The term ‘Social Commerce’ was coined in 2005 by the Facebook crew. Although it’s been an on / off again topic, the changing consumer behaviours triggered by the pandemic have put it back under the spotlight. We all know that having a holistic view of commerce is more important than ever, from point of sale to point of touch and offline to online. Social media is key for point of touch, playing a critical role across the customer experience and driving performance. For some brands, social has actually become central to the whole brand journey - from awareness and discoverability, to purchase and retention. We’ve mapped 5 key areas in which social media plays a crucial role for commerce.
Social media storytelling
From people to brands, we are all on social media to tell a story. Ideally, one that is compelling enough to resonate with an audience, create word-of-mouth, set trends, generate discoverability, and ultimately sell something - directly or indirectly.
Today commerce is embedded into everything we do, and on social media we are competing in an over-saturated market. Everyone’s aim is to grab the audience's attention, and when the content is likeable, we fight for more of that attention organically and through paid content. Storytelling is a commodity that we all have to pay to produce and amplify, and it ultimately drives awareness and produces bottom-line results for businesses
Storytelling has an indirect impact on commerce. Many brands are still exploring how to play better on this field, especially those who have been focused on a campaign-based approach. FMCG is one of them, where the bottom-line result is a sales increase following the launch of a campaign. These campaigns are not deeply tied to data, journeys or personalisation, but related to mass awareness instead.
Influencer marketing
The influencer marketing industry has evolved, and current societal trends have done nothing to stop it in its tracks. Influencers or key opinion leaders play an important role on social media and therefore in commerce. The good old days where influencers promoting brands caused a buying frenzy with their audiences are (kind of) gone. Those influencers were playing on the upper funnel activities, building awareness, but brands quickly realised that on the long term, throwing money at this type of media promotion was not helping spike sales, at least not how it used to.
A more performance-driven approach was needed, and brands like Daniel Wellington set the standards for affiliate or CPS related campaigns. Instead of working on a campaign-based approach with influencers, they nurtured the relationship with influencers over time, building long term partnerships that lead to a higher impact on commerce, both off and online.
Live shoppable experiences are booming, and are using influencers in an intelligent way to activate not just the product and brand awareness, but also the social media commerce conversation.
The Asian market is leading this change, with key opinion leaders replacing social influencers. But how is the west positioning itself in relation to Asia in this new social commerce trend? According to Coresight Research, the U.S. live streaming market is expected to reach $11 billion by the end of 2021 and hit $25 billion by 2023. The Middle East has started to see some great results with live shoppable, especially in the fashion and beauty industries, embracing the influx of influencer marketing, social media and commerce.
Performance media
Once upon a time, what we meant by “Digital media” was basically just Google products, but with the arrival of social media, the classic media channel mix expanded. Search and display still play a massive role in the orchestration of performance, but with an all-time-high of active users on social media during the pandemic, new channels emerged with an increasing impact on product discoverability and purchase intent. In the Middle East and most Western markets, TikTok, Snapchat, Twitch and Pinterest have been on the rise, with shoppable content capabilities these new channels are competing with the likes of Facebook, Instagram and Twitter, not in regards to awareness, but also on the lower funnel activities, in terms of purchase and in-app conversions.
From text to image, video to audio, programmatically or through real time bidding, the media industry has constantly been reinventing itself and will continue to do so with the drop of 3rd party cookies on Chrome. Stitching user ID’s will become more important than ever, and social media will play an imperative role in the media decision-making and orchestration. Finding ways to drive full funnel customer journeys within social media will help brands increase their return on ad spend. Social commerce is moving towards something we love, “where storytelling meets performance”.
The revolution of 1st party data has started, and we see more and more brands pushing for soft conversions to acquire customer PII data. The good thing is, Google has postponed the launch day of a cookie-less world on Chrome until 2023, however, the sooner your brand starts adopting this new paradigm, stitching social into your overall data lake/warehouse, the better positioned will be whenever that kicks in.
Customer experience
As social media and commerce continue to blend, the digital customer experience has emerged as a key concern in the last few years. Customer experience is to commerce what water is to human beings. Every commerce transaction is based on an experience and failing to deliver on this experience might not only stop customers from purchasing in the first place, but they might also never come back again if the experience was sub-par. Today brands are competing not only with their direct industry competitors, but with every experience the user has had with any other brand.
In a more digital economy, with an increasing time spent on social, customers are interacting with brands more than ever before. It’s obvious social media is playing a key role on the overall customer experience, having an increasing big role to play on retention and customer service. Brands that are mastering the experience on social are those who are attracting and delivering bigger retention and engagement rates. And by engagement, we don’t mean views or likes, but engagement with the brand on other levels, purchasing other product categories or other sub-brands that they were not aware of yet. Here is where DNVB (digital native vertical brands) are outperforming other brands. Being able to capture from the get-go 1st party data through D2C models, allows these brands to provide a better customer experience, and indirectly, know more about their customers than the bigger brands. Social media plays an important role for DNVB’s, there are plenty of examples regionally: startups becoming super-charged brands thanks to the support and advocacy of their customers.
Customer Data Platforms
In recent years, CDP’s have been the talk of the town. Completely replacing the need for Data Management Platforms (DMP’s) that were only capturing business data, graduating to something that center all the data around the customer, the so-called customer-centric brands. With the 3rd party cookie challenges on the horizon, and social media being left out from the equation, CDP’s will play a massive role on stitching the social data to the overall single view of the customer.
The role of social media in a cookie-less world will depend on how good brands will stitch customer data across those channels into their data warehouse. Through CDP’s brands will be able to stitch all the customer’s IDs into a Unified ID. That will allow them to bridge the cookies issues, and still be able to launch their 1:1 communication with an omni-channel approach across different DSPs.
The increasing need to accelerate sales after the 2020 disaster paired to the growing demand for digital commerce from the consumer standpoint, is putting the focus on Point-of-Touch strategy. It seems like social and, more particularly social commerce, will be a key driver of this growth. Where customer experiences are more than just a static product display page - but a vibrant and dynamic channel that creates an unmeasurable bond with the customer.
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