Social commerce is a $89.4 billion market right now. It’s projected to grow to $604.5 billion in the next seven years. eMarketer predicts social commerce will rise by 34.8% to $36.09 billion in 2021 alone.
Mark Hook is the VP of Global Brand, PR and Communications for Brightpearl.
It’s increasingly clear that consumers are discovering and purchasing products directly via social media channels. Social is becoming a primary research tool for shoppers with many channels, including Instagram, acting as discovery engines for brands. According to Instagram, 60% of people discover new products on their platform and users say that when they were inspired by something they saw, they would take steps to find and buy it straight away.
However, a staggering number of retailers are overlooking social media for ecommerce. According to Brightpearl’s own data of 4,000 shoppers, a quarter of retailers still do not have options for shoppers to buy via social channels, including some of the largest brands. Very few businesses facilitate non-traditional ways of shopping like Instagram, Pinterest and livestream, and there isn’t much urgency to change.
That’s a major mistake. Our research suggests shoppers are looking to the digital channels that they already use to socialize and access entertainment. With consumers leading the way in these new behaviors, retailers need to meet customers where they are. In fact, they may need to use a whole host of different social commerce options for various age cohorts – and be able to swap these out as needed.
Gen Z consumers, in particular, want to buy online in a variety of new ways – via voice, livestream and social media apps like Pinterest, Tik Tok and Instagram. They love social commerce because it combines entertainment and shopping – much like traditional shopping centers do. They’re ready to shop as they scroll and the data supports this: three-quarters of 18-24s plan to shop via alternative channels this year, and the same number want retailers to make non-traditional channels easier to shop through in the future, according to Brightpearl’s study.
It’s not just the ‘youth’ market either, 48% of U.S. internet users 18-34 made a purchase on social media in 2019 – a number that is only set to grow, with the rapid growth in e-commerce, and emerging channels ready to explode into social selling.
It’s clear this is not only a short-term trend. By not embracing new social media shopping channels, retailers are effectively leaving money on the table.
Adopting Social Commerce
The opportunities brought by social commerce are clear - but what about the risks?
The complexities involved in adding and then managing multiple new social selling channels — while delivering a joined up and consistent experience for customers — is going to be a growing challenge.
The proliferation of new digital channels has caused a fragmentation among shoppers – often along generational lines – that demands a more flexible approach from retailers. Complete visibility across all channels, and the ability to quickly adjust to sudden changes from internal or external environments, are essential.
Infrastructure is an important consideration, too. There’s little point in trying to add multiple sales channels without the right technology infrastructure in place. Too many brands rely on classic ERPs but the truth is that these aging systems can’t cope with the speed and agility required to meet the expectations of modern consumers. If you use an ERP and your customers start flocking to a new social media channel, such as TikTok, you’ll be waiting months or even years to integrate it as a commerce channel. But your competitors won’t.
This reliance on dated and inflexible backend technology, combined with low adoption of new digital channels, suggests many merchants haven’t realized we have entered a new era of hyper-scalable commerce that requires new ways of thinking.
To truly succeed with social commerce, brands will need dynamic, hyper-scalable systems that allow them to manage an ever-changing roster of social applications at rapid pace. The desire for consumers to be able to ‘buy wherever they are’ will inevitably unearth operational complexities; but with the right retail operating system it needn’t be intimidating.
For those who are willing to adapt to the emergence of new digital channels, there’s perhaps never been a more exciting time to be in business.
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