Social Commerce – some have probably heard of it, for some the term is new. Social commerce turns social media into a marketplace where consumers can buy items instantly. The phenomenon has long conquered Asia and is also on the rise in Europe. What can fashion retailers achieve with it? FashionUnited asks Jorrit Steinz, Founder and CEO of Netherlands-based scale-up ChannelEngine.
The e-commerce landscape is constantly changing and social media are evolving into marketplaces. To avoid confusion, social commerce does not mean running an ad on social media where a click leads to a brand or company’s website. One speaks of social commerce when the ordering process is completed directly in the app. For example, TikTok introduced the TikTok shop in 2021. In doing so, it followed its competitor Meta – the parent company of Facebook and Instagram. This allows TikTok users to buy items directly in the app. In addition, there is “live shopping”, where users can buy items in the live stream, sometimes with exclusive discounts. At the moment, these services on TikTok are only available in Asia, America, and the UK, but they will soon arrive in Europe as well.
Research firm Accenture released a report in January that predicted that by 2025 the social commerce market would Worth $1.2 trillion should reach. That’s the equivalent of one billion euros. That’s not surprising given that 44 percent of the world’s population (roughly 3.5 billion people) uses social media. Users spend an average of 2.5 hours a day viewing photos and videos on the relevant platforms.
Social commerce helps to address new target groups
According to Steinz, TikTok and Instagram are the two platforms on which social commerce is booming. “A purchase is now possible with the push of a button. On Instagram or TikTok you just have to click the button in the post or in the live stream and will be taken directly to the purchase.” In his opinion, this ensures that consumers do not bounce while they are not redirected to an external website. In addition, retailers can use these channels to reach new target audiences, according to Steinz.
There are different types of consumers: the focused shoppers, the inspired shoppers and the impulsive shoppers. The latter two are the most sensitive to this phenomenon and are increasingly shifting their online searches to social media, says Steinz. “Live commerce in particular is developing very well. This is because you can then see how a product really looks like and you can ask questions in the chat if necessary. People mainly show products here that need more explanation. For example, I know a company that deals in used handbags from designer brands. Products from the cosmetics industry are also doing very well.” According to Steinz, interaction is very important. “Especially for young people. They’re looking for validation and they can easily find that with live shopping.”
Accenture’s report also shows that people buy products and services based on recommendations or inspiration from people they trust. These can be friends and family, but also communities or influencers. So what kind of products do people want to buy through social commerce? The answer: clothes. It accounts for 18 percent of live shopping.
Tips for getting started in the social commerce market
Steinz agrees with this statement. “The entire fashion range lends itself to social commerce. However, the challenge lies in how to promote it. People need to pay attention to it.” Using the right hashtags is also important, and the right influencers can also push the company in the right direction.
More tips from Steinz: Automate your system. “When selling through social commerce, you have to make sure that the inventory is correct and that the order is being processed properly. If you don’t do that, you lose a lot of time and it’s a disappointment for the end consumer if an item suddenly can’t be delivered after all.”
”Experiment with products. In the fashion and beauty industry, every product is suitable for social commerce.” It is also important to target the right influencers who have a wide reach. Nevertheless, a product must be clearly explained. “Is the item big or small, what material is it made of, and so on.” As a tip for businesses, he adds: Merge e-commerce, social media, and marketing. “Often they’re run separately, but on this project it’s super important to bring them together,” says Steinz.
So it seems that social commerce can help fashion retailers to reach new target groups. Steinz assumes that in five years everyone will have gotten used to the phenomenon. That’s why the ChannelEngine founder recommends “just get started.”
This article was published on FashionUnited.nl. Translation and editing: Barbara Russ