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What is social business?

Social business uses a social networking community to drive e-commerce sales, and it’s a huge market: by 2027, social commerce is projected to generate $604 billion in sales. An application like Facebook, Instagram, and Pinterest has dedicated “buy now” ads and live streams run by influencers, resulting in e-commerce goods selling out regularly.

Social business has been a game-changer for smaller brands competing in crowded marketplaces. But now, major retailers are jumping on the bandwagon. Walmart, for example, plans to sell its products directly on TikTok through influencers starting in 2021. As you may have guessed, social commerce has grown tremendously in 2020, “Amid the COVID-19 crisis, the global social commerce market, estimated at $89.4 billion in 2020, is expected to reach a revised size of $604.5 billion by 2027, growing at a CAGR of 31.4% during the analysis period 2020-2027.

1. Facebook

Facebook specializes in social commerce. Businesses can create entire “Shop Now” stores, and businesses use Messenger to interact with consumers (both before and after the sale).

With a Facebook store, you can

  • Upload products and product information;
  • Build and customize your store’s item brochure;
  • Market directly from your web page ; 
  • Take care of orders;
  • Run a Facebook advertisement to promote one of your products;

Gain Insights

You start something like this Image Source And build it out as you go. One piece of advice: choose the right products for your target audience and pay attention to product orders. You do not have to post your entire inventory to your Facebook store. Try posting products on Facebook first to see how they are received, repost old items on Facebook, concentrate on your top sellers, and so on.

Experiment to see what helps for you; however, keep in mind that Facebook is a social media network, and not everyone is sold on this social commerce concept yet. Don’t overwhelm your audience with choices, but stick to the basics.

Shopify published a case study on MVMT Watches, which sought to simplify its path to purchase as its social media presence grew. Spencer Stumbaugh, MVMT Watches.

“It’s essential to avoid steps in the buying process. It’s almost like having a new landing page from which a customer can buy immediately.” (via through specify ) So Spencer and also his team launched their Facebook store. The results:

  • Within seven days, about 1,500 people visited MVMT’s Facebook store.
  • In 90 days, about 60,000 users visited the store.
  • The 0.5% conversion rate resulted in more than $15,000 in sales.

These figures were published in 2016, so it is safe to assume that the revenue has increased since then. Additionally, it’s worth noting that MVMT Watches had a Facebook advertising budget that likely contributed to this grip.

Spencer thinks this is just the beginning of social commerce, not just for MVMT Watches.

2. Instagram

Sell physical goods. Around 70% of shopping enthusiasts use Instagram to discover products – at least Facebook’s data. It’s no surprise, then, that Instagram has introduced the Instagram Shopping feature, which allows users to tap on images and Stories to view featured products.

You should have an Instagram business account connected to a Facebook page;

Instagram also offers an in-app checkout feature for a limited number of retailers, including Nike, Outdoor Voices, and Kylie Cosmetics, confirming Facebook and Instagram’s continued focus on social commerce.

3. Pinterest

Purchasable pins were launched in June 2015. At this time, there were 30 million on the website, but just three months later, Pinterest reported that number had doubled to 60 million. According to Shopify, the average order value for sales on Pinterest is $50, higher than any other social media site.

Here’s a look at Pinterest’s commerce flow. Image source Pinterest has partnered with several major retailers.

  • Macy’s;
  • Nordstrom;
  • Bloomingdale’s;
  • Wayfair. 

What’s unique about Pinterest is that a small portion of the content on the site is original. According to one source, 80% of Pinterest content is newly created. This is an excellent advantage for you as an original content creator.

Why is it so popular?

Offline shopping is inherently a social experience. You ask friends and family for their opinions on products, you buy the same brand of household items as your parents, or you go shopping in pairs or groups.

But e-commerce? Not so social by nature

Heidi CohenWhile shopping is essentially a social experience think of the girls shopping at the local mall – online shopping is not social. But regardless of where the purchase is made, many buying decisions involve more than one person, whether a couple, parents and children or friends. Heidi Cohen thinks this may be a big reason why everyone is talking about the concept of social commerce.

With evolving technology, particularly the increasing use of smartphones and social media platforms, online shopping is changing and becoming more social.

Social networks guide 74% of consumers in their purchasing decisions. Consequently, it makes sense to sell your customers instead of trying to lure them to your website.

Make smarter decisions about inventory and product development by asking your customers to vote on the products they’d like to buy.

  • Enhance the number of conversations about your products and your company.
  • Expand the market for your products, reaching new customers you might not otherwise have.
  • Improve product discovery and awareness and personalize customer experience based on known preferences. (Social media sites have a lot of data, right?).

Encourage recommendations and reviews from peers

The benefits are apparent, but an important question remains Does it work?

In an earlier version of an article on the rise of native social commerce from a few years ago, HubSpot made some bold statements, “Remember when e-commerce was the best tactic for building brand awareness, finding new customers and driving sales?” and “Newsflash: The Golden Era Has Ended” (the article has since been updated to focus solely on social commerce, but is still a valuable discussion starter). Is this true? Will social commerce eclipse traditional e-commerce?

The truth is simple: more and more people are using social media to solicit product recommendations and reviews. So, naturally, the concept of native social commerce was born. Here’s the data on its adoption.

Some time ago, Statista published a forecast for global social commerce sales from 2011 to 2015. Image Source According to MarketingWeek, 56% of respondents, like and follow brands on social media to see products. Another 35% do so to get inspiration for their next purchase.

According to Marketer, adoption is growing among retailers in North America. Image Source But do people want to shop on social media? Not really, as this study from a few years ago shows.

According to the same study, this “social commerce boom” is primarily driven by the younger generation. Some 33% of 18- to 24-year-olds say they would like to shop directly on Facebook, 27% on Instagram, and 20% on Twitter. The 25- to 34-year-old age group decreases somewhat: 30% on Facebook. The 54- to 65-year-olds? A disappointing 10%.

Another study

This shows that 82% of online consumers in the United States have not purchased products directly on social media.

Another study found that only 35% of Millennials, who tend to be a tech-savvy audience, would likely use a buy button on Facebook. Only 24% said they would be interested in a buy button on Twitter (which has since been eliminated).

According to Time Magazine, Twitter and Facebook have claimed that about half of their users come to their sites to search for products to buy.

However, according to the Internet Retail Social Media 500 Report released a few years ago, the rate of eCommerce growth through social shopping exceeds the overall eCommerce growth rate in the U.S. by about 10%.

Why so much inconsistency?

We’re still not clear on what social commerce is and isn’t. Is it native social selling? Is it about promoting social interaction during the traditional eCommerce process? Is it buying buttons that lead from social media to the eCommerce website?

Nora Barnes, the Center for Marketing Research supervisor at the University of Massachusetts Dartmouth, says, “We know very little about these buy buttons”. As a consumer behavior expert, I look at it and ask, ‘Who wants or needs this? Who’s going to use it?’ I think Millennials are saying the same thing.

“We’ve been late to digital and social media, only focusing on it in the last 18 months. But we’ve found that using social channels to sell products will fail, and most businesses make that mistake.

What does this mean for eCommerce businesses

That’s the big question here. Should you make changes to accommodate this new interest in social commerce? If so, what can you do today?

The truth is that no one can tell you whether or not you should experiment with social commerce because it is an experiment.

If you can get by without social commerce right now and have higher priority hypotheses to test, go for it. But keep an eye on this “social commerce revolution.” Follow how it evolves, keep up with the latest features, maybe even play around with an account. But do you need to jump on this bandwagon today? No.

However, let’s say you want to experiment with social commerce. The first thing you need to do is research. If you haven’t done any qualitative or quantitative research recently, now is the time to do it. You require to know your target audience, what they like and dislike, how they prefer to shop, where they spend their free time, etc.

The older your audience is, the less likely they will respond to social commerce, as we’ve already established.

Once you have your demographic data, compare it to the demographics of the three social media sites. Here’s a look at Facebook’s Image Source. While Facebook is reasonably well used across all demographic groups, it’s trendy among women and people between 18 and 49.

And Instagram Image Source is especially popular among those under 30 and in the urban population.

And finally, Pinterest is Women still dominate image Source Pinterest, but men are slowly but surely closing the gap year after year.

Choose a social media site to start with. Don’t try to conquer all three from the start.

Finally, optimize endlessly. Double your optimization efforts if you decide to go the social commerce route. Two stores, two user experiences, two product pages, two checkout processes, etc. Be prepared to place in a great deal of work to get this right, mainly because it’s still relatively uncharted territory.

If you want to see the results you’ve read about with big brands, you’ll probably need at least a small budget for social advertising to grow your audience.

Social commerce seems to be a natural, slowly evolving evolution of online buying. Below’s what you should know about social commerce and what you should do next. Not everyone is sold on the concept of social commerce yet. The evidence (and the definition) is conflicting.

Decide if your other hypotheses have higher priority. No rule (yet) says you must participate in social commerce.

Watch how the trend develops and familiarize yourself with the features and opportunities. If you decide to get started with social commerce, conduct qualitative research to understand your audience better, what they like, how they shop, etc.

Compare your target audience data with the demographics of the three social media sites. Select one site that is the best fit.

Optimize, optimize, optimize. You’ve just earned your workload overdo

Consider paid social ads to increase your reach.

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