The Social Commerce Dream

Social Commerce is the dream of impulse buying on digital media come real. Careless, flawless, and not least frictionless shopping on mobile, tablet, surface and yet-to-be-invented digital interaction devices with augmented reality. You may agree that we are still a bit far from it in 2021, or perhaps you are one of the pioneering consumers trying out every new way of shopping available.

With social media, brands can interact directly with consumers. So, marketing has become interactive, the customer voice has become audible, and social commerce could have the power to make shopping great again.

What is social commerce?

The concept of Social Commerce was coined by Yahoo back in 2005. It represents the activation of a purchase behaviour triggered by social media interactions. But Yahoo couldn’t make it work, and more than 16 years later, it is still looking for its final form. Ecommerce first emerged out of dusty distance-buying post-order catalogues. Its first embodiment on the internet was text-rich, image-poor and devote of any emotional dimension. In a parallel trend of comparison shopping, rational buying became the default for internet shopping and deals-sites were the most fun places around.

In recent years, the internet has become more commercial, and by projection both more fun and more superficial. Social media helped make a shift away from human-to-machine relations and back to human-to-human relations. At least we got that far. Emojis conquered text messages crying out loud, that “emotions are back”. 📢❤💥

Perhaps these are indications that full-scale social commerce is actually possible despite its long journey in the dark.

What features will make social commerce successful?

The features of social commerce allow for a wholesome social experience within in a full ecommerce journey. We propose to define its components as the following list of commerce-enabling elements:

• A product catalogue (also called a product feed)
• A product selection and check-out feature
• Peer-to-peer (social) communications related to products and services
• Influencer integration
• Live video
• Behaviour-based ad targeting
• Shopping enablement in rich media (such as product tagging in images or video)
• Reviews, ratings
• Recommendations
• Fulfillment
• Client services

Social commerce today emerges from two different horizons: On the one hand, you have the social media-enabled ecommerce into which Amazon falls. And on the other hand, you have the ecommerce-enabled social media such as Instagram and the Facebook Shop. Let’s have a look at these species in more detail.

Social-media enabled ecommerce

Most ecommerce platforms integrate a number of the elements we mentioned, but Amazon is the most advanced social media-enabled ecommerce model with reviews and ratings, peer recommendations and “people also bought” as driving elements. We can also put Etsy, Vinted and Shein in that category. To take the example of Amazon, it is pushing further into social media and hoisting itself up the funnel with things like the following:

• Amazon posts: social posts on “brand stores” and now coming to product detail pages
• Influencer integrations: activating the ecommerce dimension of influencer partnerships by allowing them to build a store front directly on Amazon with products from their partners
• Live commerce: live video product presentations of products on Amazon Live. Around the clock Shoppingtainment.

Where Amazon is still very much at the end of the purchase journey for most users, it is trying to build a more entertaining user journey opening up for upsells and impulse buys. It’s social gaming platform Twitch may come to play an important role in the set-up moving forward. The strongest element in Amazon’s social commerce play is clearly the Live commerce initiative. It feels like the return of TV Shopping and merchants are flocking to the opportunity to present their products in a live stream on the platform. Build more awareness, give their products a more humane touch, show the founders, reach new audiences, nudge users further towards the purchase. Real humans, real emotions, real persuasion.

Ecommerce-enabled social media

On the other extreme of the spectrum, Pinterest and Instagram have long been considered the most advanced social commerce players. With slowing user growth, it has become essential to monetize their audiences more strongly in order to survive, and ecommerce seems like a much more powerful economic model than advertising.

Instagram has the power to recommend fashion items that make people buy. At least that is the case for Andreas Reiffen, founder of Crealytics and heavy internet users. Where traditional commerce was always based on the location, location, location paradigm whereby the location of a business and its flow of traffic was determining for its’ success, the success parameter for social commerce could be closer related to the quality of the recommendation.

Instagram’s Mothership, Facebook has picked up the challenge in a serious manner with Facebook Shops, a new commerce-oriented solution after their Places and Marketplace. One of the strongest motivators for advertising spend being ecommerce, it is crucial for Facebook to make the connection, especially in a world where cross-platform data integration becomes increasingly difficult (read more about the battle of the cookies here). The impact of advertising higher up the funnel is becoming more difficult to measure and prove.

The most significant step for Facebook Shops is the integration of a payment solution which is already operational in the US market. This will allow for an end-to-end shopping experience from discovery to purchase without leaving the platform. It also opens up for an interesting opportunity: A Facebook Shop with Amazon fulfillment at the back end (combining a Facebook Shop with payment and an Amazon Multi-Channel Fulfillment solution). Ecommerce without a webshop, who would have expected that?

And let’s not forget Snapchat and TikTok. TikTok is building out its advertising offering and is already integrating shopping functionality into the mix. TikTok Shopping, however, is mainly an integration with Shopify enabling for a simple pass-through from the social media to the shop. It looks like social commerce-enablement is becoming a mainstream feature for all platforms. Snapchat has long been integrating its offering with ecommerce solutions and has a similar force of persuasion to TikTok among its users. Snapchats social commerce case studies are an interesting read. Its main tool for ecommerce enablement is a deeplinking feature for linking ads to shops. For younger audiences, these platforms have an enormous persuasion power, but the ecommerce-enablement still requires jumping to another channel.

Ecommerce everywhere

Over at Google, there is pondering as well. Already three years ago, Google went on a mission to provide “shopping everywhere”. I called it an Ozone-approach to shopping (ozone is a variety of oxygen present everywhere around us in the air and with the interesting characteristic that too high doses can be lethal to human beings).

The ozone initiative aimed to provide ecommerce activation in all of Google’s media channels. In search marketing it is already present via Google Shopping and product ads which appear in an integrated manner into search results. But Google is pushing this further with a purchase button and an integration with Google Pay. I call it the Google Buy button although it appears to have a less Amazon-like name in Google documentation.

It is also working on an integration of a purchase function inside videos on YouTube and in images. The approach is similar to the tags Instagram has enabled in its images to link to a product page, but it is reasonable to assume that Google might push this further via image recognition and propose purchases of practically anything you see.

There is an app for it

But what if it all ended up in an app instead. With the open internet being closed up and user journeys more restricted, the place to be is in an app. The superapp phenomenon is expanding beyond China, where WeChat has always been the app to offer everything: Uber, Paypal, Spotify, Messenger, eh I mean WeChat transport, WeChat payment, WeChat Music, WeChat just chat etc.

Superapps are social media by definition and some are natively ecommerce enabled. Perhaps social commerce is already here.

Social Commerce Champions

Taking a first look at the various contenders to the title of social commerce champion and giving them a first rough rating on the features listed at the beginning of the article, the top contenders seem to be Amazon, Instagram (Facebook) and Google. The triopoly of digital advertising are seriously addressing this.

Rough rating of the main emerging platforms for social commerce. Please disagree and contact the author for improvement 🙂

Get social proof, inspire and reach your audience via ads or influencers

Instagram and the Facebook Shop seem like interesting places to go in 2021. For ecommerce players strongly anchored in Amazon, there is social turn to take and a live commerce opportunity to seize where available (US so far). The key will be to understand end users better and engage them with content earlier in the user journey. For brands with little ecommerce penetration, it will be about learning how to drive users to the sale and to take the purchase and fulfilment experience into consideration. An impulse-buy with a 7 day deliver span may not be a viable solution for social commerce. Social commerce is fast, fluid, frictionless and fulfilling.

And in the future, augmented reality may allow for immersive experiences merging the online and offline user experience and creating an entertaining and fulfilling user experience. Facebook heading for the Metaverse and Snapchat activating Augmented Reality in its campaigns, may be signs of an emerging social commerce paradigm.

Native Ecommerce

Native Ecommerce will power the shopping craze of the 2020’s. Watch a film and be attracted by a dress the actress is wearing. Pause, click, purchase right there, then resume your film. See a designer watch in an influencers’ feed on Instagram, click, purchase and scroll along. Watch a start-up founders’ live demonstration of an innovative product and buy it on the spot. Native Ecommerce is the future of impulse buying. Making the user experience great again.

Native ecommerce is when then entire shopping process from product discovery to purchase and checkout happens natively on the same platform. Such a process is already native to Amazon, but in most other online purchase journeys online, you still jump to another platform when it comes to the final purchase of a product. This disrupts the user journey, puts tracking off and represents a monetization loss for the platform you left.

Over the past few years, industry observers have described a trend known as social commerce, whereby more and more of the purchase journey is integrated into social media platforms such as Instagram and Pinterest. Social commerce, however, is no longer the only type of native ecommerce on the rise. Native ecommerce is coming to most of your existing online platforms, changing the nature of the online purchasing journey and making ecommerce into a feature applicable to any existing platform. Facebook shops are accepting payment and Google now has a buy button which we will find in videos on YoutTube, on it’s shopping experience and even in search results. Every online platform is working to complete its’ range of features for online shopping so that you no longer have to click through to an ecommerce site or go over to Amazon to buy products. Stay put, native ecommerce is coming to you making shopping a feature of any online experience.

The Trinet and the compartmentalisation of the internet

Some will consider this trend of compartmentalisation of the internet a disturbing trend. It certainly wasn’t the way the internet was conceived to be. With the strong growth of Apple, Google and Facebook and the walled gardens they raise around their users, the internet of the 2010’s started to be called the trinet, as each of the three players were pretty much building their own internet and raising barriers around it to avoid users and data to flow between them. In these Data Wars, the end user has a seamless experience within each of those walled gardens, and an inconsistent one when the boundaries are crossed which is perfectly natural user behaviour. The marketers nightmare.

When I launch a Facebook or LinkedIn page, I am much less concerned about feeling blind. I am more concerned of being misled by the stats I receive from the platforms and not receiving the ones I am interested in. The first time business owners are confronted with the reality of their Facebook page can be a bit awkward. They have heard so much about all the data Facebook holds on users. Didn’t Cambridge Analytica have 5000 data points on each user thanks to data collected via Facebook? Then how come you can’t even know who the  fans of your business page are, and less so contact them?

You can access the data for marketing purposes. Show advertising to all your fans, to all the fans of your fans, to people in specific demographics, geographic segments, those interested in footwear, or those who are likely to buy insurance. Facebook has the most powerful targeting machine on the internet due to that user data, but you don’t get it, you can only rent it, even if it was built with your own contribution.

In the 2020’ies the compartmentalisation is much broader than a trinet. Most online platforms are using similar same techniques of impeding user leaks and blocking data flows. Amazon, Microsoft, Snapchat, TikTok. Each platform will penalize the distribution of content taking the users outside of their platforms and will impede most tracking of activity from any other platforms.

How tracking and data restrictions are reinforcing this trend

When I launch a new website I always feel entirely blind until an analytics tool such as Google Analytics is active. Imagine you opened a fashion retail shop and you would stand in the middle of the shop and not be able to see any of your visitors nor hear when the door opens. The only thing you could know would be when the till rings a new sale. People have come to hate cookies across the board but sometimes miss some of the essential things they help us do. Please don’t remove first party cookies! Please don’t block all cookies when you go to a website. Don’t prick out the eyes of the store owner!

On the expanded trinet, platforms don’t allow you to do any tracking on their own. You have no raw data, can’t extract it, can’t consolidate with any other platform data you may have. Don’t say you didn’t know, it was in the terms and conditions you accepted when you created your page!

If marketers could get their right, they would ask for tags to be placed on every page of their brand’s presence. These tags would allow them to understand how their marketing impacts end-users, and especially allow them to use automated optimization allowing for advertising to be efficient. But those signals are absent from any cross-platform advertising, except traffic sent to your own website.

The end of cookies is one of the big topics in our digital marketing report.

The opportunity for online merchants

Whereas marketers are struggling with this segmentation of the internet into closed circuits, it might actually provide an opportunity for online merchants because of the desire of each of these platforms to provide all the functionality necessary to complete a purchase.

It is already quite common to have an ecommerce website and an Amazon store in parallel. Merchants are managing the challenge of maintaining a catalogue in two places and driving traffic and optimizing each of them.

In order for such a dual approach to work, a number of opportunities present themselves to merchants:

• Maintain a single source of catalogue, for example by using a PIM (Product Information Management) tool, and upload the catalogue to each ecommerce channel.
• Optimize inventory and fulfillment, for example by using MCF (Multi-Channel Fulfillment) from Amazon whereby you hold one FBA inventory (Fulfillment by Amazon) and pass orders from other channels to Amazon

Being an omnimerchant is not something reserved for large ecommerce operations. The tools and processes are constantly improving to make this possible.

A blueprint for operating native ecommerce

In a small ecommerce set-up, a catalogue can be managed via an excel file. Perhaps taking a first step further and making this a shared online version would be a great idea. Google Sheets can do wonders. With one single source of the catalogue, each native ecommerce channel will be fed the same information.

For large catalogues, a product information management tools becomes necessary. It can maintain the latest product information and ensure consistency between channels.

For driving traffic to each ecommerce channel, the job of the marketer suddenly became much easier. For a Facebook shop, advertise on Facebook and Instagram, for a Google Shopping set-up advertise on YouTube and Google, for an Amazon store, no need to look for external traffic.

One of the big challenges for ecommerce has always been the checkout. This is where a large part of the current revolution is taking place. Google and Facebook are starting to do the checkout. Facebook probably even has its own currency on the roadmap. Other players such as TikTok, may move in the same direction dragging Pinterest and Snapchat with them. Payment on Google and Facebook is currently only possible in the US market, and in other markets, the solution may be an ecommerce solution such as Shopify allowing you to run your own ecommerce website and provide the checkout for Facebook and Google operations.

In the future, however, an ecommerce operation may not need a site. This changes the nature of a merchants’ infrastructure and budgeting.

Remains to be see whether agile ecommerce corresponds to what users want

The infrastructure for the omnimerchant is here. All the big marketing platforms are enabling native commerce and raising their walled gardens. The only ones who weren’t asked their opinion were the end-users. Do you really want to buy that dress in an instant while you are watching a film? There is an opposite trend of buying less, recyclying and sharing. Of giving it a good think before you do your purchase in order to not overconsume. And many users cherish their freedom, doing what they can to not be locked into the user journey the marketing platforms laid out for them.

Native ecommerce is definitely a trend, and it can bring efficiency to merchants, and consistency to marketing operations. But whether users will go all the way remains to be seen.