Since the beginning of the 2000s, social commerce has made huge advances in pop­u­lar­i­ty. In the early days, just a handful of companies were testing how they could implement strategic marketing goals like a tighter customer con­nec­tion and product ad­ver­tis­ing. Now, social media networks are hugely popular among customers and brands. Facebook, Instagram, YouTube and co. enable even smaller and middle-sized busi­ness­es to directly sell their products to consumers.

What is social commerce?

The term “social commerce” was coined by tech­nol­o­gy blogger Steve Rubel and venture cap­i­tal­ist David Beisel back in 2005/2006. It describes digital commerce that has a social component. In this way, companies are able to attract potential new customers by utilizing network-based com­mu­ni­ca­tion platforms. At the core, the de­f­i­n­i­tion of social commerce describes a form of modern rec­om­men­da­tion marketing. It’s like Beisel said:

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“What better way to advertise a product than to have a friend recommend it to you?”

David Beisel, Source: https://genuinevc.com/2005/12/06/the-be­gin­nings-of-social-commerce/

When it comes to social selling, the following aspects play an important role:

  • Active par­tic­i­pa­tion of the customer (for example, through comments, likes, shares, etc.)
  • Direct in­te­gra­tion of the customer in the design and de­vel­op­ment of products
  • A personal con­nec­tion and good com­mu­ni­ca­tion among customers – word of mouth via the internet, mes­sen­gers, or apps is par­tic­u­lar­ly important, as it helps brands boost sales and customer en­gage­ment through offers or com­pe­ti­tions
  • Personal and emotional long-term con­nec­tion between the customer and the brand

Social commerce harnesses these factors to reach its goals: social talk helps to advertise products and the brand. By tying a product to a target audience, entire com­mu­ni­ties can be built and fostered by a single brand. At the same time, social commerce is all about sharing product and brand in­for­ma­tion with customers. Busi­ness­es can even recruit brand am­bas­sadors for their special events and campaigns. With social media usage spreading, customer con­ver­sion has become an in­creas­ing­ly important task among retailers. But how can you turn a targeted (and in­ter­est­ed) in­di­vid­ual into a potential customer of your products? Brands that succeed at turning a target audience into customers are said to have high con­ver­sion rates.

As social media became in­creas­ing­ly dif­fer­en­ti­at­ed, marketing methods evolved. With the success of Instagram, for example, the con­nec­tion between creators and fans has moved into the fore­ground. That’s where in­flu­encers come in. In­flu­encers and creators are often treated like idols across popular social media apps. This has created an entirely new arm within marketing – in­flu­encer marketing – which harnesses the en­dorse­ment of branded or sponsored products by in­flu­encers. It’s a more organic way of achieving con­ver­sions compared to the often dis­rup­tive ad­ver­tise­ment.

These strate­gies are useful because they boost the ac­cep­tance of sponsored posts and intensify the con­nec­tion between the customer and a product. Customer will­ing­ness to engage with a product and their desire to own it increase. The emotional in­volve­ment and direct link to a product (for example, via a web shop link) make the pur­chas­ing ex­pe­ri­ence much more efficient.

But trust remains the most important factor in turning potential customers into buyers. By using social media, brands can establish a more personal con­nec­tion with their customer base.

Social proof is another important aspect of social commerce. Customers tend to trust in the col­lec­tive in­tel­li­gence: if other users in a community purchased and liked a product, it cannot be a bad product. That makes product likes, comments, and positive customer reviews all the more important as part of a suc­cess­ful social commerce strategy. If a product has positive reviews, other customers are more easily convinced to purchase the same. That psy­cho­log­i­cal and social phe­nom­e­non is par­tic­u­lar­ly evident on Amazon: Products with few or dom­i­nant­ly negative reviews rank lower in search results and are rarely bought. Sellers with positive reviews, on the other hand, profit from the social con­clu­sive­ness and tend to make more sales.

Selling on social media – what are the options and tech­niques?

Small and mid-sized busi­ness­es can choose from a wide range of social networks to advertise and sell their products on. The most important platforms for social shopping include: Facebook (founded in 2004), Twitter (founded in 2006), Instagram (founded in 2010), and Pinterest (founded in 2010).

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Social commerce on Facebook

It’s easy to sell your products and services on Facebook. A business or fan page with images, graphics, videos, and text will usually suffice to get you started on the popular social network. Facebook even rolled out a “shop now” call-to-action button so customers can check out straight away. But there are also plenty of spe­cial­ist e-commerce tools brands can choose from such as dynamic ads. Dynamic banner ads are great tools to au­to­mat­i­cal­ly adapt ad content and ad campaigns to specific target audiences. With over 2.4 billion monthly active users globally, the potential reach of these marketing tools is enormous. Ac­tiv­i­ties relating specif­i­cal­ly to selling on Facebook are also referred to as f-commerce.

Image: Bershka example of social commerce on Facebook
Facebook post by fashion brand Bershka: Social Talk campaign (New Year’s Eve) with shop link / Source: https://www.facebook.com/bershka/
Social Buy Button
Turn your followers into customers
  • Sell on social media in minutes
  • Manage it all from one platform
  • Works with any product or service

Social commerce on Instagram

According to Instagram’s own data, the popular imaging app now has over 1 billion users worldwide. What started with photos and short video clips has turned into an app that now features op­por­tu­ni­ties for extended sto­ry­telling using Instagram Stories. Even special event live streams are possible. Favorite ad­ver­tis­ing tools include shopping ads, Stories ads, video ads, and swipeable carousel ads. Instagram is well-known for its in­flu­encer marketing which pre­dom­i­nant­ly engages the younger gen­er­a­tions – 60% of its users are aged 18 to 24 years.

Lifestyle brands (e.g. those in en­ter­tain­ment, fashion, beauty, design, and food) are par­tic­u­lar­ly fond of using the app to promote their products. According to Adobe research, Instagram now drives 10.7 percent of social referral to retail sites. Another study found that brands were able to boost their traffic by 1,416% using shoppable posts on Instagram.

Image: Bershka social commerce example on Instagram
Instagram Stories by fashion brand Bershka (Meet our Bershka style creators, quiz on sus­tain­abil­i­ty) addresses users directly and includes shop links / Source: https://www.instagram.com/bershka­col­lec­tion
Tip

Learn more about "Live streaming shopping: the future of e-commerce?" in our Digital Guide article on the topic.

Social commerce on Pinterest

As of 2019, Pinterest, the online pin board for graphics and photos, had over 300 million users globally. Pinterest is a great platform for people actively looking for product and shopping in­spi­ra­tion. Given its focus on hobbies and DIY, it’s hardly sur­pris­ing that lifestyle and fashion are among its dominant cat­e­gories. Brands can now easily link their images (called Pins) to their web store. And in 2019, Pinterest of­fi­cial­ly unveiled its Pinterest Ads across multiple countries. Marketing and sales on Pinterest have since ben­e­fit­ted from the use of carousel and video pins. As part of a social media marketing strategy, Pinterest is primarily used to drive traffic to a website because ads can be connected to an online store. Women are the dominant target group on the platform, but its share of male users is growing.

Image: Bershka example of social commerce on Pinterest
Pinterest board by fashion brand Bershka with audience-targeted product pre­sen­ta­tion / Source: https://www.pinterest.de/bershka/bershka-horror-cinema/
Social Buy Button
Turn your followers into customers
  • Sell on social media in minutes
  • Manage it all from one platform
  • Works with any product or service

Social commerce on Twitter

The micro-blogging platform Twitter now has more than 330 million monthly active users. Its claim to fame is that it’s always up to date. Twitter is in­ter­est­ing for retailers and brands whose audiences actively use the platform. That includes media, local services, and service providers. Many user profiles feature links to online stores. Twitter lets busi­ness­es embed campaign and product videos. But not all companies use Twitter for commerce; many busi­ness­es use it to boost their image and connect with marketers and customers. By using Twitter, busi­ness­es can engage in con­ver­sa­tion, and discuss their brand and products using tweets and hashtags.

Image: Bershka example of using social commerce on Twitter
Twitter tweets by fashion brand Bershka: in­tro­duc­tion to its products combined with social talk (What’s your 2020 song?, Super Bowl) / Source: https://twitter.com/bershka

The six pillars of social commerce

To be suc­cess­ful in social commerce, a dedicated strategy should be in place. It’s im­per­a­tive to establish a loyal community that regularly visits your company’s web pages and clicks on your calls-to-action. Here are the six key pillars of social commerce to look out for:

  1. Relevant content: Companies should provide content that is in­ter­est­ing to their customers. Content should be high in quality and optically engaging. To win the daily fight over customer attention, it’s important to match your content to your target audience(s). Content should never blandly focus on products or con­ver­sion rates. Social commerce content in­creas­ing­ly provides added value for customers, e.g. by offering advice, tips, and tricks. When it comes to cross-channel and multi-channel concepts, content should be created to suit the chosen platform. Yet, it must work in synergy with posts across other channels.
     
  2. Community: The basis of social commerce is the community that you want to establish a long-term re­la­tion­ship with. Busi­ness­es should nurture their audiences and harness the fact that customers talk to one another on social media. A great way to engage your audience is by speaking to the in­di­vid­ual customers. That may sound time-consuming but it tends to pay off. Events and special ac­tiv­i­ties provide further op­por­tu­ni­ties for bonding with customers. Brands and retailers should always be easy to reach, whether a customer is demanding a return or has product questions.
     
  3. Com­mu­ni­ca­tion: By en­cour­ag­ing com­mu­ni­ca­tion and ac­tiv­i­ties in a community, busi­ness­es get to know their customers and are able to optimize their products ac­cord­ing­ly. Likes are an excellent way to measure pref­er­ences and target them sub­se­quent­ly. Social commerce can even develop a dynamic whereby customers are actively included in the product de­vel­op­ment, ensuring the im­prove­ment of products. After all, many new ideas and services emerge through con­ver­sa­tion.
     
  4. Create and strength­en con­nec­tions: Busi­ness­es should be handling social media with con­fi­dence and take an active role in shaping and man­i­fest­ing the con­nec­tion to their customers through dedicated ac­tiv­i­ties. In other words, it’s helpful to become an active player within the social media landscape and create a sub­stan­tial basis for social commerce. The basis of a multi-channel concept can occur at three levels: pro­fes­sion­al (Xing, LinkedIn), social (Facebook, Instagram), and in­for­ma­tion­al (Twitter).
     
  5. Context through data: The success of a social commerce strategy is measured in data. This helps to put results into context and uncover customer habits in the real and virtual world. Defining the audience you want to reach is referred to as targeting. Data on potential customers’ search and shopping behaviors and their social media use are useful to help brands target them in the future. With mobile end devices, real-time tracking is easier than ever before. Brands can now track a customer’s ge­o­graph­i­cal location – also referred to as geo-targeting. One of the big ad­van­tages of social commerce’s data focus is that compared to classic ad­ver­tis­ing (TV, print), a company no longer targets just anyone but can single out customers who are more likely to purchase their products. In the long term, this saves busi­ness­es money. But the customers’ needs must remain central to the data-based context.
     
  6. In­no­v­a­tive commerce through dig­i­tal­iza­tion: Social commerce forms part of an internet-based sales strategy and as such is able to offer a vast portfolio of products and services. Customers are no longer re­strict­ed to opening times. Similarly, brands can share emails and social media calls-to-actions on weekends. The event of social commerce has thus created an entirely new level of flex­i­bil­i­ty across many sectors, including business-to-business (B2B) and business-to-consumer (B2C) com­mu­ni­ca­tion. Amazon is a great example because the e-commerce group regularly expands access to its product portfolio using digital tools (e.g. voice assistant Alexa) extending far beyond tra­di­tion­al retail ap­proach­es.
Image: Bershka example of a multi-channel concept for social commerce
A multi-channel concept by fashion brand Bershka in which all channels link to its store

10 rec­om­men­da­tions for a suc­cess­ful social commerce strategy

For a suc­cess­ful and sus­tain­able social commerce strategy, here are our top 10 rec­om­men­da­tions:

  1. Explore the needs and desires of your target audience(s) and then cater to them.
     
  2. Engage with social media and find out which platforms suit your brands and/or products the best; match your brand’s goals to the right social media channel. Due to the multitude of social platforms and dif­fer­ences in users’ age groups across them, your preferred audience targeting strategy should match the platform.
     
  3. When de­vel­op­ing a social commerce concept, consider cross-channel strate­gies.
     
  4. Nurture the dialog with your customers and potential customers; pay attention to the com­mu­ni­ca­tion methods employed.
     
  5. Com­mu­ni­cate with your customers regularly and au­then­ti­cal­ly. Be trans­par­ent.
     
  6. Invest in the quality and added value of your content.
     
  7. Say “yes” to con­ver­sion, but not by any means necessary. Maintain a balance between “social” and “commerce.”
     
  8. Make a long-term plan for your efforts and in­vest­ments (e.g. channel and community main­te­nance, content de­vel­op­ment, planning of multi-channel campaigns, etc.).
     
  9. Prepare a de-es­ca­la­tion strategy to address com­mu­ni­ca­tion or customer service issues. Brace yourself for criticism of your products or your entire company/brand.
     
  10. Pursue a data-based eval­u­a­tion of your social media success by studying your customers’ shopping and community behaviors. An eval­u­a­tion will help to optimize your brand’s en­gage­ment on social channels, but can also be a great way to help you develop audience-centered products and services.
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