Social Commerce: Redirecting Retail Into The Future
What is the biggest upside to marketing (and now selling) on social media? Everybody is right here, scrolling through their feeds, ready to engage with content and get influenced by it. Add in your products to the mix and there you have it, a complete ecosystem of its own – a brand’s entire funnel from discovery and interest building to complete purchases. Everything is in one place without redirection, making it a smooth, simplified experience for buyers.
Smoother retail experience
Breaking it down, social commerce simply means marketing through connections and engagement, tapping into and harnessing the social network of a brand's associates. While some strategies include dedicated social commerce applications and platforms, others make use of popular social media networks.
Thanks to the fact that communication is led by a person they trust/know/follow, the audience has a sense of security and trust which is supported by reviews, discussions and user experience stories being more accessible. All this information helps consumers make informed purchase decisions that they feel more confident about.
Adding value to the mix
Influencers, individuals, and brands are three primary pillars of social commerce. A report by digital marketing agency WATConsult indicates there are 157 million consumers in India. Social commerce helps in creating awareness around brands in a whole new way. The new concept of social commerce has simplified shopping experiences making them more engaging when compared to other social media experiences.
A report by Money control quoted retailers saying that about 40% of sales during the lockdown period in India happened on WhatsApp. Digitally active Indians, as per a Bain & Company survey spend over three hours per day online on average. Of this, about two hours are spent on texting, social media networking, and watching videos. It also says that social commerce in India, which is a $1.5 to $2 billion Gross Merchandise Value (GMV) market, has the potential to grow to $16 to $20 billion in just five years and $60 to $70 billion GMV by 2030.
As social commerce demographics are concerned, it engages with a younger consumer base (within the age group of 25 and 44) and as for communication strategy, the brand’s direct communication takes a backseat as the views and interests of peers/fellow customers get preference.
Unlocking Potential
In India, the growth in the social commerce segment is being driven primarily by Tier-II city audiences on dedicated social commerce applications. As platforms like Instagram, Facebook, and Pinterest disrupt the social media space, they are also triggering potential growth opportunities for customers from Tier 1 cities who have greater spending power. Brands are leaving no stone unturned in achieving this. For instance, they are using Instagram to build a strong brand with enticing content, visual stores, customer testimonials, or influencer-led campaigns. Facebook on the other hand has proved to be a great example of demonstrating multiple categories of social commerce via in-app buying through the Facebook shop and user/influencer-led selling on its marketplace. The social media platform is the largest player, as an April 2021 study by market research company, e-Marketer quoted that more than two in three people who use Facebook use it exclusively on their mobile phones in the US. For Amazon Store-fronts and Pinterest, the focus is on influencers and content respectively.
With their significant follower base, influencers create content and recommend products on e-marketplaces to get paid every time the platform registers a successful sale via their store. For Pinterest, it is the user intent that sets it apart from the rest as it primarily focuses more on content than the publisher. Pinterest is becoming a powerful social commerce platform thanks to the CTA options it provides to publishers.
With social commerce picking up, the India Brand Equity Foundation indicates that the number of native social commerce shoppers could touch 228 million this year, marking a 45 per cent increase. Brands on their part have been able to create a robust presence and pinpoint which social media platform their audience is.
So, if clothing and accessories, electronics, home furnishing, self-grooming, and baby products do well on Facebook and Instagram, market trends show customers going in for apparel and accessories, homecare, healthcare products, electronics, and home decor furnishing. Social commerce on Pinterest is more about outdoor sports accessories, jewellery, bags, shoes, and clothes.
Eventually, with all the data in place, projections going strong, and customers enjoying social commerce on their mobile phones, all that it leaves the sellers to focus on is a strategy that puts the brand and products first with a content-based approach. A game plan that lets your consumer directly purchase a product on a social media platform without having to exit the platform.
*The author is Ankur Dayal, CEO & Co-founder of Primarc Pecan
