Expert Advice: How To Take Advantage Of The Rise Of Social Commerce!
Social commerce is booming as social media platforms become marketplaces for direct purchases. TikTok and Instagram lead the way, allowing one-click buying and live shopping. Fashion retailers can tap into this trend to reach new customers and benefit from a projected $1.2 trillion market by 2025.
What can fashion retailers like you do with this growth? FashionUnited spoke to Jorrit Steinz, founder & CEO of Leiden scaleup ChannelEngine, and here are his insights & tips.
The ecommerce landscape is constantly changing, and social media are now developing into marketplaces. To avoid confusion: social commerce doesn't mean advertisements on social media where a click leads to the website of a brand or company. When it comes to social commerce, the entire order process is completed in the app itself.
For example, TikTok launched TikTok Shop in 2021, similar to its competitor Meta (Facebook & Instagram's parent company). TikTok users can now directly buy an item they come across in the app. In addition, there is a 'live shopping' feature where users can purchase items on live streams, sometimes with exclusive discounts. These services are currently only available in Asia, America, and the United Kingdom, but Steinz says they will quickly become popular in continental Europe too.
Research firm Accenture published a report earlier this year in January predicting that the social commerce market will grow to a $1.2 trillion market by 2025. This is unsurprising, as 44% of the world's population (about 3.5 billion people) uses social media.
Users spend an average of 2.5 hours a day viewing photos and videos on the platforms, so there’s plenty of opportunities for brands to showcase their products and convert users into customers.
Social commerce helps retailers reach new customers
According to Steinz, TikTok and Instagram are the two platforms where social commerce is booming. "A purchase is now possible at the touch of a button. You only have to click on the button in the post or the live stream, and you will be immediately forwarded to the purchase screens on Instagram or TikTok." This ensures that consumers are not distracted because they are not referred to an external website. Moreover, retailers can reach a new target group through these channels, says Steinz.
There are different types of shoppers: focused, inspired, and impulsive. The latter two are the most sensitive to this ease-of-buying phenomenon and are increasingly shifting their online shopping search to social media, confirms Steinz.
"Live commerce, in particular, is doing very well. On these live streams, customers can see how a product really is and ask questions if necessary. They mainly show products that need more explanation. For example, I know a company that sells second-hand handbags from designer brands via live streams. Products from the cosmetics industry also do very well in this area." Steinz underscores that interaction (between the consumer and your brand) is very important. "Especially for young people. They often look for confirmation and can easily find it this way."
Accenture's report also shows that people want to purchase products and services based on recommendations or when they're inspired by people they trust. These can be friends and family, but also communities or influencers.
So, what kind of products do people want to buy via social commerce? Clothing is a huge seller holding 18% of the social commerce market share.
Interested in learning more? Take a detailed look at the benefits & challenges of selling on social media in 2023.
Tips to start selling on social media
Steinz agrees, "The entire fashion range lends itself to social commerce." However, he cautions, "The challenge lies in how you are going to promote it. You have to pay enough attention to social commerce as a channel." Using accurate, industry-specific hashtags is important; working with the right influencers can also push you toward success.
So, what are some things to remember when you start selling on social media?
It's clear that in the future, social media will be transformed into marketplaces that help fashion retailers to reach a new target group. Steinz expects everyone to be used to the phenomenon over the five years.
This article originally appeared on FashionUnited and has been translated from Dutch and lightly edited for clarity.