Commentary
Why online retailers, partners must focus on social commerce
Govinda Giri, architect of the Sagoon social commerce platform, believes the time is now to capitalize on an e-commerce model with the social media audience.
March 29, 2018
By Govinda Giri, architect of the Sagoon social commerce platform
It's no secret that over the past several years social media usage has skyrocketed, and it doesn't look like this trend will slow down anytime soon. According to a study released by Hootsuite and We Are Social, on social media and digital trends, global social media usage has increased by 13 percent in the last year.
With so many captive users at the disposal of retailers and their partners via their customer's favorite apps, why is it that so few actually follow through with purchases via social? In a Pew Research study conducted last year, roughly half of Americans surveyed shared that they have made a purchase using their mobile device. While that is a promising number, a very small percentage of this group were looking for a product to purchase via a link on social media. In fact, only 24 percent of users ages 18 to 24 made their purchases via social media — the largest percentage of any group surveyed.
This is because current social platforms are not built to support a comprehensive social commerce model that benefits both the consumer and the retailer. The time is now to capitalize on an e-commerce model with this social audience: This is a $300 billion market opportunity, including sub-markets like digital gift cards at around $149 billion and social network advertising at around $36 billion.
Social commerce explained
While several platforms such as Instagram have made strides to provide an in-app shopping experience for users, the fact remains users are looking for the convenience of shopping and purchasing in one centralized location.
In an ideal social commerce model, a retailer targets a platform that matches their needs and already hosts an engaged audience. The users are activated with deals specific to the platform, such as exclusive promotions and the ability to gift others. The more that users buy, browse, and share with others, the more rewards they receive whether in the form of points or money towards their next experience, which encourages customer loyalty.
Rewarding customers for being a direct source of revenue to both the retailer and social partners leaves the user feeling valued and appreciated. This also encourages users to share their positive experience with other potential customers. In the day and age where a company can be praised -or skewered- via social media reviews, cultivating a deeper customer relationship is invaluable to overall success.
Preparing for social commerce success
While the social commerce model may seem simple, in order for retailers and their social media partners to effectively utilize this tool, they must ensure they are providing a superior customer experience. As most retailers know, getting in front of customers via mobile is of the utmost importance as users move away from their desktops and to the convenience of their cellphones.
In terms of social media, 93 percent of social media users access their preferred platforms via mobile. It is important that both retailers and their social commerce partners are designing specifically for mobile, with a focus on pages that are visually appealing and simple to navigate on a small screen.
In terms of a checkout process, the less steps the better as clicking through multiple pages on a touch screen can be a pain staking process. The key to an effective social commerce experience is to keep it streamlined from the moment a user enters the app.
Looking beyond your backyard
Online retailers with an eye on global success should be especially focused on keeping up with social commerce trends. Currently, only 37 percent of the population in South and Southeast Asia actively use social media. This is because most platforms are built with a U.S. audience in mind and focus on little outside simple information sharing.
While keeping friends and family up to date is interesting to some, the ability to engage in e-commerce has proven to be a more pressing need for others. For example 66 percent of Indians refer to social media before making a purchase, compared to merely 40 percent of Americans. With India home to the second largest population in the world, internet retailers should evolve and adapt to this trend before it's too late.
Social commerce allows users the ability to buy and send gifts, shop for products and services, and share and redeem coupons all within the platform, making social media a lucrative option for retailers and a more rewarding experience for customers.
