Social commerce is a $89.4 billion market right now and it’s projected to grow to $604.5 billion in just the next seven years. With such an easy way to enter the market, it’s an invaluable resource to incorporate into your business.
Not only is it easy for your business to access and utilize, a large, all-encompassing age demographic participates in the use of social commerce. Moreso than other statistics that evaluate age demographics for other virtual industries, social commerce has a very broad user base. According to Statista.com, as of October 2019, it was found that in U.S. alone, 47% of internet users aged 18-34 years old had purchases an item online through social commerce. This was a considerable increase from just December of 2018, where the percentage of users was 33%, and with the impact of COVID-19, the demand for easily accessible virtual shopping options has risen considerably.
With numbers like these, everyone is trying to stake out their claim of the social commerce world— But how do we define social commerce? How does it work? And why has it become so popular?
What exactly is social commerce?
Social commerce combines eCommerce with the native social media experience by allowing users to purchase products directly from a third-party company while using the social platform. Take an Instagram user for example: If this particular user was looking at cookware from Great Jones and scrolling through the company’s feed, the user could find an item they liked, tap the post to view the products featured in the photograph, and purchase the product directly through Instagram’s Shopping feature.
Instagram is just one of a dozen different platforms utilizing social commerce, but according to Cxl.com, 70% of shopping enthusiasts turn to Instagram for product discovery. As the social commerce market continues to grow, it’s important to be conscious of the platforms that are dominating the social commerce space: Facebook, Instagram, and Pinterest.
By utilizing social commerce on these platforms specifically, you can increase brand awareness, audience engagement, and inevitably, overall revenue for your business— And it isn’t hard to get started on Facebook, Instagram, or Pinterest. It is free to sign up for an account on all three of these platforms; it's even free to switch over from a regular account to a business one so you have analytics and other essential tools at your disposal.
So which platform should you use? What’s the difference between them?
While all three platforms have their individual benefits, what is most important to your business is understanding how they compare to each other.
In a study conducted by BrandWatch, it was estimated that on average, Instagram users engage 10 times more than on Facebook; 54 times more than on Pinterest and 84 times more than on Twitter. Similarly, orders referred from Instagram are about $10 larger than those from Facebook. This is speculated to be the result of ease of access and overall higher engagement on Instagram.
So, it is easy to say that out of the three platforms, Instagram seems to perform the best. However, Facebook and Pinterest shouldn’t be shrugged at.
According to Metrilo, Pinterest’s “Buy it” button can reach 2 million targeted users of the platform, and pins are typically repinned 11 times on average. And with Pinterest’s new visual search option, it is even easier to find items that you wish to purchase through the application. Though, because Pinterest’s demographics tend to be a specific group of people (usually affluent women), this means it isn’t always the right choice for every business.
This is where a Facebook store becomes a viable option. Sharing your content is incredibly easy and reaching your intended audience is even easier, as those seeing your shop are likely already following your business’ page. If you intend to display a large number of products, Facebook store is a beneficial choice because of its product catalogue. With the product catalogue, you can list products with title, price, description, images, and even your inventory directly in the shop. This way, eCommerce becomes easily manageable.
Why is social commerce so popular?
Offline shopping is an inherently social experience. When we usually think of offline shopping, malls and outlet stores tend to come to mind. By physically going to these locations, we enter into social spheres and oftentimes, we do so with friends or family members. But when you shop online, you lose those elements of social experience as it is just you and a computer or a phone.
Social commerce is, quite literally, putting the social aspect back into eCommerce. By providing consumers with the ability to shop on social media platforms, they are more inclined to share products they see with other users which in turn generates conversation around the product and the business it belongs to. In fact, 74% of consumers rely on social networks to guide their purchase decisions. With this kind of statistic, it becomes exceedingly clear as to why social commerce is so successful and why your company should invest in it.
While it is uncertain as to whether or not social shopping will completely replace the traditional route of going directly to the merchant site, one thing is for certain: social shopping and eCommerce is here to stay and the data it is generating is certainly positive.