Do you know where your customers are? It’s pretty important if you want to sell to them, but thankfully the answer is quite simple: they’re on social media.
Just consider these numbers:
· Facebook has 2.85 billion monthly active users
· Instagram has over a billion
· YouTube 2.3 billion
And then there are the specialised social networks like Pinterest (478 million), Snapchat (238 million) and Twitter (187 million). There’s a lot of social media networks out there, and sure, there’s a lot of crossover in the userbase between these, but if you’re in the business of selling things, doesn’t an audience that numbers in the literal billions sound good to you?
When 71 percent of Australians use social media for around two hours per day, it seems only logical that, rather than try and draw them away from their beloved online interactions and networks, you would want to take your business to where they are instead. This is where social ecommerce comes in (also called social commerce, the terms are interchangeable, but we will be referring to social ecommerce here).
Social ecommerce is the hot new retailing trend right now. One in four business owners are selling through Facebook, and 30 percent of consumers say that they would make purchases directly through social media platforms. The current global market for social ecommerce currently sits at around $89.4 billion, but that’s going to reach $604.5 billion by 2027.
If this all sounds like a great opportunity, that’s because it is. And, even better, it’s incredibly easy to get started with social ecommerce.
What is social ecommerce?
Social ecommerce is a natural extension of the way that we exist online – particularly among the younger demographics. If you’re selling to younger demographics in particular, then the fact that generation Z spends two to three times longer shopping on social channels should make your ears perk up.
To put it simply – social ecommerce brings the online shopping experience to social media networks. Consumers can discover, buy and sell without ever leaving their favourite social media platforms. Even better, they can share that shopping experience with their friends and family, giving you instant access to their entire social network in a kind of instant, super-powered word-of-mouth marketing effect. Give people a great social ecommerce experience, and you will forever remain within the most trusted online communities of your best customers.
Where did the rise of social ecommerce come from? Perhaps this statistic will be illuminating: in the year 2000, a person’s attention span was 12 seconds. Now it is 8.25 seconds. That’s genuinely shorter than the attention span of a goldfish! Research shows that social media is doing this to us, and while there’s a whole debate around what that means to broader society, for retailers the impact is simple: while over 50 per cent of all Internet traffic is from mobile devices (where, not coincidentally, most people access social media), those ever-shortening attention spans also mean that mobile users are much more likely to abandon their shopping carts than desktop users.
The solution is to instead sell directly to users over the platform of their choice in a way that maximises efficiency. Social ecommerce allows retailers to mitigate against the impact of declining attention spans and a decreasing willingness to leave the comforting blanket of social media for any reason.
How does social ecommerce work?
It’s so easy to start selling on social ecommerce that we can explain it in a video that is less than a minute long. Using an established ecommerce solution provider like BuyerCircle, you can have an online store set up and populated with products to sell socially in very little time indeed.
From there, you need to integrate your online store with the social media networks that you want to sell across. BuyersCircle comes to the rescue here as well, as the platform is naturally set up for integrations into the major social media networks. The process is slightly different from one social network to the next, but for the three main ones:
· For Facebook, you want to set up a store on the platform itself, which you can do through BuyersCircle. Then, start sharing videos and posts! By simply tagging the products that you’re selling into posts, customers can click through to the store and make an instant purchase. Facebook is highly curated and excellent for sharing specific products, so having a rotating range of featured products on this platform is a good idea.
· For Instagram, meanwhile, you can include links to products on the stories and posts that you share. You do need to meet the eligibility criteria for a business on Instagram, but once you’ve linked your business profile to your catalogue, you can create dedicated shopping stories and posts that users can click on to immediately pull up price and discount information linked to your ecommerce site.
· The other “big one”, YouTube, is still building up its social ecommerce environment, but once it does it will be huge. Google’s plan is to allow retailers to create video content that will be linked directly to catalogues that viewers will be able to explore and buy directly from.
What are the benefits of social ecommerce?
It’s not just that people are spending more time on social media than ever; social media is more influential than ever before. Research shows that 61 per cent of people are likely to trust recommendations from friends, family members and influencers on social media platforms. Conversely, only 38 per cent are inclined to trust the recommendations from a brand on social platforms. Furthermore, other research shows that the younger generations (millennials and gen-z) do not respond to advertisements to anywhere the same extent as their predecessors.
Social ecommerce sidesteps the thorny issue of advertising, and taps into the way that the modern consumer prefers to consume, allowing brand supporters – your fans – to share their purchases and recommendations within these social media platforms. With the recommendation from such an online influencer, all their friends and family need to do is click on the link that their “trusted source” has shared with them to make the purchase. So, for brands and retailers, one of the greatest benefits of social ecommerce is that much of the “promotion” of the brand is driven by consumer behaviour and trusted sources, rather than needing to find a way to cut through the resistance to being “marketed to” yourself.
Another benefit of social ecommerce is that it is much easier to set up than a website ecommerce store, let alone a physical location. You just don’t have the same requirements for servers, web designers, architects or shop outfitters. What’s more, it’s far easier to specialise with a social ecommerce store. With more traditional retail formats, having a breadth of products is essential, because you need to capture the browsers that come to your store for any number of reasons, and try and convince them that they want the products that you’re selling.
On the other hand, with social ecommerce, you’ve got a different set of data on your side; did you know that 60 per cent of people discover new products via Instagram alone? What this means is that by focusing on a smaller number of popular items, your store can go “viral” and be shared around sub-communities on the social media platform, effectively doing the sales work for you and ensuring that your highly-curated set of products are actively reaching the right audience. Conversions, when the social ecommerce stores are properly structured with the right product mix, tend to be much higher.
We’ve got one final statistic to share that’s going to “sell” you on social ecommerce: 90 per cent of people buy from brands they follow on social media. Social media is a deeply personal thing, and by allowing your brand to be part of their network, you become not just something they shop at – you become their friend, in a very real sense, and the loyalty that they’ll show you in return will be fierce.
Social ecommerce vs ecommerce
For most companies, the question is not social ecommerce or ecommerce; it’s both. As useful as social ecommerce has been to their business, it has been an “add-on” to their more traditional retail presence.
However, if you’re new to the game, you might well be looking to specialise, or start out small, and in those circumstances, doing a side-by-side comparison between the different options makes sense.
What you need to know is that social ecommerce tools make it far easier to launch a store on a social network than creating a website ecommerce solution. The trade-off is customisation and flexibility, which are compelling features of ecommerce solutions. Basically, you’re not going to be running a company that offers customers the depth and feature-set that Amazon offers its customers.
There’s no right answer here, and indeed, there’s even a third option to consider; traditional commerce is typically the most expensive option, but it has its own set of benefits that may justify the cost depending upon your products and customers:
|Traditional commerce (physical location)||eCommerce (website store)||Social ecommerce (selling on social networks)|
|Tactile, in-person experience||X|
|Unlimited shelf space||X||X|
|Limited distribution area||X|
|Heavy IT requirements||X|
|High overhead costs||X|
|High human resources requirements/costs||X||X||X|
|High fraud/hacking risks||X||X|
|Capital investment required to scale||X|
|Automatic, detailed sales reports||X||X||X|
|Detailed customer analytics||X||X|
|Easy tax calculations||X||X|
|Easy shipping labels||X||X|
|Automatic product recommendations||X|
|In-platform customer feedback/reviews||X||X|
|Easy two-way conversations||X|
|Builds loyalty/fosters retention||X|
|Lowers marketing costs||X|
|Established, trustworthy channel||X||XX||X|
|Extensive compliance/security requirements||X|
|Ongoing maintenance and update requirements||X|
If we look at the above table and summarise it:
Firstly, an online store will offer your customers more convenience. For example, while some physical stores have loyalty programs to encourage return visits, this requires the customer to return to a specific location — not nearly as convenient as simply visiting a social profile in one’s network or returning to a website.
However, there are instances where a retail location is preferable. There is staff on hand to answer product questions, changing rooms to try on outfits, and demo products for testing features. Physical retail can turn the act of shopping into an experience, and give you the opportunity to make a sales pitch, upsell, and cross-sell, to maximise the value of each customer. With any type of ecommerce or social ecommerce, an online conversation replaces the in-person connection, and consumers tend to be more resistant to sales techniques.
With social ecommerce, the feedback loop shifts from you selling to your customers, to your customers selling to one another. User reviews are all-important to the success of your products, and so, if you’ve got faith that you’re doing something that adds value, is of a high quality and is interesting enough to catch the eye of jaded millennials that have seen it all, then social ecommerce is as valuable as a marketing channel as it is a sales platform.
Who buys from social ecommerce retailers (and what do they buy)?
To put this simply: everyone! Everyone who is on social media is going to be inclined to buy from social ecommerce retailers. People use social media for staying connected with family and friends, but also work (in Australia, 30 per cent of Internet users aged 16-64 use social media platforms for work). This means that innovative retailers are leveraging platforms like Buyerscircle to effectively sell everything from seafood and frozen foods through to toys and gifts, and on to office supplies.
Social ecommerce is particularly effective at the impulse purchase category, and this is for a couple of reasons. Firstly, the opportunity to buy tends to pop up in people’s feeds without solicitation. A friend might share that they’ve just bought a really cool custom coffee mug and, with the right discount applied, it becomes very difficult to resist pressing that “purchase” button, even if you’ve already got a cupboard full of them.
Because social media platforms are highly visual, products that look good in photos tend to sell well. Businesses in fashion, for example, are finding a world of new opportunities as they get influencers to model their clothing on their own feeds. Food retailers are finding success by providing social media feeds with highly shareable recipes… that just happen to have the ingredients available for purchase behind a simple click on the button.
Finally, people with very specific and niche hobbies often turn to social ecommerce because the products that they’re looking for are so hard to find via more traditional retail outlets. Because social media allows sub-culture communities to come together, social ecommerce outlets are finding it easier to reach their target communities than ever.
The power of peer-to-peer selling
The sheer scale of social media is opening new innovations for how your customers can buy and consume products, too. As we overviewed above, social media groups and communities allow people with shared interests to come together. In such groups community group buy models become an excellent way for retailers to reach large numbers of customers.
Social ecommerce is enabling a community group buying to take flight in Australia. It works like this: a group of people within a given area organises with a “spokesperson,” or “leader,” designated to interact with the retailers. They organise a bulk purchase of a good, at a lower price per unit, and then distribute to the entire community. It works to the benefit of all involved. Consumers get their products more cheaply, and have the distribution organised for them. Meanwhile, the retailer benefits from the placement of large orders that are distributed to a single location (rather than having to manage the logistics of individual purchases).
This way of buying and selling has really taken off in China, where people from regional cities and towns have sometimes struggled to get access to the same groceries and produce due to their limited buying capacity at an individual level. Social ecommerce, however, has enabled the formation of these collectives, giving the retail chain an incentive via large orders to organise shipping to these locations.
Group buy models can apply to just about any kind of goods through social ecommerce. It’s commonly used for groceries and other FMCG (fast moving consumer goods) necessities, but imagine a coastal community group getting behind a group buy of swimwear right before the summer season hits, or a community games group that could use social ecommerce to get a large shipment of board games and furniture that everyone can use. Through social ecommerce platforms like BuyersCircle, it becomes much easier for retailers to not only reach individuals, but also groups of like-minded consumers.
Social ecommerce in action
One great example of a successful buyers group is Peter Roan Seafood Community – a bricks-and-mortar retailer with two locations within Sydney that found a groundswell of demand for home delivery services. At first the manual handling of orders was enough, but quickly became unwieldy and inefficient. But turning to BuyersCircle, however, the company was able to grow a buy group from 500 people to a healthy, vibrant and sustainable community of more than 5,000 people.
Learn about the Peter Roan Seafoods Community experience here.
There’s another side to social ecommerce platforms like BuyersCircle, however, which makes it easy to not only sell to customers, but also have inventory to sell. Vendors (companies or individuals with products to sell) can, of course, leverage BuyersCircle to sell directly to their customers. Or they can establish a network, or channel, of e-tailers. By setting up discounts for large bulk sales of products, other BuyersCircle social ecommerce retailers can place orders and then on-sell those products to their own customers.
Why would a vendor do this? It’s quite simple. Suppliers can develop a web-like network of social ecommerce retailers, each with their own highly loyal customer bases, representing the supplier’s product on their behalf. With just a few social ecommerce partners like this, the supplier can reach a much larger network than would have been possible on their own.
The ability for BuyersCircle to facilitate a complete B2B2C chain without the same warehousing and inventory pain-points of other, more traditional forms of retail is one of the strongest features of social ecommerce. It’s leveraging pure innovation to drive better efficiencies and value for all involved.
Learn more about the role of suppliers in the BuyersCircle network here.
How to build a social ecommerce strategy?
Because social ecommerce is a different kind of retailing, the go-to-market strategies that are successful are also going to be different, and brands will need to make sure that they carefully plan out their approach before they get going.
1) Firstly, which networks are you going to sell on? Each social media network has its own personality and demographic. Facebook, for example, has had a large influx of boomers, and is genuinely cross-generational. Instagram, meanwhile, is owned by the same company as Facebook, but is specifically directed towards highly visual audiences, with its emphasis on photos and videos. If what you’re selling doesn’t look great in photos, it won’t get a play on Instagram. Pinterest is popular with women, YouTube has a large Gen Z community and Twitter is seen as a place for people with degrees. Do your research and understand which social networks are most aligned to your brand, because you won’t be able to focus on them all, so you should focus on the ones you can do well.
2) Less is (usually) more; understand which products are going to have the highest sell-through, and focus on those. The nature of social media is that people want instant fulfilment, rather than to browse, so you want to make sure that you’re putting the single product that a person will want to buy in front of them, rather than asking them to make a decision.
3) Be active and engaging! People on social media have a high resistance to being “sold” to. The great thing about social media is that it provides a one-to-one interaction, so approach it that way. Be professional, but also personable, and research how to build a brand via social media, because it does require a different approach to traditional branding strategies.
4) Find the right platform to host your store. The fewer clicks from product discovery to purchase, and the easier the platform is for the consumer to use, the more conversions you’ll get. Having a dedicated platform like BuyersCircle, which has been specifically structured around this form of selling, is essential to social ecommerce success.
Why social ecommerce is important for brands
Visibility is everything to modern branding. As the old philosophy mind-bender goes: “If a tree falls in the forest does it make a sound?”, but when it comes to retail, if you’re not around when people are in the mood to make a purchase then you absolutely don’t exist.
Social media has become where our lives are concentrated. We use it to stay in touch with family and friends, but more than that, social media is also our dominant resource for learning about the world. When Facebook got into a stoush with the Australian government and subsequently turned off the ability for Australian media to be shared over its platform, it became a huge problem for a while. Traffic to Australian media organisations dropped by hundreds of thousands of views overnight, just showing how important Facebook is as a daily information resource.
Put those two things together and it’s easy to see why people spend so long on social media, and why it’s so important to have a presence there. It has always been an inevitability that people would start shopping there too. The convenience of already being on the platform, and the streamlined purchasing potential when compared to having to log off, go and visit another website and then start looking for the product that you want to buy is compelling. Social media is the ideal place for people to go to get information on the products that they want to buy. After all, their social networks are their most trusted source of advice.
You can have a healthy business without selling over social media, but you can broaden your market opportunity by also having a presence via social ecommerce. For most retailers social ecommerce is becoming a critical component of their omnichannel marketing strategy for this reason. Social ecommerce is often the discovery point where a person first interacts with a brand, and if they enjoy the experience, it becomes possible to draw them deeper into the brand with additional retailing options, whether those be online retail or bricks-and-mortar stores.
All that you need to get started in this exciting new world of social ecommerce is the right sales platform. One that has focused capabilities and integrations with the major social networks and can give your customers a near-instant purchasing experience. Want to learn more about how BuyersCircle can be that platform for you? Get in touch today!