Social media platforms have spent the last few years introducing more purchasing features in the hopes of finally bringing social commerce to fruition. Their efforts have been paying off, as nearly 80 million U.S. consumers purchased a product or service directly within a social media post in 2020, a 30% increase over 2019 according to Statista. That number is projected to grow to over 100 million by 2023.
Facebook, Instagram, Pinterest, YouTube and TikTok have all announced new commerce features or are testing them for a future launch. Features such as in-stream retail features, which allow consumers to complete a sale without leaving the experience. While primarily directed at consumer sectors, B2B marketers must consider how this revolution in retail and competition among social media platforms will play against their strategy, especially for 2022.
Why Social Commerce Opportunities Are Arriving Now
Social media has existed for nearly two decades, so why is social commerce only now beginning to take off? Previous attempts to establish social media retail had centered on attracting visitors to a profile, then encouraging them to visit a website to complete a purchase or a landing page to download a white paper.
These tactics brought customers closer to brands and made the discovery process more convenient. But to purchase or learn more about a brand, customers had to move from the social platform to another site, which interrupted the experience with a different online portal.
New in-stream retail features streamline the sales funnel. Followers can click on a button to view more details about a product or service in a video or purchase an item from an image carousel.
The platforms are all taking different approaches to in-stream, playing to their strengths in content formats and partnerships. Instagram, for example, has introduced more creator options to appeal to influencers who hold powerful sway on the platform. The changes also keeps it competitive against TikTok. Pinterest introduced Slideshow, a carousel ad that pulls products from brand catalogs into a collections ad. The new feature dynamically creates the ad, tailored to shopper engaged with a brand board on the platform. YouTube has begun testing shopping features in livestream and connected TV (CTV) to win back some of the ecommerce spend as Instagram and TikTok grow in popularity among consumers.
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Social Commerce Is Growing and the Competition Is Heating Up
These in-stream retail features give marketers previously unavailable retail advantages. For example, followers can ask a livestream presenter about the product and service being mentioned. A real-time discussion can potentially accelerate the person's decision to purchase.
In-stream retail also enhances how brands can partner with influencers. With over 50% of millennials and Gen Zers agreeing that social platforms are better than search for product discovery, partnering with influencers who frequently post online can expand the brand's reach.
U.S. consumers spent $26.97 billion on social commerce in 2020, and 2021 has already surpassed that figure. Buyer behavior clearly changes according to the platform, with Pinterest claiming its users "have 85% bigger baskets than on other platforms."
The pandemic only increased this behavior. Digital media and online access were the means for communication for many. And the trend continues to build momentum, even as retail stores reopened. Hootsuite reports that more than half of online brand discovery now happens in social feeds. eMarketer noted in its latest forecast that brands "should master social media platforms to not only inspire consumers but also facilitate one-click purchases."
The activity in the social commerce space has also attracted interest from Fintech players. Reuters reported that Pinterest is considering an acquisition by PayPal. Valued at $45 billion, the potential merger would yield an intriguing combination of payment services and retail options that brands can leverage to serve niche audiences like those on Pinterest. It also suggests a new level of intense competition to come between the social media platforms.
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Social Commerce Will Shift Analytics Tactics
These changes will clearly require marketers shift their social media analytics tactics. While follower growth will remain an area of focus, engagement will come into sharper focus. YouTube, for example, introduced the metric Typical Audience Retention. With access to metrics like YouTube audience retention numbers, marketers will get a better idea what content is working to inform content creation strategies. Managing engagement is essential to increase opportunities for sales and conversions along the customer journey. In-stream retail plays to that journey well.
The current trends emerging lean mostly towards consumer goods, but B2B marketers must avoid taking this retail transformation lightly. Social media trends have a habit of trickling down into B2B planning strategies. With eMarketer estimating social commerce sales in the US will double to reach over $79 billion by 2025, overlooking this trend could have serious implications. Marketers not planning social commerce well will be leaving revenue on the table.