‘Social commerce’ could be a new and lucrative source of income for your business.
Businesses are using social media to connect with customers, pique interest in new products or services, and build brand loyalty. But could it actually be used to make money?
It’s one thing to build a loyal base of followers. It’s another thing to translate those likes and hearts into revenue-based ROI. As a business owner, here’s what you need to know before taking the leap.
A new kind of commerce
‘Social commerce’ combines e-commerce and social media, allowing you to buy a product or service without leaving the social media network. It could involve anything from 'buy' buttons to peer-to-peer marketplaces. But it all starts with creating demand, or what some are calling ‘conversational commerce.’
“While browsing social media sites we’re constantly looking at products, whether we realize it or not,” says Andie Katschthaler in a blog post for walls.io. “Looking at a fashion blogger’s Instagram photo creates a desire to own the clothes they are showing off just like the post showing off interior design creates demand. Instagram and Pinterest, especially, have given importance to visuals in social media, for brands, and for creating demand.”
But making the move from engaging to selling isn’t so easy. “Over the past years, multiple social networks have tried to branch out into social commerce, one way or another, but the practice still hasn’t caught on,” she says.
Where are things today?
Twitter, for example, introduced a ‘buy’ button last year with payment provider Stripe, but development was halted after only a month. Some argue it failed because Twitter doesn’t provide the same browsing environment as Instagram or Pinterest — it’s more about getting quick hits of news than perusing fashion and design.
Despite Twitter’s failure, other social media sites are experimenting with in-app purchasing to make the shopping experience more seamless (and perhaps more impulsive) for consumers.
Pinterest, for example, has rolled out buyable pins in the U.S., allowing brands to add a ‘buy it’ button next to the ‘pin it’ button. Secure online checkout is offered via e-commerce platforms such as BigCommerce, Shopify and Salesforce Commerce Cloud. The shopping process is made even easier with a capability that allows consumers to take a photo of a product with their smartphone and search for similar products to buy on Pinterest.
Instagram is also making strides in this area with clickable call-to-action (CTA) buttons designed to drive mobile app downloads and online purchases. It’s testing a function that would allow consumers to tap on a tagged item for more information, images and product details. The test involves 20 U.S.-based retailers including Kate Spade and Warby Parker. If the consumer taps the ‘shop now’ button, they’ll go directly to the brand’s external sales page. So, while the sale isn’t taking place on Instagram, the social media site is still playing a role in the shopping process.
Facebook also offers ‘buy’ buttons on ads; advertisers can tag products on select pages. But Facebook has also opened Facebook Marketplace, which allows people to buy and sell used items on a mobile platform. And the ability to exchange money via Facebook Messenger — a capability the social media site has offered for a few years — is now available to businesses, which means businesses can accept payments within Messenger (using credit card information people have stored in Facebook or Messenger).
What to learn from China
But these advancements pale in comparison to WeChat, a social messaging app used mainly in China, which has already successfully integrated e-commerce with social media. The app allows users to make payments using its WePay feature — not just for coveted items, but even for bills. Indeed, WePay has features such as QR code payments, in-app Web-based payments and native in-app payments so that brands can socialize with customers and close sales.
The app already has 806 million monthly active users who spend an average of 70 minutes a day on it, according to a report by KPCB analyst Mary Meeker, as reported by AdAge. In the Western hemisphere, however, social media and e-commerce sites still operate separately.
While social commerce holds promise, the market is still limited — at least right now. “Social commerce methods (sharing on social networks, using social media logins to help you know your shoppers better) are a far better bet. But evaluate these moves on the merits, rather than out of a misguided desire to ‘adopt social commerce’ as a platform or strategy,” says Kevin North, CEO of e-commerce analytics provider Terapeak, in a guest blog post for Adweek.
It’s still early days for social commerce, especially if you’re a small or mid-sized business. But it’s a good time to start taking baby steps: making sure your website is mobile-friendly, ramping up your e-commerce capabilities and building a social media presence. Once you start getting those likes and hearts, you may one day be able to translate those into dollar signs.
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