The convergence of social platforms and e-commerce has created an environment where shopping experiences are integrated directly into social media feeds. Social commerce is not a passing trend; Deloitte forecasted social commerce sales past $1 trillion globally in 2023.
Key points:
- Social media is now a crucial channel for product discovery and purchases.
- Influencers drive social commerce through consumer engagement.
- The rise of digital wallets and seamless payment methods aligns with the social commerce trend.
As users spend more time on platforms like Instagram, TikTok, and Facebook, brands are tapping into these spaces to reach consumers where they are most engaged. The change in shopping behavior signifies a broader shift towards social commerce, influencing the business-consumer relationship.
What is social commerce?
Social commerce integrates shopping and e-commerce functionalities directly within social media platforms. It creates a shopping experience where users can discover, research, and purchase products without leaving the platform. Social commerce leverages social interactions, influencer recommendations, and targeted advertising to convert engagement into sales.
Here’s how social commerce works:
- Product discovery: Users encounter products through posts, ads, or influencer recommendations.
- In-platform purchasing: Shoppers can complete their transactions directly on the social platform.
- Social proof: Comments, likes, and shares from peers influence purchasing decisions.
Social commerce is distinct from traditional e-commerce because it combines the social aspects of online communities with the convenience of digital shopping. It reduces the steps between discovering and paying for the product.
Social commerce vs e-commerce: What’s the difference?
While social commerce and traditional e-commerce involve online transactions, the two are distinct in their execution and consumer experience. Traditional e-commerce typically requires consumers to visit a dedicated online store, whereas social commerce embeds the shopping experience directly within social media platforms.
Instant gratification boosts e-commerce sales
The desire for instant gratification is a powerful motivator in social commerce. Social media platforms provide a shopping experience that is quick, convenient, and integrated into daily browsing habits. Instant access to products and services encourages impulse buying, driven by the platform’s immediacy.
Below are the key drivers of instant gratification in social commerce:
- Immediate access: Products can be purchased with just a few taps, fulfilling the desire for quick transactions.
- Real-time updates: Flash sales, limited-time offers, and live-stream shopping events create a sense of urgency.
- Peer influence: Seeing friends or influencers purchase and endorse products can trigger immediate buying decisions.
Instant gratification aligns with social platforms. The ease of product access, coupled with the persuasive power of influencers, drives users to act quickly.
What does social commerce mean for payments?
Digital wallets are gaining popularity as they integrate easily with social media platforms, offering users a fast and secure way to pay. However, traditional card payments remain an option for many. Businesses must be ready to handle a variety of payment methods to succeed in social commerce.
| Payment method | Integration level | Popularity among users |
|---|---|---|
| Digital wallets | Medium | Growing |
| Credit/Debit Cards | High | Widespread |
| Digital currencies | Emerging | Niche, but expanding |
Integrating payment service providers (PSPs) that can handle high transaction volumes and diverse payment methods will help businesses benefit from social commerce. These PSPs must be compatible with digital wallets, currencies, and traditional card payments. Payment flexibility allows companies to serve consumer payment preferences.
The bottom line
The creator economy, driven by influencers, has amplified media consumption on social platforms, making these channels ideal for capturing potential customers. More businesses will attempt to grow their online presence and sales through these platforms. As social commerce develops, it will influence consumer payments, requiring e-commerce platforms to adapt and integrate more advanced payment methods.