A couple of years ago, we used social media to connect with friends and family. From there, it jumped to a brand-focused platform that allowed you to search and discover new products. Today, you can complete the entire shopping experience right on social as you scroll through your feeds. Talk about hyper-convenience!
Records show that social commerce is exactly what modern shoppers want in their lives. In 2020, the global social commerce market earned $89.4 billion, with the United States market picking up $26.9 billion in total. The growth is even projected to reach a whopping $604.5 billion by 2027, growing at a compound annual growth rate (CAGR) of 31.4% over the analysis period 2020-2027.
As a result, brands that traditionally used social media as a marketing tool to reach, connect, engage, and build relationships with existing and potential customers have taken the leap to offer direct purchases on social platforms.
A Statista’s survey found that nearly eight out of 10 American businesses anticipated selling on social media commerce platforms in the next three years. With 57% of small businesses already selling through social media, and 71% of others planning to join the social commerce train within the following 36 months.
Social media platforms are lending a helping hand
Small to medium-sized businesses (SMBs) are just as keen as large retailers to maximize online sales via social networks. And, the social media platforms are doing their part in helping out businesses win over shoppers by designing algorithms that detect user preferences and provide personalized recommendations. The leading social platforms that brands are using are:
With over 2 billion users across the globe, Facebook is the most popular social network. From a business perspective, 200 million businesses, mostly small businesses, are using the platform to reach their customers. According to an eMarketer report, Facebook is the number one social commerce platform in the US, with a total of 22.3% of US internet users, or 56.1 million people ages 14 and older expected to make at least one purchase on Facebook before 2021 wraps up.
In 2020, the platform launched Facebook Shops, a social commerce tool that allows SMBs to create social stores for free. This means Facebook users can browse, explore and purchase products directly on FB without leaving the app.
As of 2020, Instagram (IG) has 1 billion users. That’s half of its sister brand's following, Facebook. IG has come a long way from just a photo-sharing platform to becoming one of social commerce top’s players. The same eMarketer report (above) reveals that Instagram follows behind Facebook, with 12.9% of internet users, or 32.4 million people expected to make a purchase on the platform.
Instagram Shop has the functionalities of Facebook Shops, designed to help people to discover and shop the brands and products they love.
“With our commerce tools, we've made it so that a business can set up a shop once, and then they'll have an online storefront in both Facebook and Instagram immediately. And, we expanded checkout to all US businesses, making the process of buying a lot more seamless,” said Facebook Inc’s Deborah Crawford.
Barely five years in, and the new kid on the social block is soaring as one of the fastest-growing apps all over the world. With an estimated 65.9 million monthly active users in the United States alone, TikTok is collecting global phenomenon status. This short-video-sharing app has the attention of the younger generation who are keen on lip-syncing and dancing in an effort to entertain and go viral.
To add to the excitement, the TikTok and Shopify partnership birthed "TikTok Shopping." This marks a new beginning for Shopify merchants that have TikTok For Business. Now, they can add a shopping tab to their profiles and sync their product catalogs to create a mini-storefront that links directly to their online store for checkout. “TikTok is uniquely placed at the center of content and commerce, and these new solutions make it even easier for businesses of all sizes to create engaging content that drives consumers directly to the digital point of purchase. We're thrilled to be expanding our partnership with Shopify and making TikTok more accessible than ever for their merchants," said TikTok’s Blake Chandlee.
But are brands making sales on these platforms?
While the possibilities are endless in the ever-growing social commerce space, is it worth your time and effort to even consider joining the s-commerce revolution?
The brands that are collecting sales are proof that you should.
Ximba, A US direct-to-consumer (DTC) brand that sells whitening strips made with natural and reduced-sensitivity ingredients, tested Facebook Shops to attract shoppers, boost brand awareness, and increase online sales. The brand set up its social storefront for prospects to discover, browse, and shop its products on Facebook and Instagram. With Facebook Shops, customers have the chance to message Zimba through Messenger or Instagram Direct Message (DM) to ask questions, get support, track deliveries, and more. After onboarding Facebook Shops over the period of July 1‒August 31, 2020, Zimba’s results showed;
- 1,200 incremental orders from Shops
- 6.7% greater average order value from buyers who purchased via Shops compared to those who bought on the website
Another company, MVMT Watches, which offers high-quality watches for a fraction of what high-end pieces cost, experimented with Facebook Shops. They set it up, and the results revealed:
- 1,500 people visited MVMT’s Facebook Shop in a week
- More than 60,000 users visited the shop in a 90-day period
- The .5% conversion rate has resulted in more than $15,000 in revenue MVMT might otherwise not have gotten
“This is a very similar conversion rate to what we saw at the beginning of the shift to mobile. Our mobile conversion rate more than doubled as people got comfortable purchasing from their phones, and we think the potential for growth on our Facebook Shop is similar as people become more familiar with the platform,” said MVMT’s Stumbaugh Pinsker. In addition to that, the brand emphasizes that social selling relates to the product mix. “75% of the revenue generated from the Facebook shop came from the three products prominently displayed there. So, it's really important to put your best selling products upfront as the Facebook Shop is generating a lot of interest,” added Pinsker.
TikTok, on the other hand, has only just dipped its toes in social commerce by piloting its new TikTok Shopping in the US and UK. The checkout takes place through Shopify, and, according to Shopify, “there’s a growing demand among merchants for working with TikTok, noting installs across Shopify’s social commerce channels increased by 76% from February 2020 to February 2021.”
In 2020, Levi’s was one of the first retailers to use TikTok’s “Shop Now” buttons, which allow customers to make purchases through links posted to TikTok. The results from that implementation led to Levi’s receiving high engagement and increased traffic to its website. This clearly indicates how much potential there is to come, as the expansion of TikTok Shopping rolls out to other parts of the world.
Maximize your social commerce success with a PIM tool
Social commerce is opening up tons of opportunities for SMBs to grow. But while social organizations are doing their part in lifting up the small guys, there’s a critical aspect that they can’t help you with. That's, of course, product information and its management thereof. By now, you know that product information can make or break the success of selling online. Considering that you’re looking to gain awareness, traffic, engagement, and sales, it’s in your best interest to ensure that you deliver rich content that will lead you to your goals. So, alongside the best social commerce tools, you need a product data tool that’s designed to help you get in front of the right customers, at the right time, and on the right platforms.
We’re referring to a Product Information Management (PIM) software, also called a product content management system. A PIM enables you to create high-quality content and optimize it in a way that will resonate with your socially savvy customers. Plytix PIM, specifically, makes sure that selling on social media - or anywhere else for that matter - doesn’t have to be hard or time-consuming.
With our PIM, you can create, enrich, and optimize your product content and then share on your Facebook Shops, Instagram Shops, and TikTok through Shopify.
Want to see how? Book a demo with our sales team!