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Will social shopping even the e-commerce playing field?
A new study predicts social commerce growth will spike in the years ahead and represent a “democratizing force,” opening up opportunities online for individuals and small businesses.
“Any brand, large or small, can sell via social commerce, and any individual can now become or create a ‘brand’ of their own and reach a market directly,” said Accenture in the study “This has hugely positive implications for small businesses and entrepreneurs as they are able to reach potentially massive markets that were simply not available to them before.”
Social commerce, according to Accenture, engages in three principal ways, via brands, influencers or individuals themselves:
- Content-driven: Via shoppable posts and in-app stores on Pinterest, YouTube, TikTok, Instagram and other platforms, unique content created by brands, influencers or individuals drives “authentic discovery, engagement and action.”
- Experience-driven: These channels enable shopping within an overall experience, most commonly livestreaming, but could also include AR/VR experiences or gaming.
- Network-driven: People are harnessing their existing social networks to buy and/or sell. That could involve community buying to procure bulk discounts — a model used by Pinduoduo, a mobile-only marketplace that connects millions of agricultural producers with consumers across China. Or individuals using their social influence and network to drive sales and earn commissions.
Smaller sellers are also attractive to social commerce buyers. Among social buyers surveyed, 59 percent are more likely to support small and medium-sized businesses through social commerce than when shopping through ecommerce websites.
“The math is changing dramatically,” Accenture wrote. “Rather than a handful of big retailers and brands selling to mass markets of millions, we’re now seeing millions of individuals and smaller businesses selling to one another within a vast social commerce ecosystem.”
Oliver Wright, global Consumer Goods and Services lead at Accenture, said in a statement, “Social commerce is a levelling force that is driven by the creativity, ingenuity and power of people. It empowers smaller brands and individuals and makes big brands reevaluate their relevance for a marketplace of millions of individuals.”
Discussion Questions
DISCUSSION QUESTIONS: Do you see social commerce significantly empowering small businesses and individuals to sell online? What advantages, if any, might smaller creators, resellers and brands have in engaging directly with consumers through social platforms?
Poll
Loading …BrainTrust
Rachelle King
Retail Industry Thought Leader
Georganne Bender
Principal, KIZER & BENDER Speaking
This is the new “shop local” presentation, and opens the door to greater creativity and innovation. Relevance is king in the social media world and local is about as relevant as it gets. It’s a game-changer for retail.
I could not agree more that livestreaming and social commerce will be a significant trend throughout 2022. Retail store associates are truly brand ambassadors, and as the representatives of the brands they serve, who better to lead the livestreaming content creation? Especially as the workforce will be dominated by both the Millennials and Gen Z segments, where social media content is so intuitive and second nature to them.
Larger retailers such as The Home Depot and Walmart have already experimented with livestreaming and selling via social channels. Eventually, mid-sized and indie retailers will be joining this movement. The key to livestreaming success as a viable selling strategy is incentivizing the store associates with defined career paths, clearly outlined job descriptions, appropriate compensation plans, and other benefits befitting a brand ambassador.
This is the newest retail pillar in shopping. I expect it to continue to grow as more retailers discover the chance to reach more consumers to tell them about the products they sell.
I have long been fascinated by the Pinduoduo market in China, and believe that I the social commerce model that has the greatest long-term potential to scale. Content-driven social commerce, while extremely lucrative for the likes of Charlie D’Amelio, who leverages her 130 million TikTok followers to earn over $17M USD a year, will still be limited by an individual (or a company’s) ability to wield influence and gain followers. Network-driven commerce like Pinduoduo matches products to consumers and delivers a much stronger two-way value proposition.
The “Shop Local” mantra will come to life via social commerce and livestreaming this year by small retailers looking grow their customer engagement. While large brands will also embrace this approach with production-heavy techniques, smaller retailers will leverage an important advantage — the authenticity of their frontline store associates as the livestream influencer. Who better to promote their store merchandise than the associates trained to sell them in the store? For many retailers, these frontline employees will already have relevant skillsets and expertise in livestreaming, YouTube, social media, etc. These retailers will let the store associates build a following for them and engage with customers via livestream.
I spoke about this in the latest episode of my Retail Razor podcast as I predict we’ll see an explosion of this throughout 2022 and the most momentum will come from small to midsize retailers!
Social shopping will grow and become a force to reckon with. Technology has evolved where anyone on the planet can leverage easy to use tools to access millions of consumers. Calling all entrepreneurs with creativity, passion and zest for uniqueness … the world is waiting for you!
Social shopping has already leveled the playing field. Its what kept our independent retail clients alive during the pandemic when everything was shut down. Those who kept it going have reaped incredible benefits, some with substantial online sales that continue to be strong to this day. Their stores have become fulfillment centers as well as retail selling space.
The downside for an indie retailer is the time it takes to coordinate a weeks worth of offerings — the most successful go live daily — and camera fatigue. They found pretty quickly that you can’t do it alone. And then there is shipping, promotions, games and giveaways, all the things consumers expect, that need to be added weekly to keep things fresh. But it works. Little stores all over America are now selling nationwide. Meta may do a lot of things that drive us all crazy but it got Facebook Live right.
Social shopping will not only even the e-commerce playing field, it will level set sales opportunities for local retailers in line with national retailers. However, the question now is how will these retailers translate social shopping opportunities into their physical environment? The expanded consumer base these local retailers find within e-commerce may still be missing some key pieces of the overall experience. How they handle missing the touch and smell components of their products could lend to their overall success making social shopping not a trend but a new way of shopping and interacting with the brand.
Social Commerce is a game changer. The time when retailers were the only gateway to commerce is over. Today, individuals and small businesses can set up shop online in a matter of minutes. While they may not have resources and scale of major brands and retailers, they are chipping away at share-of-mind. It’s a new day for commerce. Those used to placating to traditional retail channels have a new kind of go-to-market empowerment. How smartly social commerce will be leveraged to significantly impact brands, individuals and consumers is still unfolding.
I always have to smile when surveys indicate that most people will “do the right thing.” Of course, they answer that way. In this case, “59 percent are more likely to support small and medium-sized businesses through social commerce than when shopping through ecommerce websites.” Not support the big bad guys like Amazon, Target, or Walmart.
But, like shopping locally or even yes, my actions are environmentally positive, what is the reality of the behavior?
This is definitely a wave worth riding. Engaging with consumers when, where, and how they desire it is crucial … and social platforms make all the sense in the world. What are retailers waiting for?
I absolutely see social shopping growing and evolving. Much like any new evolution, it takes time for consumers and retailers to adapt and figure out how to maximize the technology. I remember when the web was treated like a digital catalog and how facebook and social ads were used like print. I expect a learning curve as sellers figure our the ROI model and how to allocate time and resources to drive success in frequent small bursts. We are used to macro selling, so this micro selling trend will take time to be fully realized.
Social commerce is just the beginning. We’ll be able to purchase products from many new channels. Open-minded retailers who are technology-friendly will reap the rewards.
No. How does social commerce sell your lunch or gas orders online? It can help promote and communicate your products (when marketed and positioned correctly), but not physically sell a product that must come from your restaurant or gas station or QSR. Using social platforms to promote compared to direct consumer engagement and selling is really a wide chasm of difference. This is why social shopping won’t even the e-commerce playing field.
For both large and small retailers, social commerce is a critical component to reach customers. Choice paralysis/analysis paralysis is a serious problem for customers these days. With innumerable products to choose from, customers want something or someone that will help them cut through the noise and make a purchase decision. Live streaming and influencer marketing is the best way to avail this capability to customers. They help enable digital dialog, identify customer needs, and deliver personalized experiences at the heart of digital touchpoints.
Moreover, customers have a stronger relationship with social media communities and influencers than with retailers. One of the reasons for this is that influencers and communities are easily accessible and interactable. Since trust is the major factor between influencers, influencers have to act responsibly and promote products that will actually best suit the needs of the customers. Which in turn, helps boost businesses’ goodwill and makes social commerce a vital part of brand strategy.