What is Social Commerce? Complete Guide and Definition

While social media has traditionally been seen as a space for advertising campaigns and influencer marketing, that perception is changing with the rise of social commerce: a shopping experience that takes place entirely on social media platforms, and which puts users only a click or two away from their purchases. 

Social commerce may be a relatively new model, but it’s carved out impressive commercial territory in only a short time. In 2020, the retail social commerce industry was worth $26.97 billion: that figure is expected to double by the end of 2023 and hit $79.64 billion by 2025. 

The industry has plenty of space to grow, too. Social commerce is most popular with the 18-24 age demographic in the US — but in China and Russia, around 50% of all users have made purchases via a social media channel. It’s only a matter of time until Western markets start to reflect that trend.

With so much value on the table, brands can’t afford to ignore the opportunities available on the social commerce landscape. So if you’re prepared to take your business’ next social media step, let’s take a closer look. 

What is Social Commerce?

When social media users find your brand in their feed, it can be easy to capture their attention with eye-catching graphics or mentions from influencers. But, getting them to actually make the jump to purchasing a product via an ecommerce channel can be more challenging. 

Social commerce addresses that challenge. Instead of leaving the social media platform, users can complete their entire purchase on the website or app, quickly and conveniently.

Social commerce includes elements of other ecommerce strategies, but the term ultimately refers to the seamless, end-to-end integration of the shopping process within a social media experience — from product discovery right through to purchase.

Social networks have developed commercial tools for this very purpose in the form of virtual storefronts which showcase product images, prices, and even review scores that help users make decisions. Many of these storefronts have been revamped and optimized in recent years — thanks in part to factors like the pandemic pushing users towards easy, frictionless online purchasing experiences. 

Why Social Commerce?

Social commerce isn’t just a ‘nice to have’ option for your brand. Its value is driven by the increasing effectiveness of social media as a sales channel. Research suggests that up to 22% of customers actually prefer to discover new products on their social media feeds, with 71% of Gen Z (18-24 year olds) stating that their feeds are where they discover new products most frequently.

There’s a reason for these figures: people like using social media, not least for the engagement that it allows with popular accounts. Social media influencers are an important and ubiquitous part of the online commerce landscape, and influencer marketing contributes significantly to purchasing trends.

The rise in influencer marketing matches the growth in social commerce. In 2022 the influencer marketing industry was worth $16.4 billion, with research suggesting that 90% of social media users find the strategy an effective retail tool. That kind of marketing power gives influencers a unique advantage in the space – and promises to take an effective social commerce strategy to the next level.    

While the exact facts, figures, and marketing strategies vary by platform, the data is clear: across all demographics users are becoming increasingly invested in social media as a legitimate retail tool. They will likely continue to invest as commerce channels grow more streamlined and accessible. Of course, there’s still work to be done, and in a competitive marketplace it will be up to brands to make available opportunities work for them.

Benefits of Social Commerce

If you need a nudge towards developing and implementing social commerce, let’s take a closer look at some of the benefits your brand might be missing out on:

Reaching customers

‍Data suggests that 57% of the global population, or 4.59 billion people, use social media — with that number increasing to 5.17 billion by 2024. The sheer size and scope of the social media customer base means that social commerce can help brands reach customers in every corner of the world.

Targeted sales

‍Social media is an expansive goldmine of customer data, and brands can use that data to target very specific customer demographics. Social commerce takes that dynamic further, since it can ensure that you put products directly in front of customers that are more inclined, and ready, to make a purchase.

Enhanced interactivity

‍Shopping via social media is a more interactive, engaging experience than other eCommerce channels. Customers can find information about products and businesses, read and leave reviews, and customize their orders – all from the comfort of their account. That interactivity has the added bonus of enabling brands to gather data on their customers.

Streamlined purchases

‍Brands can tailor their social commerce process to streamline purchases and reduce cart abandonment. Practically, this might involve features such as “buy now” and other call-to-action buttons, virtual storefronts, messaging functionality, category tags, and in-app reviews – all of which speed up the journey to check-out, and allow users to remain on the social media platform throughout the shopping experience.

Higher profitability

‍It’s no secret that online sales are big business. By 2027, research suggests that the total revenue from US ecommerce sales will have reached $1.6 trillion, and will continue to grow dramatically as more people adjust their shopping habits. Getting your social commerce strategy in place early is the best way of capturing customers’ attention, maximizing profits, and driving future sales.  

Quicker feedback

‍Social media represents a direct line between you and your customers, which means you can find out what’s working about your social commerce strategy, and what’s not, as quickly as possible. The feedback and data that social commerce provides is invaluable, and the versatility of social media platforms mean that you can course correct much faster than traditional ecommerce channels.  

Knowing your audience

‍It pays to know who is buying your products. With social commerce so popular amongst Gen-Z and Millennials, your brand has a ready-made demographic to tailor its ads, offers, and other commercial innovations for. That’s not to say that you should neglect other groups, but social commerce is an undeniable opportunity to convert Gen-Z users to loyal customers.

Social Commerce vs eCommerce

While it’s fair to call social commerce a subset of ecommerce, the two are not the same. As we mentioned earlier, ecommerce channels require users to leave the platform they’re on to make their purchases. This process can slow down the shopping experience, and even end up frustrating users to the point that they abandon their carts. Ecommerce sites are typically built on third-party platforms, like Shopify or WooCommerce, which involve their own purchase process.

Social commerce doesn’t require a third party site, because the social media platform provides the commercial architecture itself. Users find brands via their social feeds, browse products, and ultimately submit payment details and make purchases, entirely from their social media account (and on whatever device they happen to be using).

NB: Social commerce shouldn’t be confused with social selling. While both rely on social networks, social selling refers to the process of cultivating relationships between brands and potential customers in order to generate sales at some point in the future. Social selling can involve online and offline sales, but obviously relies on social media to facilitate the necessary relationship connections.

Social Commerce Examples

Your brand won’t have to look far to find social commerce opportunities, with social commerce tools available on some of the largest networks, including Facebook, Instagram, TikTok, Snapchat, and Pinterest. For inspiration let’s look at some notable social commerce examples:
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TikTok Shop

Launched in 2021, TikTok Shop is a social commerce partnership with Shopify which enables Shopify merchants to use TikTok videos (and livestreams) to sell products to their audience. Merchants need to meet certain criteria to open a TikTok Shop account, but then can create and customize virtual storefronts on the app which can be used to make purchases. Users can access the storefronts via a ‘Shopping’ tab on the merchants TikTok accounts, or shop specific products linked in videos.

Facebook Shops

Originally launched in 2016, and revamped in 2020, Facebook’s social commerce virtual storefront is called Facebook Shops. It allows brands to upload their product catalogs, tag their products in posts, and handle transactions through the Facebook platform. Shops are accessible through a tab on a merchant’s account page, and each product entry includes a picture, description, and outward link to an official website.

Pinterest Shopping List

As a combined social network and search engine, Pinterest offers social commerce through its Shopping List service, which launched in 2021. Shopping List not only facilitates in-platform sales but allows users to ‘pin’ certain products so that they can come back later and make purchases. The pins also inform users of shipping costs and reviews, and send alerts for price drops.

How to Get Social Commerce Right

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Social commerce is rising, but not every approach is going to work for every business. Your social commerce strategy will only be as effective as your ability to implement it, so to maximize its impact, you’ll need to consider the following factors:  

Engagement: Since we’re in the social media game, it makes sense to push engagement as part of your social commerce strategy. Use the capabilities of social media platforms to showcase your products: make video demonstrations, upload 360-degree photos, host Q&A sessions, and invite feedback from users. The more creative and engaging your content, the more likely you’ll capture customer attention.

Explore social listening: One of the most useful features of social media is the user-generated buzz that grows around industries, brands, and topics. By engaging in social listening, your brand can use that buzz to improve its social commerce offering. In practice, this means monitoring social media channels for mentions of your brand or your product, and then analyzing that information to make meaningful improvements to infrastructure.

Influencer partnerships: Personalities can deliver an energy boost for your brand so it’s worth identifying influencers that you could partner with to enhance your social commerce strategy. Influencers can help you target specific customer demographics, offer product demonstrations and unboxings, or make creative sponsored posts – all of which can include a seamless link to your virtual storefront so that customers can make purchases.

UGC: Influencers aren’t the only in-platform resource you can use to boost your social commerce strategy. When social media users buy one of your products or mention you positively in a post, switched-on brands can harness that user-generated content (UGC) to boost social commerce. UGC comes off as highly authentic and is easily differentiated from the stream of advertising content that typically accompanies brand marketing. As an added bonus, UGC doesn’t have to cost anything – all you need to do is find it.

Livestreams: The concept of live selling has been around for decades in the form of ‘home shopping’ television shows, but social media has revived the format for 21st century customers in the form of the livestream. Typically hosted by an influencer, livestream shopping is a dynamic experience for users, who can participate in the conversation via live chat, offer feedback, and make purchases instantly. Effective livestream events humanize brands, and can create a desirable ‘fear of missing out’ (FOMO) exclusivity through timed discounts and offers.

Build momentum: While it’s one thing to build your social commerce capabilities, encouraging your customers to climb on board can require some initial momentum. Make sure you make the right move: talk to Aspire to find out more about how to weave influencer marketing into your social commerce strategy, what approach is going to suit your brand best, and how to drive the momentum you need to get your customers shopping.

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