What is Social Commerce?

• 19 March 2020 | 1098 Views | By Abhinav Mishra

Do you know how much time an average person spends on social media? As per a study conducted recently, an average person is going to spend 5 years of their life on social media which is equivalent to 43,800 hours. The study also says that the numbers are likely to increase in the coming years. So, as a retailer you know where your customers are heading. Social commerce represents a huge opportunity for a retail business. Through social commerce, retailers are changing the way people shop online.

Toady’s customer wants a seamless and quick buying option. Every step that comes between the showcase of the product and the payment processing increases the chance of sales failure. Every click, every page load, and every mouse scroll gives an opportunity to shoppers to not go ahead with the purchase. The social commerce is providing a solution by making easier for customers to interact with product brands and make a purchase.

Social Commerce is a kind of e-commerce that uses online social networks to help in buying and selling of goods and services. The term was first used by Yahoo in 2005 to describe a set of collaborative shopping tools such as user shared pick lists, ratings, and other user-generated content-sharing advice and product information.

The key here is that customers can buy any product within a social app or a website. Prominent examples are Facebook “Shop Now” stores, Instagram “Digital price labels” and Pinterest “Shop the Look”. It is to be noted, social commerce is still in the infancy stage but the early research data is positive. 60% of the online shoppers say that they discovered products on Instagram and one-third of the shoppers say that they would be happy to make a purchase directly on a social media platform.

It is different from social media marketing. With social media marketing, you redirect users to an online store, but in social commerce, you offer them ability to checkout directly within the site network they are using at that moment. At its core, it’s about making it easy for users to complete their purchase and removing the potential for confusion and thus abandonment.

There are 4 features associated with social commerce marketplaces everyone should know:

• The sellers are mostly individual people, not companies.
• The sellers are involved in the creation of a variety of products organized as personalized online stores.
• The sellers have an option to place hyperlinks between their custom-made, personalized stores.
• The sellers are paid commissions on the sales made by their personalized stores.

How to use social media platforms for commerce?

The strategy – You should have a robust social media strategy that can engage users, build relationships and provide them with compelling content.

Automation – Wherever possible, make use of technology to automate your tasks. Having an Omni-channel e-commerce software is a must!

Collaborate – with influencers. You can get a high ROI when an Instagram influencer shares a post with product links.

Content – Create compelling content by providing a mix of product recommendations, practical values, and entertainment.

User relevant products – You get very limited space on social media to show your product, so make sure you chose products that you know will appeal your fans.

Social commerce can be broken down into 7 categories which were given by Lauren Indvik and those categories are as follows:

Social Network driven – Here the sales are results of referrals from social networks like Facebook and Twitter.

Peer-to-peer sales platforms – In this category buyer and seller sells services directly to each other. Examples are eBay and Amazon marketplace.

User-Curated Shopping – It refers to social shopping sites where users create and share lists of goods and services for others to shop from. The best examples of this type of marketplace are Lyst, Svpply, and The Fancy.

Group Buying – If enough purchasers agree to buy something together they are offered at a discounted price, an example being Groupon.

Peer recommendations – These are platforms that aggregate service or product reviews, recommend products based on others’ purchasing history, and/or reward individuals for sharing products and purchases with friends through social networks.

Participatory Commerce – This sales model involves shoppers to participate as much as possible starting from design, selection or funding of the goods they buy. If buyers are involved in the creation of products, they will feel more at home when shopping on a special store or business.

Social Shopping – is a slang phrase for networked shopping. In e-commerce, it refers to consumers who use social networking services and sites to share the latest items they bought, deals, coupons, wish lists, product reviews, and other shopping finds.

If you are still wondering, will social commerce work? Then continue reading to see the benefits of social commerce – 

Consistent Audience growth – There are millions of active users on social media and thousands of new users joining social media every day. Every company looks to reach and target a new audience, and companies using social commerce have an opportunity to increase its followers.

Search Engine ranking – You just don’t get a direct transaction on social media but much more. As per a study, it is a proven fact that social media commerce actually increases traffic to a website which will eventually influence the ranking on search engine results. Sharing links to content on a website through social media is an excellent way to drive traffic from social media users.

Customer loyalty and brand awareness – People use social media networks to stay connected and share information with friends and families and this is how social commerce can help improve customer loyalty and brand awareness. For example, customers have an option to share their purchases with friends. People want to read and write reviews, watch the latest videos on your products, and interact with other customers.

Repeat purchases – With social commerce, you are building relationships. You can maintain those relationships by quickly informing your best customers about new products, special promotions, deep discounts and much more.

The cost – Social commerce is possibly one of the cheapest forms of retail available, the cost involved is very minimal. All that is required is the cost to create and update the social media content, and potentially transaction or hosting fees from the social media platforms.

Top Social Commerce Startups

Here are some top social commerce startups which are creating a buzz in the space:

SimSim – Simsim is a video site that advertises products using influencers. The products are available for purchase along with the videos. Their idea is to replicate the offline retail experience in the digital world with the help of influencers.  Shoppers watch short-videos on the SimSim app in their local language which are posted by influencers trying out dresses or applying beauty products and explaining the pros of the products in detail. Below the video, the items appear for purchase and users can proceed with the purchase with a tap. In less than 8 months of its operation, it has got over a million users, most of them live in small cities and towns and they are selling thousands of items each day. The videos at present are in Hindi, Tamil, Bengali, and English. They plan to add more than a dozen additional languages by the end of the year. The Gurgaon based startup has raised $16 million in less than 8 months of its existence.

21Buttons – 21 Buttons is a social network and fashion marketplace where influencers share shoppable photos of their outfits. Items are directly linked to e-commerce stores. It is based on affiliate partnerships allowing the influencer to take a commission of any sale made. Everyone who signs up can upload and share outfit photos which in turn create a pool of quality user-generated content along with premium content from influencers.

To tag an item, the user can simply select a retailer or e-commerce site where the product is listed to tag the item. The best part is that the items from various brands can be tagged in a single image which makes the shopping experience seamless from a user perspective. For consumers shopping is easier, quicker, and more realistic, allowing consumers to cherry-pick from multiple brands. It feels like 21 Buttons is borrowing the best of its competitor platforms. Along with its own USP, there is a lot to draw in users.

TrendBrew – Their idea is ‘Break away from the hassle of downloading hundreds of retailer apps’. TrendBrew has created a unique product & content aggregation platform that allows users to shop thousands of retailers from one app. They have some amazing features like price comparison, price drop alerts, universal rewards, and influence commissions. On TrendBrew, influencers can monetize their blogs, videos, and pictures.

How? By linking them to relevant products and then influencing their purchases. It has over 1.5 million influencers and seven thousand retailers with an outreach to 50 million followers through well-established partnered networks such as Girl Crush Collective, Mom Blogger Club, Find Your Influence, and Bloggy Moms.

Mall91 – Mall91 is a vernacular social commerce platform that combines live videos-based shopping, Whatsapp-like chat-based checkouts, and local language voice recognition-based catalogue. It has already reached 2,000 towns and villages of India by enabling their life’s first e-commerce transaction. Its unique approach of offering additional high engagement, more content, high-frequency use cases around gaming, payments are resulting in Mall91 becoming a daily first screen app for rural India. It combines the principle of enabling commerce through mediums that small town users understand like – voice, video and messaging. Mall91 is available in many Indian languages – Hindi, Tamil, Telegu, Gujarati, Bengali, Kannada, Malayalam and Marathi.

How it works is really simple – A user clicks on a mic icon in the app which greets the user and asks what they want to know. Users can ask a “shopping query” and voice AI automatically understands the local language and converts it into shopping search results as if she is speaking to a shopkeeper. Users can complete the order by clicking ‘buy now on chat’, which opens up messaging AI experience to start chatting with the user to take the name, phone, address, and payment mode.

The shopping habits of consumers changes with time. Today’s consumers are looking for synergy between social and physical shopping. They want to save time and also experience their shopping experiences at best. Since social commerce combines both of these factors, the idea here is to stay and grow. Even though the likes of Facebook and Twitter are in this space but as of now no one has cracked it. There is still a lot to come and maybe one of the above startups will become Google of Social Commerce in the coming years.