One of the hottest topics of conversation in digital commerce right now is undoubtedly the evolving role of social media. As we have written previously, all eyes are on the transition we are starting to see from social as a marketing channel to social as a sales channel in its own right.
Over the past decade, the likes of Facebook, Twitter, Instagram, Snapchat and Pinterest have made themselves indispensable tools in the digital marketer’s arsenal. With 3.5bn active users worldwide, social media provides audience reach on a scale to rival Google and the other search engines. And while that has seen PPC advertising make the leap from search to social, Facebook and the rest have also inspired brand new approaches to marketing based around engagement, reputation building and the power of word of mouth.
For the social media companies themselves, however, having brands piggyback on their success to distribute content to thousands of followers at once and provide a new channel for customer service offers only limited financial rewards. Yes, they have introduced paid-for commercial accounts and have turned PPC into a major source of revenue. But the social giants have also realised that, rather than just being vehicles for brands to promote themselves and their products, there is even more value in joining the ranks of ecommerce channels - platforms where people can buy as they chat and share.
That is why, as early as 2014, Facebook introduced Buy Buttons, allowing brands to link product listings to external shopping carts. That is why Instagram innovated with shoppable posts and stories, allowing brands to effectively add buy buttons to any posts mentioning their products. And that is why, this year, Instagram has also rolled out the first completely native social commerce platform - allowing users to actually buy a product they like when they see it from within the site, rather than having to click to an external page.
This drive towards native social commerce has led some to speculate that Facebook, which also owns Instagram, has designs on taking on Amazon at its own game - effectively creating a ‘social marketplace’ where brands and their customers can both interact and do business. With more than 3bn active users between them, Facebook and Instagram certainly have the sheer scale to challenge Amazon. And the implicit advantage is that social commerce can cover the entire online shopping journey in one single place, from inspiration and engagement through content all the way to transaction, perhaps via a few friendly recommendations from trusted friends and key influencers.
This all sounds like a model tailor-made for success. But one question remains - are consumers ready for social commerce? Our annual Future Shopper market survey offered the perfect opportunity to find out, so we asked 15,000 digital shoppers in eight countries for their thoughts.
STILL EARLY DAYS
Given the fact that Instagram’s native shopping platform was only launched this year, we should not be surprised that social does not yet register in terms of where consumers are actually spending their money online. What our survey did find, however, is that the social media companies, who have the biggest interest in making social commerce work, still have work to do in raising awareness that it is even a possibility.
When we asked survey participants about their awareness of what social commerce / social purchasing was, just a third (35%) showed any confidence in their understanding of the concept. Female respondents (38%) showed better understanding than their male counterparts (30%).
We also found a sharp discrepancy in the way digital consumers tend to use social media as part of their shopping journeys. A third (32%) said they used social for inspiration right at the very earliest stages of considering a purchase, rising to half (49%) of 16 to 25 year olds and 43% of 25 to 34 year olds. This chimes with social’s well-established role in brand marketing and engagement - young consumers especially are used to learning about brands and products through social media.
When asked about how they search for specific products when they already have an idea about what they want to buy, however, the results were very different. Just 9% of our survey respondents said they used social media for this purpose. Even amongst the youngest ‘Generation Z’ age group, the figure was just 15%.
When you consider that more than half of our shoppers (56%) said they used Amazon alone for product search, it underlines how far social media companies have to go developing their reputation as a commerce destination to be able to compete with the established marketplaces.
SIGNS OF CHANGE
What will be interesting to see is how behaviour around social media changes over the next year or two, especially if more follow Instagram’s lead with native shopping platforms. There was certainly evidence from our survey that things could start to look different in next year’s survey.
One indication is that the habit of making online recommendations of products, either through tagging friends’ names or messaging them links, is even more popular than using social media for inspiration. 38% of our survey respondents said they did this, with Gen Z’ers (49%) and Millenials (46%) again showing the greatest preference. Interestingly, amongst 35 to 44 year olds, a full 11% more said they recommended products in this way than said they used social for inspiration (ie. 42% vs 31%).
As a behaviour strongly associated with social media, brands should be alert to ways they can capitalise on the strength of word-of-mouth recommendations. Shortening paths to conversion, for example by having shoppable links or native purchasing options, is one way to turn more friend tags into buys, simply by making it easier for the consumer. This is one reason why the potential of social commerce should be of great interest to brands.
Finally, we found strong appeal amongst consumers in being able to buy all the products they need from a single platform, with 62% saying this prospect motivated their online habits, rising to 66% of Gen Z’ers and 65% of Millennials. This has undoubtedly influenced the success of Amazon and other marketplaces, but the question is - could social potentially offer a better, even more convenient offer?
The next step in convenience beyond buying everything you need from a single site is buying everything you need from a platform you are already using for other reasons. Social media certainly has the credentials on this score - three quarters of Facebook users and half of Instagram users access their accounts every single day. There are also hints that younger shoppers are less impressed than their older peers with the quality and relevance of content on Amazon and other channels. Asked to rate a variety of channels on 12 different metrics, 16 to 24 year olds ranked Amazon lower than any other age group in 11 of them.
The conclusion has to be, then, that social commerce is not a trend that is likely to transform the balance of power in digital retail in the coming months. Work still needs to be done developing and proving the concept before consumers will start to see their social accounts as genuine shopping destination. But there is evidence, especially amongst younger shoppers, that this shift will be welcomed. Social has the potential to provide the convenience of a complete end-to-end retail experience on sites young shoppers already use for day-to-day interactions by preference, with the ability to shape experiences around content, discovery and personalisation that appeals to their tastes. If you’re a brand or retailer, this is a trend you can ill-afford to ignore.
To understand the value, or should that be the future value, of social media, we need to look at Gen Z, who are increasingly coming to social for inspiration. This means that brands that want to be strong for the upcoming generation of customers need to be strong in social. The unstoppable rise of social and the new rules of engagement is just one of the key challenges for brands that we explore in our new report “Brands and Ecommerce – What the Future Has In Store”.
Written by Chloe Cox
Social Commerce Consultant
Chloe delivers strategic and operational direction for retailers and brands to help them navigate current and future challenges and opportunities. She also takes an active role in promoting the agenda of women in commerce.
A note about the Future Shopper 2019 survey
Research for this Future Shopper 2019 report was conducted by independent research consultancy Censuswide. A total of 15,188 consumers, who shop online at least once a month were surveyed, across 8 international markets, led by UK and US.