating salons to harness the power of social commerce and sell through multiple social media platforms. Through this initiative, the top 5 performing salons managed to collectively rake in a quarter of a million ringgit in revenue in less than 4 months.
This tactic presented by L’Oreal Malaysia is similar to that of KOL marketing. As a result, customers would be more likely to purchase haircare products recommended by a salon. L’Oreal Malaysia is more than capable of conducting social commerce or using its social media platforms to promote its e-commerce stores. However, it opted instead to employ the partnership they have with salons as they know the influence they have over its customers.
Use social commerce to expand your business
As a business owner, you should consider venturing into the world of social commerce and e-commerce for international expansion. Having an e-commerce store is an excellent step toward expanding your business to a global front, as the platform already has an international user base. You just have to capitalise on that. Social commerce, however, allows you to build a solid and loyal relationship with your customers, giving them more confidence to continue shopping with your business to recommend your business to others.
This article was originally published at Businessgo.hsbc.com
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