The key ingredients of social commerce success
If you want to know why social commerce is grabbing the attention of brands and retailers worldwide, consider the following: in 12 hours on 20 October 2021, one of China’s most successful live streamers, Li Jiaqi – known as the Lipstick King – sold products worth ¥10.7bn (£1.2bn) on online shopping site Taobao.
Social commerce is all about selling products directly via social networks such as Instagram, TikTok and Twitter. Consumers get to see product demonstrations, have their queries answered ‘on air’ by the presenters and make purchases, all without having to leave their site of choice. This fast-emerging sales channel was worth $585bn (£483bn) last year, according to Grand View Research, which forecasts that the market will expand at a compound annual growth rate of 30.8% from 2022 to 2030.
Increasing numbers of British brands are grasping its potential to reach a wider audience. For instance, after Barbour adopted the in-app shopping features that Instagram started offering in the UK in 2018, its sales via the channel increased by 42%, with traffic to the luxury label’s website from Instagram nearly doubling.
According to TikTok, this is “a new kind of shopping culture we call community commerce – that intersection of shopping, entertainment and community, where a single piece of content can quickly go viral and create demand globally. From hashtags like #AsSeenOnTikTok to #TikTokMadeMeBuyIt, there are over 29 billion views that speak to how real this behaviour is and how it’s clearing the shelves for brands.”
Indeed, the company points to research published last year indicating that 37% of TikTok users had bought an item that they’d discovered through the platform.
It’s a powerful combination. On the TikTok Shop live channel, for instance, a make-up influencer called Nisrin has sold £10,000 of goods in one session to her 500,000 followers.
The platform says that its recent “summer sale event delivered over 267 million live views, illustrating how much appetite there is for this format – not just in general, but specifically in terms of commerce”.
Over on YouTube, The United Stand, an unofficial channel for Manchester United fans, has sold a substantial number of t-shirts and hoodies to its 1.53 million subscribers.
Mark Goldbridge, The United Stand’s founder and presenter, believes that the social commerce model is the best way to achieve sales at a time when the high-street retail channel is already struggling badly and a recession is nigh.
“We’ve used YouTube to create the kind of content that matters most to the fans,” he says. “Then, to take that passion a step further, we’re looking for gaps in the market to engage and monetise the community we’ve built.”
What it takes to get it right
Another key to success with social commerce, particularly live streaming, is having an interesting tale to tell. That’s the view of Simon Waterfall, MD and chief soda maker at soft drinks company Soda Folk.
“This is essential on TikTok,” he says. “The platform tends to suit brands with stories to tell. We have compelling ones to tell about our origin, ingredients, flavour inspirations, charity work and even the people we feature on our packaging.”
When brands include their founders as part of the narrative, it builds relationships with the online community and delivers measurable results, according to TikTok. It believes that consumers tend to see the founders as authentic experts in their fields.
Showcasing a broad range of content and activities is also an important part of getting the audience truly engaged with your brand, says Xavier Klein, UK head of performance at ecommerce consultancy Making Science.
“This needs to incorporate creativity – such as audiovisual material that’s attractive and coherent with the brand – to generate interest with the target audience,” he advises. “It’s not enough to simply open shop windows on different social networks. You have to make an effort.”
Pet food and accessories retailer Petco, for instance, has run a range of live shopping events on Facebook, mixing fashion, charity and, of course, cute animals.
The first such event, in April 2021, was called the Perfect Fit. Hosted by actress, influencer and pet owner Arielle Vandenberg, it featured a range of fashions, plus an appeal to audiences to adopt rescued dogs. Perfect Fit reached more than 986,000 people, exceeding Petco’s target by 44%, and the total revenue from the sales it generated was more than twice the cost of holding the event.
Production values matter
Naturally, image counts for a lot on platforms such as Instagram and TikTok. Homeware brand Piglet in Bed has found that the effect of well-chosen visual content is an important factor in social commerce.
“What’s really cool about this channel is the way that one organic Instagram post, say, can affect every part of the marketing funnel,” says Piglet in Bed’s head of brand, Rhiannon Johns. “Consider an image of a bedroom featuring our bedding, for instance. If the photograph is well shot and features a beautiful, interesting, on-trend room where our products are front and centre, the algorithm will recognise that and place that image in front of a lot of people on the platform.”
Xu Zhang, assistant professor of marketing at the London Business School, points out a key caveat that brands should consider before incorporating social commerce into their marketing strategies.
“If consumers engage with social media mainly to interact with other users, stay up to date with news and be entertained, it can be challenging for a brand to switch their mindset into purchasing mode,” she says. “This mindset is expected to change gradually as the social platforms improve their shopping tools to create a seamless experience between content consumption and commerce.”
Olivier Buffon, head of international at Faire, a wholesale e-marketplace for independent retailers, agrees. “As social commerce grows, we’re likely to see more platforms integrating checkout capabilities within their apps,” he predicts.
That should create more opportunities for smaller retailers, according to Buffon, who adds: “Independent ones in particular are talented at bringing a sense of humanity to the shopping experience, which is hard to do in digital formats. Social commerce helps them to deliver this more personal touch online. It will be cool to see how these retailers figure out how to use all these tools at their disposal and innovate with them.”
So, even though the potential of social commerce methods such as live streaming is breathtaking, it’s clear that the channel still relies on the fundamentals of retail marketing: applying creativity to a solid underlying strategy. Brands and retailers simply need to put the right products in front of the right audiences, keep their promises and offer the best possible customer service. Easy, right?