Social media purchasing will skyrocket in popularity over the next few years, potentially opening up new markets for small enterprises.
According to a new Accenture analysis, social commerce is gaining traction. Yet this is nothing compared to the pace it will grow at in coming years. The report states that the expectation is that social media shopping will develop three times faster than traditional e-commerce over the next four years.
Social commerce will be a $1.2 trillion global business by 2025, accounting for 16.7 per cent of total e-commerce spend.
Social commerce shows up as in-app purchases within platforms such as Facebook or Instagram on a business or influencer’s page, or via Livestreamed shopping channels.
According to the report, unlike traditional e-commerce buying, social commerce levels the playing field between online behemoths like Amazon and smaller brands by providing these smaller enterprises with easier access to a larger customer base.
Now, large or small brands may sell through social commerce. Any individual can now build their own ‘brand’ and reach a market directly.
“This has immense benefits for small businesses and entrepreneurs since they can now reach potentially huge markets that were not available to them previously,” according to the paper.
A poll of over 10,000 global social media users found that 59 per cent of respondents claimed they were more likely to buy from smaller firms. At the same time they prefer buying on social media rather than with traditional web browsing. Almost half of those polled (44 per cent) stated they are more likely to purchase a brand they have never heard of through social shopping channels. These results may be due to having access to social proof. Social proof includes recommendations, comments and open customer communications right there in the social network itself.
“The numbers are shifting substantially,” according to the paper. “Instead of a few large retailers and brands selling to mass audiences of millions, we are now seeing millions of individuals and small enterprises selling to one another inside a vast social commerce ecosystem. As a result, huge brands will face increasing competition from thousands of smaller enterprises.”
In terms of size and maturity, China is currently the most advanced market in this sector, paving the way for others. Accenture anticipates that developing economies like India and Brazil will experience the biggest development in this sector in the coming years.
During recent lockouts and lockdowns around the world, more consumers were locked-in at home and unable to access physical stores, the tendency of shopping on social media grew. According to experts, social commerce will soon become the new standard in digital shopping.
“Social media becomes the next shopping mall,” Rob Garf, vice president of industry analytics at Salesforce’s retail and consumer products division, said in November 2020 at Insider’s IGNITION: A Retail Revolution event. “Don’t put it off,” he said.
Suketu Gandhi, a partner at management consulting firm Kearney, told Insider in May 2021 that the need for a more engaged and personal buying experience online is driving change.
It’s becoming clear that the website is no longer as relevant a shopping experience as it once was. It’s comparatively dull and uninspired compared to dynamic and fast-moving social networks. And even though shopping through live streams has been available on Facebook and Instagram for a while, it’s been slow to gain traction in the US, Canada, Australia and the UK. That looks set to change in 2022.
Dante St James is the founder of Clickstarter, a Facebook Blueprint Certified Lead Trainer, a Community Trainer with Facebook Australia, a digital advisor with Business Station, an accredited ASBAS Digital Solutions advisor and presenter, and the editor at The Small Marketer. You can watch free 1-hour webinars and grow your digital skills at Dante’s YouTube Channel.