Social commerce: the next big thing in payments?
Originally published in CXOtoday.com, 12 December 2017
As of today, Facebook hosts 2 billion monthly active users, Whatsapp has made inroads to over 1.2 billion, while nearly 700 million are active on Instagram, and the Twitter bird has caught the fancy of over 328 million users. The growing world of Social Commerce allows brands of today to turn this colossal number of monthly active users into loyal customers, and as of yet, we have merely touched the tip of the iceberg!
As a subset of e-commerce, Social Commerce facilitates online selling via typical social media behaviour, involving interactions & contributions from users. In fact, social media can be used for becoming friends with strangers who share interests or are passionate about the same things. Thereafter, the friends can be converted into customers. Upon successful completion and as the friendship gets deeper, these customers turn in salespeople, getting their other friends or family members to buy products or services that you are providing.
Younger Generation is driving the Social Commerce Revolution
Demand for Social Commerce actually originates from the users of today. In fact, the “younger generation,” so to speak, has demonstrated a higher proclivity towards buying via social media. The study conducted by Marketing Week revealed poignant insights into this burgeoning trend. It was observed that nearly 33% of users aged between 18 and 24 like purchasing directly from Facebook, while 20% prefer Twitter and 27%, Instagram. Users aged between 25 and 34 were still catching up to the new trend, with 30% interested in buying on Facebook. Lastly and quite un-shockingly, the elderly generation aged between 54 and 65 didn’t appear quite interested in social media, with only 10% voting in the favour of the same.
However, brands or online merchants focused on the younger generation, more specifically the millennial generation, and the younger lot of baby boomers, would have interesting takeaways from this finding. With 900 million millennials in India and others gradually on-boarding the paradigm shift in online buying, Social Commerce offers exceptional opportunities for brands and a growing number of online merchants.
Brands need to embrace Social Selling
We need to understand the fact that despite the emergence of online marketplaces, shopping is still inherently a social experience. The purchases are made after consulting a few close friends or family members. Social Commerce allows for the same collaborative process to happen online, utilizing the increasing adoption of smartphones and social media platforms. Instead of having to lure customers into coming and buying from yet another ecommerce portal, social commerce helps brands be available where their customers are – on the biggest social networks across the globe.
In fact, industry pundits unanimously are of the opinion that Social Commerce marks the future of e-commerce. 2016 witnessed the coming of age of Social Commerce in the context of everyday transactions. The same impacted the sales as well, with nearly USD 50 billion sales being generated via social networks, marking an increase of USD 20 billion, as compared to 2014. In 2017, more than 60% of marketers perceived social media as the fastest growing trend, as per MindShift. To tap into the burgeoning potential of Social Commerce, various sites popular social networks like Twitter, Pinterest, Facebook and Instagram have come up with several features enabling social commerce.
A Word of Advice before Setting Sail
If you do decide to join the bandwagon of social commerce, you need to be aware of certain aspects. To begin with, it is important for you to understand where your target audience are – what are THE social networks they prefer. If you can specifically pinpoint, let’s say Facebook or Instagram as the go-to channel for your customers, you are sorted; otherwise it is time for you to do some qualitative or quantitative research. Understanding your target audience, how they behave on social networks, what they prefer and don’t etc, will come handy in adding another stream of revenue to your business via social commerce.
However, do remember that social commerce is, at the end of the day, a social platform. While the business demands for you close more sales, you need to make the entire process rather interactive and social. Don’t barrage your audiences with a lot of product information. Prepare a smarter inventory; in fact, engage with your audiences on social media and ask them to VOTE for their favourite product- boost the reach of the most popular products with sponsored posts or digital campaigns. Be part of the conversations happening around your brand or in communities frequented by your target groups, promote peer reviews as they are known to boost sales. Lastly, always be true to the image of the brand that you have created and instead of volleying one sale pitch after another, talk to your audiences on social media.