Social Commerce Could Be Boon for Brands This Holiday
As consumers finish up their holiday shopping, social commerce could be a common way to round out last-minute gifts and shopping.
Social commerce, also called social shopping, refers to consumers purchasing an item while spending time on a social platform, like Instagram, TikTok, X (formerly Twitter) or Facebook.
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And it has begun pervading the U.S. market; about one-third of U.S. holiday shoppers said they’d buy at least some gifts through social media in 2023, according to Shopify data. Gen-Zers outpace the at-large market by about 15 percentage points. Forty-eight percent of Gen Z consumers said they’d purchase gifts through social media this year.
That could be, in part, due to the launch of TikTok Shop in September. The function allows brands and independent sellers to hawk products that can be purchased directly through the platform, bolstered by third-party commerce partnerships.
According to the social media mogul, 44 percent of Gen Z TikTok users on a fashion journey have bought a product because they saw it on TikTok within the past year.
Even prior to the launch of TikTok shop, 77 percent of TikTok users said the platform was likely to inspire a gift idea for this year, according to post-holiday Deloitte data from January.
With consumers’ social media fixation in mind, experts say brands should consider turning their eye to socials to finish out the holiday season.
Jeffrey Bustos, vice president of measurement addressability data for the Interactive Advertising Bureau (IAB), said video content can be key for brands because it allows users to demonstrate how a product actually works.
“What we’re seeing a lot in social commerce is that consumers want to see how the product is being used in your life,” he said. “This video format on social is really allowing you to do that. I think seeing images on social sometimes [makes] it difficult to really see, but when you see someone interacting with the product, it does seem a little bit more genuine.”
Doug Weiss, WHP Global’s senior vice president of e-commerce and digital, said social commerce has a major impact on brands’ digital strategies.
“The amount of time that people used to be reading newspapers or watching TV that time spent is now on a mobile device,” Weiss, who worked as Instagram’s head of creator commerce prior to joining WHP. “If you’re not leaning into where the consumer is spending time, you’re basically missing [a chance at] a conversation with the consumer that can actually drive sales.”
Though social commerce has become a common way for consumers to shop, Bustos noted that consumers’ patterns don’t mirror each other worldwide. In Asia and South America, he said, live shopping has taken off. U.S. consumers have been less bullish about the trend.
That in mind, he said, brands need to think about meeting consumers where they are, how they want to shop.
Many consumers have grown accustomed to an omnichannel experience; they may discover a brand online, then make a purchase in store; alternatively, they may have an in-store experience that incentivizes them to become a repeat customer through multiple channels.
Sonal Gandhi, chief content officer at The Lead, said that pushing consumers to brick-and-mortar locations by promoting events or incentivizing them with the promise of a free gift could be a valuable strategy.
But she noted that organic social content can also push consumers to start their purchasing journeys online.
“If you do have these events, you’re only reaching a small segment of the customer from [the standpoint of] experiential marketing, but that has a much bigger halo effect on social media now than it ever did before,” Gandhi said. “If you have these influencers at your events—even if they’re micro influencers—that really does [have] an impact…it works both ways, where campaigns on social media is driving to the store, but also, store activities are driving content and that virality on social media.”
Discovering brands for the first time could be one of the most important benefits of social commerce strategies, Bustos and Weiss agreed.
“I think that the potential discoverability [aspect] of social commerce is quite significant,” Bustos told Sourcing Journal. “A lot of times, we don’t know what problems we want solved until someone solves it for us.”
That could go hand in hand with impulse buying. According to Bankrate, 49 percent of consumers have made an impulse purchase through social media.
Where impulse buys are concerned, creating a positive, speedy consumer experience matters for creating consumer loyalty, said Isaac Krakovsky, EY Americas retail leader.
“When you go into someone’s website, you’re going there for a purpose. It’s your destination because you want to buy something, you’re considering something from that company. You’ve typed in their URL,” Krakovsky said. “When it pops up on social, you haven’t searched for it…They’re trying to serve up things that you may be interested in, and it is an impulse situation. I think the speed of transaction there is more important.”
As retailers close out the holiday season, social commerce could be a way to close the sale as consumers face financial pressures.
And once brands have data on consumers purchasing through—or engaging with—social media, they can use that data to help enhance the customer journey, Bustos said.
“If [brands] are able to track specific promo codes for certain products, and then seeing what products were bundled, then they can start seeing what future campaigns [and] collaboration they should be doing, which I think is incredibly valuable,” he said. “I think it’s really about using that data to tell a story, and using that data to… have a real connection with the consumer.”
As the cost of creating content remains high and brands face pressure to cycle through new content rapidly, Gandhi said, she expects to see an increase in campaigns that either highlight user-generated content or employ generative AI for copy and images going forward.
“The need for creating content is not going away, so brands are going to have to get more efficient with creating content. Generative AI technology is going to play a big role in that,” she said.
