The Future Of E-Commerce: Is Social Commerce Taking The Lead?

E-commerce has changed the way we shop forever, taking customers off the high street and keeping them in the comfort of their own homes. With e-commerce, customers can buy and sell goods and services online rather than traveling to a physical store, enabling them to shop from their living room couch. This has taken businesses into a digital world and reduced the number of physical shops on high streets. However, for the established Gen Z social media users, ‘social commerce’ (the combination of social networking and shopping) has had a significant uptrend in recent years.

Social commerce allows users to shop online while experiencing a social atmosphere, almost like a digital shopping mall. Unlike traditional e-commerce, social commerce uses influencers, user-generated content, recommendations, and social networking data to personalize the customer’s shopping experience.

Brand Advantages of Social Commerce

From a business perspective, social commerce is an exciting avenue for customer engagement and retention. Through social media, businesses can reach out and connect with potential customers, promoting their products in a more tailored and interesting way. Social commerce encourages real-time interaction, building more of a community through meaningful customer engagements. For customers, the buying experience is tailored and interactive, increasing the likelihood of retention.

A fantastic example of social commerce success is the Squishmallows hype on Tiktok. Videos of customers enjoying the brand’s cute toys began to generate an online sensation. A whole ‘Squishmallows’ community soon appeared, with people enthusiastically showing off their large collections. They discussed the toys in the comments, engaging over rare items, talking about new releases, and bonding over the brand. Many customers quickly went from owning one toy to having a whole collection, demonstrating strong brand loyalty.

By harnessing user-generated content and influencers like Squishmallows, social commerce establishes trust and credibility, enhancing brand community. With community comes word-of-mouth promotion, one of the most effective methods of marketing. Through the varied share options social media sites have - posting a Story, making a Reel, starting a Thread - users can easily share their new product with their followers, which in turn, driven by FOMO, brings people to the brands' social media pages. This highlights the brand image and initiates a positive chain reaction.

Customer Advantages of Social Commerce

Compared to e-commerce, social commerce offers a convenient shopping experience that combines detailed product information, influencer opinions, genuine reviews, and varied purchasing methods - all on one platform. From initial advertisement through to purchase, the whole chain is available online and easily tracked. Gone are the days when several tabs of research and background checks were required to purchase one product. For the fast-paced, social-media-savvy Gen Z audience this method of purchasing is ideal.

Another key advantage to social commerce is that product advertisements are specifically tailored and personalized. As a result, consumers no longer see irrelevant advertising content on their social media profiles. Instead, adverts are more engaging, useful, and specific to individual interests, increasing the likelihood of consumer engagement. Watching make-up artists on Instagram reels will lead to make-up brands knowing who could be interested in their latest products – they can target widely-watched make-up artists, they can follow who watches the videos, and so on, thus developing a clear demographic profile of potential buyers.

In social commerce, customers can socialize as they shop. The ‘comments’ section on posts allows customers to discuss their shopping experience in real-time, just as you would with your friends in a physical store. Purchasing becomes social again, rather than the solitary experience of e-commerce. Just like in a physical store, users buying via social commerce will have friends or similar people around them, digitally sharing views and opinions about the products they want to purchase.

This, in turn, builds a strong brand community. A network of interested and engaged customers connects over product discussion, providing the brand with an engaged audience.

Augmented And Virtual Reality Integration Is Just Around The Corner

Online shopping is gradually welcoming augmented and virtual reality technology. Taking social commerce a step further, AR and VR technology allows users to engage in virtual purchasing experiences, enhancing the real-time aspect of social commerce. Although not yet fully implemented for a wide audience, as AR and VR become increasingly mainstream, we can expect to see it filter into our shopping experience.

Overall, with its Gen Z popularity, e-commerce is slowly blending into social commerce - a more personalized alternative that builds business community and improves the purchasing experience for both brand and consumer. Social commerce prioritizes the connections between brands, customers, and influencers. As we look to the future, WPRO is embracing this new branch of commerce for our clients.