Social commerce – the process of selling products directly on social media – is revolutionizing the e-commerce industry.
Indeed that global social commerce market is currently valued at $ 89.4 billion and is expected to reach $ 604.5 billion by 2027.
But what is driving the rapid shift towards social commerce and how can small businesses use this opportunity to generate more sales?
Later SVP of Marketing, Cameron Uganecshares his thoughts and predictions:
What is social commerce?
Social commerce is a subset of e-commerce where everything happens on social media – product discovery, search, click-to-purchase, and post-purchase support.
In other words, it’s a one-stop shop where people can discover and buy products – a fully streamlined sales funnel that takes customers from inspiration to purchase in seconds.
Unlike the earlier stages of e-commerce, where users bought products primarily from a third-party website or marketplace, social commerce happens in one place, so businesses can engage with consumers at every touch point on the sales funnel.
It has the potential to improve the shopping experience and is huge for brands looking to increase their sales.
How social platforms evolve to drive social commerce
The concept of social commerce is not new, but it was accelerated in 2020 due to COVID-19.
With in-store shopping interrupted, many small businesses turned online to connect with and sell to their audience.
The future customer is an example of this trend Paper smiths. The stationery brand was forced to permanently close one of its stores and switched to an online sales strategy. Use the Instagram store to promote their products.
In a message to her ward, founder Sidonie Warren thanked them for supporting their online store and sharing User generated content::
And Papersmiths is just one of many who had to realign their sales strategy over the past year.
Actually, Later saw a spike of new customers who needed Social media scheduling and management tools in March and April 2020 – more are added every day:
And social media platforms have also evolved:
According to Business InsiderSocial commerce is projected to account for 4.3% of all ecommerce retail sales in the US in 2021 – a whopping $ 36.09 billion.
Take that away? Social commerce is here to stay and is becoming more powerful than ever.
Hear from later and small business experts for free Social Sales Sessions! Learn how to create a digital storefront, sell on social media, and more.
What does social commerce mean for small businesses?
For small businesses, it’s time to fish where the fish bite and go where the customers are.
The statistics don’t lie – consumption habits have shifted heavily to social media:
Social media platforms like Instagram have become a personalized virtual shopping mall. With just a few clicks you can browse new stores, chat with your friends, chat, find inspiration and buy products.
In other words, social commerce is becoming the tailored shopping experience of the future.
One of the best reasons to experiment with social commerce? Its low barrier to entry.
Many later customers have built businesses solely on Instagram. Anyone can create a social media account (for free!), Build an engaging community, and then sell their products within the app.
By using built-in e-commerce functions instead of traditional buying routes, you can create an optimized sales funnel for your company.
Take customers later Collective Arts Brewing, for example. When bars closed due to COVID-19 lockdowns, their Instagram page became a key channel for increasing sales:
The Craft Beer Company uses Instagram to connect with their audiences, support local artists, and promote new drinks and merchandise.
In short, they can seamlessly convert their social engagement into sales.
The future of social commerce
We are still in the early days of social commerce, which makes it full of potential.
For several years brands have been active on social media as a brand awareness game.
Now we are entering the next phase of the social. And the winners will be those who are now betting on social commerce. It’s time to make it even easier for the audience you’re building to click “Buy”.
Here are some predictions for social commerce for 2021:
- With visual content, you win in this area. Social media is driven by visual experiences, and the brands that benefit from it will thrive.
- One website is not enough. For consumer brands, social media needs to be treated as the primary sales channel.
- Each social platform uses Facebook’s built-in approach to shopping, so you can go from product discovery to buying all content within the app.
- TikTok will be the next big wave for social commerce.
- We’ll see more people buying on video (keep an eye out YouTube shopping).
- Audio content platforms like Clubhouse may be exciting, but they still have a long way to go to keep up with Instagram’s e-commerce capabilities. Watch this room.
With social commerce, businesses can make money right where their customers are, and the tools are instantly available (with more to come).
Are you ready to fish where the fish bite?
Get the latest social media tips and strategies straight to your inbox. Subscribe to Later’s free newsletter today!
Cameron is the SVP for Marketing at Later and is known for building category-defining brands. He helped build Hootsuite, has worked with Microsoft, Four Seasons and General Motors, and is passionate about empowering people to build good things online.