Is Social Commerce Useful For Your Small Business?
Selling products and services online has many challenges. Even after developing a great product or service, you need to find the right audience, hook them, and, most importantly, get them to buy what you are selling.
E-commerce websites have been around since the very first online marketplace; the Boston Computer Exchange was launched in 1982. Now online stores and apps are an essential part of modern life for purchasing retail goods and booking services.
Social media, email and search engine advertising campaigns are built around the premise that the customer engagement and subsequent traffic they generate must be directed to the website.
In the past decade, social media marketing has evolved. Innovative features have made it even easier for businesses to capture and convert leads. One of the ways is to use social commerce tools as part of a digital marketing strategy.
What is social commerce?
Social commerce was a term initially used by tech blogger Steve Rubel in 2005 to describe how peer-to-peer recommendations and reviews can make products easier to find and therefore sell more.
What Rubel was describing is what we now call social proof in marketing: the customer reviews that pop up under products or ticker tape along a webpage footer.
With the advances in social media platforms and integrated apps, social commerce is far more than reviews and ratings. Evolving from social media-based buying and selling such as Facebook Marketplace, it provides a new way to reach customers and convert leads.
Social commerce is a way of buying and selling products and services within a social media app. Users do not have to leave the platform to make the purchase.
Examples include TikTok Shop and Instagram, where buyers can complete in-app checkouts, and sellers can list their products for sale. Shoppable ads, shopping tags in posts and stories, and product groups are platform features that can be used in addition to shops.
What are the benefits of social commerce?
There are several benefits of using social commerce to make sales or bookings.
Quicker checkouts and fewer lost sales
Merges discovery, engagement and sales experience into one
Increases social trust and credibility
Increases user-generated content and viral sharing
Less budget spent on paid media and acquisition
Easier to tailor advertising and products
Is social commerce useful for all types of businesses?
The types of products that stand to benefit most from social commerce are fast-moving consumer goods, such as beauty, clothing and gifts.
These are relatively low-cost or impulse-buy products which are very visually focused, ideal for promoting on social media. According to figures for 2024, the average purchase through social media was $85.98.
For larger purchases, the number of touchpoints needed to convert the lead is greater. Customers want more information before committing, for example, when buying a washing machine or sofa.
Businesses that do not have a physical product to sell may struggle to grow their business through in-app social commerce. Several products and services cannot be sold through social media; although these vary between platforms, they can include:
Event tickets
Services and digital-only products
Physical products with age restrictions such as alcohol
Subscriptions
Certain healthcare products
The audience demographic for users who buy via social commerce versus through a website is also different. Younger users with disposable income are more likely to use social media platforms and trust in-app checkout processes.
If your customers are older, less active on social media, or your product is more expensive, then perhaps an ecommerce site is a better choice for your sales funnel.
Social commerce is not the only way to reach customers with your product; it is another potential tool for your social media marketing strategy.