Informative

Social Commerce: Definition, History, and How it Works

Social Commerce is an ongoing experiment that many companies have already dug into. As a user, have you ever clicked on a social media ad, and when you saw that you’d exited, let’s say, Instagram, abandoned the purchase? Yes, you didn’t want to leave the platform. If you’re an advertiser, this will be the solution for those users who wish to convert but don’t want to stop scrolling. Alongside Shoppable Ads, Social Commerce, for many companies, is now the way forward. In this blog, we will explain how Social Commerce works by answering FAQ, and maybe, you’ll find out whether it’s a fit for your company.

Millie D'Arcangelo

Copywriter at The Next Ad

What is Social Commerce?

Social commerce, within online advertising, means purchasing a product from a company within the social media platform itself.

Right now, social commerce is available on both Facebook and Instagram. However, it’s still an experiment that is undergoing constant evolution, so to see whether Social Commerce suits your company, research, analyses, and tests need to be done. 

Social commerce involves Shoppable Ads and Posts, which are slightly different from the ordinary ones as they include…

• Buy buttons;
• CTAs that will redirect users to your website;
• Peer-to-peer buying and selling;
• Plugins and apps.

Just think of the ‘Swipe Up’ option on Instagram Stories. How do they work? You see an ad/post you’re interested in, swipe up, and then you get to the seller’s website without leaving Instagram. You make the purchase, close the window, and you’re right where you left off.

Why and how did Social Commerce emerge?

Let’s dig into a bit of history.

Nowadays, users are dependent on social media to such an extent that purchases are not likely to be made, only because they don’t want to leave the platform. As a consequence, Social Commerce arose as a solution to turn the user’s social engagement into purchases. 

Unsurprisingly, in 2007, Facebook was the first platform to investigate Social Commerce. By 2014, you could already purchase products directly from Facebook with the buy button. The first test for Shoppable Ads was launched in 2015, and, finally, in 2018, Facebook Marketplace was introduced, a platform within Facebook that competes against Amazon, eBay, and others.

Instagram started a bit later, but, looking at it now, it definitely has more potential. The reason why users make use of Instagram is to look at beautiful pictures and videos, which makes it easier to turn engagement into sales. Additionally, Instagram is mostly used by a younger audience: the masters of craving immediacy. That’s what shoppable ads and posts are for: immediate purchase through social media platforms.

So, what’s the advantage of Social Commerce?

As we were saying, Social Commerce is not only immediate but also effective. Basically, if we talk about the marketing funnel, we’re reducing steps, making the sales process much quicker for the customer, and easier for the seller. 

Image credits to www.bigcommerce.com

In summary, all these benefits were brought up as soon as the use of smartphones and social media arose. Simultaneously, the wish for immediacy was growing amongst the younger generations. Some younger users have claimed to “not see feeds anymore” and that they “turn to Stories instead” because they show the latest news about friends, family, brands, and celebrities. Due to their dynamic nature, Shoppable Ads work as a solution for the urge to be up to date.

Facebook and Instagram: how does Social Commerce work?

Facebook

• Create “Shop Now” stores, which allow you to:
  • Upload your products and their information;
  • Customise your catalogue;
  • Sell directly from your page;
  • Manage orders;
  • Place a Shoppable Ad;
  • Get insights.

Tip: Try to be selective with the number of products put in your Facebook shop. Remember you still need to experiment as not everyone might be familiar with the concept of Social Commerce yet.

• Messenger works as a medium to communicate with customers:
  • Fills the need for immediacy;
  • Generates a feeling of trust on the customer;
  • Problems can be solved faster.

Instagram

• Instagram Shopping allows you to tap on images and stories to view products that feature on them. When you hover over the post, you’re able to see the name and price of the product and the possibility to see it on the seller’s website.

Image credits to www.falcon.io

 In-app checkout feature: some companies offer the possibility to make a purchase within Instagram. On the contrary, with regular Shoppable Ads and Posts, you leave the platform without realising so, as you still are redirected to the seller’s website.

This is what most businesses are striving for; however, there’s a downside. As users won’t be redirected to your website anymore, building a retargeting audience based on Website Visitors will become a struggle. Since the purchase will be attributed to Instagram,  the conversion won’t be recorded as such, and, as a consequence, buyers won’t feature in the ‘Website Visitors’ list.

Conclusion: Social Commerce, an Ongoing Experiment with Good Potential

Social Shopping is an ongoing experiment that many companies have already explored, but that doesn’t mean you need to. For your company to benefit from Social Commerce, you need to do qualitative and/or quantitative research to get to know your possibilities. As we’ve mentioned, younger audiences turn to social media more often, which means they’re more likely to engage with shoppable ads and posts. 

If you have an e-commerce company and social commerce has been giving you favourable results so far, you’re not obliged to switch. Social Commerce is still an ongoing experiment with good potential. It will improve alongside social media usage and technology. You’re free to try and not to try. Just bear in mind the possibilities and restrictions, both of social commerce and of your business.

So, does your business fit into the concept of Social Commerce?