In the west, social media platforms like Facebook and Instagram are used for, well, social interactions while e-tail platforms are used for shopping. It’s still a different mental-mode where one has to switch from social to commerce. In the east, however, the convergence is more evident where the same app, like WeChat for instance, is used for social interaction and for shopping. Commerce and social are intertwined and this is where S-commerce or social commerce is taking roots.
With a population of over 1.2 billion people, India is one of the most varied markets in the world. Given the strong retail and consumer outlook, the country is expected to witness redefining trends in the consumer markets which will shape the future of retail and consumer industry. Consumer experience will be the key focus area for brands and technology will facilitate the enhancement of experience throughout their shopping journey.
S-commerce is a next generation trend that will reshape the future of commerce. Globally, sales worth $50 billion was generated using social networks in 2017. Today, young consumers to the tune of 52% especially in the range of 25 to 35 indulge more in posting ratings and reviews of their purchases. Similarly, in India, social media platforms and online product/ service reviews form an important part of millennials’ shopping journey as it influences their purchase decisions. 28% millennials purchase products due to social media recommendations and 63% millennials stay updated on brands through social media. Such is the advent of S-commerce that the term ‘influencer marketing’ increased by over 300% on Google searches in 2018. Almost 65% of marketers are planning to increase their budgets for influencer marketing.
The Rise of Social Commerce Is Inevitable
The line between social media and e-commerce is increasingly becoming blurred, commonly known as social commerce. The sheer amount of time spent by people, especially younger generations, on social media apps has positioned social commerce as the indisputable market breakout trend for e-commerce in the coming years. Generation Z spends 2-3 times more shopping on social channels than the average consumer, with Instagram and Snapchat taking the lead, while Generation X prefers shopping on Facebook. Hubspot defines omni-channel commerce as “the ability to deliver a seamless and consistent experience across channels while factoring in the different devices that consumers are using to interact with your business.”
Their definition highlights the mounting pressure on brands to streamline their marketing models across devices and applications. With Generation Z connected online near-constantly, mainly on social channels, and on track to become the largest consumer generation on the planet, the importance of social commerce is obvious for forward-thinking e-commerce brands.
Video Content, Social Apps, And Evolving Technology
One of the primary drivers of the success of social commerce has been the shift of preference by Generation Z and Millennials away from Facebook and towards platforms like YouTube, TikTok, Snapchat, and Instagram. The key is short-form video content, which is rapidly becoming the dominant form of online content. For example, 91% of consumers prefer interactive or visual content, such as video, over conventional static media, and internet video traffic is expected to have a compound annual growth rate increase of 33% from 2017 to 2022. This trend is complemented by new technology that underpins mobile applications and video streaming, from progressive web applications (PWA) to the pending materialization of 5G.
“One of the most overlooked aspects of digital marketing campaigns, especially with smaller businesses, is that YouTube is the second largest search engine behind Google,” says George Konidis, an SEO expert and Founder of Growing Search.
“It’s hard to achieve digital growth among younger consumers when you ignore video content. We are seeing an enormous boost in video content consumption, and the transition to hybrid social apps, like PWAs, will only accelerate this trend,” he says.
PWAs are a form of hybrid e-commerce website and mobile application. They arose out of the market need for faster and deeper integrations of e-commerce functionality into mobile apps – particularly social media. They load faster than mobile sites, and brands like West Elm and Lancome are some of the technology’s early adopters.
For younger users that grew up on the internet and are impatient when it comes to loading times and buffering, PWAs represent a marked opportunity for brands to capitalize on social commerce. For example, when Lancôme converted its mobile site to a PWA, conversions went up 17% and mobile sessions increased 51%. Depop, who just closed $63 million in funding as a social fashion app targeting Millennials and Generation Z, is an excellent example of the convergence of social commerce and technology. Similarly, the popularity of “merch-drops” and exclusive branding on new social media channels like Monkey and TikTok are gaining steam. And marketers are taking notice.
For example, Sprout Social cited prudent evaluation of emerging social media channels as an important marketing tactic for online brands. Instagram and Snapchat are both working on built-in e-commerce projects, hoping to keep pace with upstart social commerce apps.
“Online shoppers do 12 searches on average before engaging on a specific brand’s website. Social commerce can connect social media users directly to brands with a simple click; it’s a powerful way to onboard more consumers and reduce the average number of searches,” says Konidis. “Small online businesses have never had the opportunity to bring in more consumers and experience outsized growth.”
[bctt tweet="Young People Shape Consumer Markets."]
Quite simply, young people determine what is trending culturally, and consequently, what drives demand in consumer markets. The combination of Generation Z and Millennials, who have very similar social and political tastes – not just commercial – represent a paradigm shift in digital commerce. What once consisted of static online brand websites is becoming a much more fluid ecosystem defined by multiple threads of content mediums.
The rise of social commerce is poised to coincide with some significant technological boosts, and even perhaps threaten the dominance of social media giants like Facebook and Instagram. Facebook has even gone as far as to discreetly develop a proprietary cryptocurrency, seeking to enter the payments market for what seems like an eventual integration of e-commerce features too. What’s clear is that social commerce is inevitable, driven by the changing cultural and consumer preferences of younger generations.
“It’s hard to achieve digital growth among younger consumers when you ignore video content. We are seeing an enormous boost in video content consumption, and the transition to hybrid social apps, like PWAs, will only accelerate this trend,” he says.
PWAs are a form of hybrid e-commerce website and mobile application. They arose out of the market need for faster and deeper integrations of e-commerce functionality into mobile apps – particularly social media. They load faster than mobile sites, and brands like West Elm and Lancome are some of the technology’s early adopters.
For younger users that grew up on the internet and are impatient when it comes to loading times and buffering, PWAs represent a marked opportunity for brands to capitalize on social commerce. For example, when Lancôme converted its mobile site to a PWA, conversions went up 17% and mobile sessions increased 51%.
Depop, who just closed $63 million in funding as a social fashion app targeting Millennials and Generation Z, is an excellent example of the convergence of social commerce and technology. Similarly, the popularity of “merch-drops” and exclusive branding on new social media channels like Monkey and TikTok are gaining steam. And marketers are taking notice.
For example, Sprout Social cited prudent evaluation of emerging social media channels as an important marketing tactic for online brands. Instagram and Snapchat are both working on built-in e-commerce projects, hoping to keep pace with upstart social commerce apps.
“Online shoppers do 12 searches on average before engaging on a specific brand’s website. Social commerce can connect social media users directly to brands with a simple click; it’s a powerful way to onboard more consumers and reduce the average number of searches,” says Konidis. “Small online businesses have never had the opportunity to bring in more consumers and experience outsized growth.”