Social commerce: what is it, does it work and when in the Netherlands?

Social commerce, a term that you encounter more and more often. If we are to believe Facebook and Google, social commerce will be “the next big thing”. The possibilities in the Netherlands are still very limited, but if we look at the other side of the Atlantic, the prospects are promising. Yet?

In my article “11 e-commerce trends for 2021” I already paid attention to social commerce. As the title suggests, I see social commerce as one of the international trends for this year. But what exactly is social commerce? And when will the big tech giants delight Dutch consumers and sellers with their innovation?

What is social commerce?

Let me start with the dry definition of social commerce:

Social commerce is the process by which products are shown, promoted and sold directly on social media.

The term “social commerce” originated in 2005. Yahoo! describes social commerce as “a collection of social tools to support online shopping”. Think of shared shopping lists, user reviews and user generated content (reviews and tips) to supplement product information. Using these tools, buyers get “advice from trusted individuals who can then buy them quickly and confidently”.

In America, consumers can already shop in the Instagram shop.

A good example is Facebook. We are already (often to great irritation) used to the rich range of advertisements. But in the States, Facebook has already rolled out its Shops functionality, giving sellers access to Facebook and Instagram as a sales channel. In the Netherlands, for the time being, we still have to make do with Marketplace (on Facebook) and refer to external webshops (on Facebook and Instagram).

Why social commerce?

Sounds too good to be true, but why would you apply social commerce at a launch in the Netherlands? I’ve described the benefits for both buyers and sellers.

Benefits for buyers

  • Easily read experiences and opinions of others. Social media is an excellent platform to give your unvarnished opinion about (recent) purchases. It is therefore also extremely interesting to read these experiences and reviews during the orientation process.
  • Find out what interests your influencers. While we know that influencers get paid for posting content, it still influences our view of brands and products. The effect has been proven: influencer marketing is booming, especially on social media;
  • Contact the seller directly and personally. Social media sets the tone to get in touch with the seller in a more personal way. Get rid of that boring contact form, hello chat conversation;
  • Involve your connections in your orientation and purchasing process. Consult with friends, form an opinion together and buy within a few clicks;
  • Identify with (the purchase of) a brand. By placing a purchase, buyers feel even closer to a brand. Even more fabric to show off purchases and then get confirmation from friends.
  • Buy quickly and confidently. Buying a popular (or by your influencer-touted) product within a few clicks is now possible.

Benefits for sellers

  • Be where your target audience is. Especially millennials and generation Z (age category 18 to 34 years) are avid social media users. According to research, more than 30% say they want to buy items directly on Facebook, 27% on Instagram and 20% on Twitter;
  • Target your marketing even more specifically. The possibilities to show your ads to a specific target group is a wet dream for every online marketer;
  • Load your brand effectively and personally. Social media gives you the opportunity to brand your brand through targeted advertisements, personal communication messages, the use of appropriate influencers and personal tone-of-voice of your customer service employees;
  • Get and enjoy high exposure. By using targeted ads and building followers, you increase your reach at a rapid pace.
  • Get valuable insights. As mentioned earlier, reviews within social media are usually more genuine and more unvarnished. This is a perfect way to gain valuable insights and improve your services and products.
  • Enjoy a short sales funnel. The customer goes through a relatively short journey because everything (from social interaction to product purchase) is housed within one platform;
  • Take advantage of a booming sales channel. Researchers predict that e-sales will exceed €600 billion over the next three years.

Social commerce platforms

What exactly are the largest social commerce paltforms in the world? As mentioned, our cold frog country is currently coming home from a cold fair. But if we look at China and (especially) America, we see beautiful innovation that is promising.

Facebook and Instagram

Facebook has been working on social commerce for some time. At the beginning of 2020, it launched Facebook Shops in America. In Shops, businesses can create stores for Facebook and Instagram. Facebook Shops is the collection of online shopping features released on both social platforms over the years. Think of Facebook Marketplace, Instagram Shopping, Native Checkout and Live Video Shopping.

Even within Facebook itself, American users are already able to make purchases.

Stores are free to create, but charge a fee when Facebook’s checkout is used. If a brand doesn’t have access to Facebook Shops, Facebook’s native checkout or Instagram Checkout, there are still opportunities to use social commerce. Instagram allows brands to sell products directly from posts or stories, and Facebook Marketplace allows users to make purchases from both local and e-commerce businesses without leaving Facebook.

Facebook has not yet mentioned concrete data to roll out to other countries.

snapchat

Last year, Snapchat announced a new checkout functionality in the US app. This functionality allows users to purchase products directly in the app. Previously, creators could only link products to individual snaps. The new checkout goes one step further: selected accounts can now create a store (using Shopify) within the “Snap Store”. These accounts have the Shop button on their Snapchat profile, giving users direct access to the Snap Store.

Snapchat also does not make any announcements about a launch in the Netherlands.

The Snap Store in America makes it possible to buy products quickly.

Tiktok

TikTok is the youngest known member of the social platform family, but it is not far behind when it comes to social commerce. Under the name Douyin, TikTok has been making inroads in China for some time, also with its internal shop. In the second half of 2020, TikTok in America announced a partnership with Shopify, where Shopify merchants can easily connect with TikTok users. By sharing content on the TikTok feed, sellers are able to reach a large audience.

TikTok has announced that they will expand to (a.o.) at the beginning of this year. Netherlands.

In China, users in Douyin (TikTok) can view products from videos and purchase them directly.

Pinterest

On Pinterest, the so-called “Product Pins” take care of the buying process. Users who browse Pinterest ads can recognize a “Product Pin” by label and purchase it directly from the retailer. Pinterest then stores the necessary purchase information so that follow-up purchases can be made more easily. This makes buying more accessible, a fact that makes advertising and selling via Pinterest even more interesting.

Pinterest also makes no statements about a roll-out to the Netherlands. For the time being, Dutch users are redirected directly to the checkout of the seller’s webshop.

In Pinterest, the Product Pins (also called “buyable pins”) carry for purchasing products within the platform.

Does social commerce really work?

Will social commerce overshadn traditional e-commerce? The truth is simple: More people are turning to social media for product recommendations and reviews. According to MarketingWeek, 56% of those surveyed like brands on social media and follow them to see products. Another 35% do this to get ideas for the next time they go shopping. But do people really want to shop on social media? According to this particular study from a few years ago, not really.

Another survey, conducted among social media users aged 16 to 64, showed that only 9% of respondents are interested in using Facebook’s buy buttons. Statista’s 2018 study showed that a whopping 82% of online consumers in America did not purchase products directly through social media.

Yet another study found that only 35% of millennials “probably” make a purchase through Facebook. Only 24% said they were interested in a Twitter buy button. According to this research, both Twitter and Facebook have claimed that about half of their users come to their sites to buy products they can buy.

But why do these figures contradict each other so much? In my opinion, this is because we still do not have a clear definition for “social commerce”. Some sources also classify transactions with social media as a traffic channel under “social commerce”. Others (including me) believe that the transactions should also take place on the social platform.

Is social commerce something for you?

That’s the big question. The social media giants are now first in charge, only TikTok makes concrete statements about a rollout to the Netherlands. The rest keep their jaws firmly together. In the meantime, we are keeping a close eye on this social commerce revolution.

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