Since the inception of digital commerce in the 1990s, companies have evolved from building simple e-commerce sites to creating complex omnichannel solutions and marketplace ecosystems that improve customer engagement and increase revenue streams, conversion and return on ad spend. The latest evolution is social commerce, also referred to as discovery commerce, an emerging digital sales channel that allows social media users to explore products and make purchases through social media platforms such as Facebook, Instagram, WhatsApp, TikTok, YouTube, Snapchat, Pinterest and Twitter.
This has elevated brands’ presence on social media from simply posting content to building an end-to-end (E2E) condensed sales funnel — reducing the time between when consumers discover a product and when they buy it. That can help address the coming changes with browsers allowing cookies while also dealing with a growing number of global privacy regulations. But many companies don’t fully understand how to build successful social commerce capabilities. To take advantage of this condensed funnel, you may need to make changes in your organizational, business and technology choices.
Brands can now post products on social media platforms, and, in some cases, consumers can complete transactions on those platforms. On others, the user is guided to the brand’s website to make a purchase. This added simplicity encourages consumers to “buy now,” which increases sellers’ revenue.
Social commerce is creating rapid growth worldwide, giving proactive companies an opportunity to achieve meaningful return on investment — if they know how to deploy social commerce successfully.
There’s a two-sided benefit to adopting social commerce. The first is that it offers engaging and convenient experiences, which consumers prefer. The second is the E2E clear view of the sales channel — from product discovery to checkout. Social commerce platforms also enable brands to collect more data, enabling them to make data-based decisions about the entirety of the sales funnel. Leveraging these insights helps brands understand users’ behaviors and generate ideas for products and services.
How can your brand transform an established social media presence into a successful social commerce channel? While full reinvention may not be necessary, you should anticipate making changes in multiple parts of your organization. With social commerce, the following two drivers lead to the need to reevaluate how you are organized and how different functions work together:
This requires establishing close collaboration among departments, training initiatives and new ways of working.
Bringing the following business functions together can help achieve a winning social commerce endeavor.
Consumers can engage in social commerce with a brand in different ways
Social media debuted decades ago as a platform to raise awareness by posting highly stylized and visually appealing posts that are similar to an advertisement in a magazine. Social commerce expands beyond driving brand awareness and traffic to produce focused posts that empower users to not only discover and engage, but also to transact.
Good American, a fashion brand offering trend-driven denim designs, is an example of a company that leverages social media to drive sales conversion. It uses influencers, tagging its products on their posts. Good American’s Instagram page has posts that are not only visually appealing images that highlight specific products but are also “shoppable”: When consumers click on product tags in the images, they are taken directly to the product detail page (PDP).
Good American’s PDP is fully transparent, displaying the size chart, product reviews, product descriptions and details, shipping costs, and policies for returns and cancellations. In addition, the brand’s Instagram shop is completely built out, enabling customers to “add to cart” and purchase products via Instagram Checkout — instead of being sent to the Good American website.
A successful social commerce journey requires sales transactions, which means that targeting must focus on the connection between product and individual, not just brand and individual. Customized conversion journeys are key to leveraging targeted data and advertising capabilities to promote a brand’s specific products to a specific user.
Targeted ads are fueled by first-party data gathered from social sites and influencer post interactions and engagement. Influencers take part in the introductory and discovery pieces of the conversion journey. Content and creative teams can help build authentic relationships with influencers who actively use a brand’s product or service and have a captive audience.
For example, Sephora uses makeup artists and beauty influencers to promote its product launches and offerings. Users discover products from influencers who tag products on their posts and direct users to Sephora’s social commerce storefront. Sephora also utilizes Instagram’s call-to-action feature to highlight product launches and invite its followers to be notified of updates. The combined power of influencers and social commerce’s tools creates a dual effect — boosting your brand’s revenue and reputation while strengthening consumers’ trust.
Successful assortment management between social network platforms can enhance the customer experience by allowing consumers to discover and purchase products that are suitable for a particular platform and targeted persona.
It is crucial that your e-commerce site be properly integrated with the social commerce’s platform and that your inventory has the agility to adapt to a new channel. When users transact on Instagram, for example, they are trusting the social platform and your brand to fulfill their order and deliver it to their doorstep. These strong connections must be in place so the inventory reflected is accurate and orders are fulfilled accordingly, building a cohesive social commerce funnel.
To create an engaging, shoppable post, the catalog and product information must be fully integrated and live. To gain customers’ trust, product details and inventory information must be up to date and accurate. Properly connected data flows that go through application programming interfaces can meet customer expectations and enable businesses to view the entirety of the pipeline. Many social platforms already have streamlined integration capabilities through existing leaders in e-commerce.
When adding a sales channel, measurement is critical. Data management integration will allow companies to track results and aggregate the data with other sales channels. Meta’s Facebook Commerce Manager tool visualizes key sales metrics and offers solutions through ads and post optimization.
All of these functions must tightly work in tandem to build a successful social commerce channel.
To say technology is essential for a positive social commerce program is an understatement. Data integration, visual merchandising and end-to-end reporting are just a few capabilities that can support your social commerce efforts. However, issues of privacy and security come with linking to social networks and providing payment support.
As you work to produce social commerce transactions that are fast, easy and secure, consider how predictive analytics tools can help gauge a consumer’s lifetime value, enabling you to focus on individuals with the greatest potential value.
Going forward, technologies such as virtual reality (VR) and augmented reality (AR) could play a bigger role in social commerce, especially in certain industries. For instance, one-third of individuals in a PwC survey said they used VR to experience an enhanced retail environment, and one-third reported buying products after testing them or browsing stores in VR. Whether it’s a travel agency that uses VR to immerse customers in a vacation destination before a trip or a real estate company that shows potential buyers a home in VR, the value of a social commerce VR experience is clear.
Building a social commerce program may require changing your company’s business strategy from assembling broad brand and consumer segment insights to compiling individual consumer insights that provide differentiation. To help support that effort, consider taking these actions.
Social commerce can provide clear benefits to both consumers and sellers, but to take full advantage, companies need to confirm that the social commerce platform is secure, private and easy to use. With many sites phasing out cookies, social commerce can provide a welcoming shopping experience — one that can benefit both buyers and sellers in a secure environment.