What is social commerce and how does it work?

In just one day in October 2021, two Chinese celebrities, known as the Lipstick King and Viya, sold $3 billion worth of goods via livestreaming [1]. Such is the power of social commerce! And it’s spreading like wildfire across the planet, with countries like Thailand, India and China taking the lead. According to Accenture, global social commerce sales will triple over the next few years, and it is estimated they will reach $1.2 trillion by 2025.

In this article, we take a deep dive into the topic, explain what’s involved and share our tips and insights into how to make social commerce work for you.

The difference between social commerce and e-commerce

Social commerce is the process of selling goods or services using social media. You can either use social media to drive users to your e-commerce website, or you can sell directly on social media platforms.

The main difference between e-commerce and social commerce can be found in the way in which people behave when it comes to purchasing. People buying on an e-commerce site make their buying decision based on product information only.

With social commerce brands have less control over how customers think about their products as other customers and influencers take over. They talk about products from their own perspective, share highly visual content and encourage people to buy (or not) the product in question. People go to social media to look for ideas and are open to considering new products or brands. They enjoy the experience of browsing and being inspired, as opposed to focusing purely on product presentation.

Social media platforms offering social commerce

The main social media platforms offering social commerce are Facebook, for older shoppers; Pinterest, for an older audience seeking inspiration; Instagram, for awareness and community building - particularly with people in their 20’s or 30’s and TikTok and Snapchat for a younger audience. Digital marketplaces such as Amazon and eBay can also be considered part of the social commerce ecosystem as brands can build awareness here and drive traffic to their websites.

All these platforms don’t work in the same way. Let’s image you live in a large city; you are a car fanatic, and you love working on old cars in your spare time. Instagram knows this, so does Facebook. But Facebook will target you in a much broader sense by comparing you to lookalike audiences and sending you ads for holidays for example. Instagram on the other hand is much more tailored to your hobby and how you interact with their platform. So, the ads you see there will always be related to repairing old rusty cars, vintage car events or buying spare parts for example. You will rarely see any ads that pique your interest like this on Facebook.

Improve your digital branding with Social Media Marketing

Social commerce needs to be content driven

The key things to consider when implementing social commerce

Social commerce needs to be content driven. This involves knowing your audience and understanding their needs so that you can provide users with content that is relevant to them. When producing content, it is important to tell the same brand story on both social media and your e-commerce site. For example, if you present cosmetics in a certain way on social media, users need to experience the same thing when they land on your e-commerce site too. And by using the data and insights you collect along the way; you can then provide consumers with a more personalized experience when consuming your content.

Furthermore, from a technical standpoint, you need to give users a seamless User Experience (UX), when they jump from a social media platform to your website using, in most cases, their smartphone. This means making things easy for them. If for example your purchasing process is complex or slow, consumers will more than likely switch to another brand.

One of the most important areas to think about when implementing social commerce is Product Information Management (PIM). Your PIM solution needs to be capable of distributing your product information not only to your e-commerce site but also to your social media channels via Application Programming Interfaces (APIs).

This involves choosing the right Master Data Management (MDM) tools to ensure your company’s shared data is consistent and accurate. You also need to choose a Commerce system with a data interface that connects to the different social media platforms, enabling them to take over order information and related tasks so that users get all the information they need easily. And you also need a Marketing Automation solution that serves social media by for example leading users to specific social ads on Facebook.

Getting social commerce right involves asking whether your products or services are the right fit for a social media sales model. This means being honest with yourself about whether you can visually promote what you are selling. If you are in white goods such as fridges, then social commerce won’t be the right option for you as the most common scenario for buying a new fridge is when our old one breaks down.

Products that can be easily promoted with impactful images or videos, such as those offered by fashion, sports, or home décor brands, fit perfectly into the social commerce model. Nike for example regularly produces great fresh content such as their latest collaboration with a Paris-based designer resulting in a perfect pink trail shoe with a hint of luxury. The brand also recently published an inspiring reel (short video) of the first Muslim-American woman to win an Olympic medal. The empowering music and the narrative around dispelling stereotypes on the world’s largest stage creates a lot of impact for the brand.

Social commerce therefore makes it easier for brands to build engagement, gather feedback on their products and get close to their customers, cutting out the middleman. Take Tesla, the electric vehicle manufacturer. They are currently in the process of closing their physical showrooms all over the work because people are now buying their cars directly on the brand’s website.

More and more brands are using influencers

The role of influencer marketing in social commerce                                                                                

More and more brands are using influencers, particularly micro-influencers, to help build their social commerce business. Micro-influencers are content creators that have a subscriber count between 1,000 and 100,000 as opposed to influencers (or macro-influencers) who are considered to be celebrities, as they have over 100,000 followers.

Micro-influencers however record higher engagement rates as they interact more with their audience and have a strong community. They are also less costly than a macro-influencer and are seen as being more authentic and therefore trustworthy. A micro-influencer can a serve niche market very well. Let’s imagine you work for a B2B industrial tooling company. Collaborating with a micro-influencer in this field of expertise would enable you to indirectly share content with a small subset of a targeted demographic that is interested in renewing their tools for a specific manufacturing process.

Influencer marketing is an important part of your social commerce strategy and enables you to succeed at each stage of the sales funnel. Often brands make the mistake of thinking that influencers are only useful during the awareness phase. However, they can often help during the conversion phase, by sharing a discount code for the latest smartphone or asking people to sign up to see the pre-release of a new fashion collection for example.

One way of looking at influencer marketing is by seeing it as a collaboration between a brand and an influencer to showcase the brand and one or multiple products or services in an authentic way. Choosing the right influencer for your brand means finding someone with real knowledge of your business domain. It involves diving deeply into the person’s audience and asking if it is trustworthy while reviewing the level of engagement of their followers. The person you select will be someone other people look up to, respect and go to for inspiration.

Some brands are opting for the growing community of Niche Internet Micro Celebrities (Nimcels), people who are known online to a small select but dedicated group. Basically, we are talking about experts who do not have a lot of followers but are considered as celebrities within a niche.

6 questions to ask when developing your influencer strategy

When putting together your influencer strategy it is important to ask the following questions:

  1. What are the trending topics in our industry sector?
  2. What audience do we wish to target?
  3. What content types are relevant? (Videos, photos, blog articles…)
  4. What social media platform is suitable?
  5. What is the key message?
  6. What type of influencer does the brand need?

So, if you are a merchant keen to get started with social commerce, remember there are costs and work involved. Firstly, start by looking at your product pages on your website and check that they are ready, in terms of content and product presentation. As we mentioned earlier, if people have a great experience on social media, they will expect to have the same experience when they land on your website.

Then put someone in charge of the social media side and ensure they identify what part of your content is relevant to your chosen audience. Make sure they either select or produce stunning photos, videos and product descriptions that tell a story about your product in a short format suitable for social media to build engagement. And finally, allocate a budget and schedule to the project to ensure that you reap the benefits of your investment over time.


[1] Source: "This is how to shift $3bn of product in 12 hours" published on www.verdict.co.uk, October 2021

Want to learn more?

Contact us