2019 Retail Tech Trends: social commerce

‘Social commerce’ has long been an industry buzzword, but it’s only recently the concept has gained true traction. While the rise of Gen Z has contributed to this, developments in mobile and social technology have also been huge enablers. You can now purchase third-party products direct through Twitter without ever leaving the site, while Instagram has introduced buy buttons to their product-centric ‘Shoppable Stories’. Facebook is even testing augmented reality ads in Messenger.

Furthermore, as the world of eCommerce leans further towards mobile, digitally native online brands are increasingly building their businesses around social- and community-centric models. From sneaker culture blog-turned-fashion brand Hypebeast to community-driven beauty seller Glossier, the message is clear: while your website will always be a vital platform for driving brand loyalty, awareness and conversion, selling to customers where they are (via social channels) is increasingly an opportunity retailers can’t afford to miss.

Social commerce is more than a trend

The rise of social commerce is the result of big changes in the way we consume media. Top of the list is the continuing increase in mobile traffic worldwide. A recent Ofcom report revealed the UK online population currently spends twice as much time browsing the net on mobile as it does on desktop. In the US, that multiplier rises to 3x. Meanwhile, social media penetration via smartphones now soundly trumps desktop in most countries, with 84% of the UK online population accessing Facebook on their mobiles.

Leading the charge on these developments is Gen Z. According to a report from Global Web Index, 96% of this demographic own smartphones, while 73% have bought a product online via mobile in the last month. This is also a segment primed for social media marketing. According to the Global Web Index, four in 10 Gen Zers follow brands they admire online, while a quarter of this demographic follows brands they are considering buying from.

For this reason, influencer marketing targeting this group proves a particularly fruitful investment: the 2017 Kantar Millward Brown AdReaction study reveals that Gen Z is much more receptive to content featuring celebrities than other demographics. With marketers seeing an average ROI of $7.65 to the dollar spent on influencer marketing, it’s clear that this new form of advertising is an effective way for brands to reach young audiences.

This shift in consumer behaviour has given rise to a new breed of e-tailer, combining social and mobile to target a younger, more engaged audience. Many of these ‘new gen’ brands operate primarily out of mobile apps – for example, Chinese share-and-buy platform Little Red Book, or LIKEtoKNOW.it, which allows consumers to shop products from screenshots of social media or influencer content.

But what does this all mean, long-term? With mobile usage increasing and Gen Z maturing as consumers over the next 10 years, the demand for social and content-heavy commerce is only going to grow.

Social platforms work hard for your brand

With the introduction of features like Shoppable Stories and purchasing functionality, the big social media platforms now offer a credible additional channel for brands to drive sales. However, the benefits of a strong social-centric strategy go beyond sales:

1. Information

It’s well-established that social platforms are a powerful source of behavioural data, enabling brands to reach audiences that they might not otherwise, and to build a more detailed, nuanced picture of their target customers’ interests and preferences.

And, as these platforms seek to further monetise their users, the level of insight they’re offering to brands is growing more sophisticated. The recent data partnership between Snapchat and Nielsen, for example, offers advertisers increasingly precise audience segmentation for consumer packaged goods, retail, travel and finance campaigns among others. 

Of course, this ability can prove a double-edged sword; in the wake of Facebook’s data scandals just this year, marketers are under more pressure than ever before to handle data ethically. Still, with sensitivity and awareness, intelligent analysis of consumer data can empower brands to serve personalised, relevant content, enhancing their customer value proposition and, in the long term, engagement on all levels.

2. Loyalty

Making social media integral to your content strategy has clear benefits in terms of driving brand advocacy and repeat custom, particularly among younger segments. While 17% of Gen Zers say that they would promote their favourite brand if they had access to exclusive content or services, 20% would do the same if something was relevant to their friends’ interests, and 21% would do so if they felt like they were actively taking part in something. 

One brand that has demonstrated the benefits of a social-first approach is Glossier. Originating with a blog, Into the Gloss, the four-year-old beauty start-up landed $52 million in series C funding earlier this year, at a valuation of $390 million. Its secret? A strategy that relies on integrated content and social media to drive sales. After discovering that visitors to the blog were 40% more likely to convert than browsers who visited the online shop alone, the brand prioritised growing its readership. Through careful deployment of tailored content and social media, Glossier actively converted browsers into advocates – and readers into buyers.