The Future of Social Commerce
While social commerce has roared ahead in markets outside North America, marketers here face a trust gap that’s left them struggling to replicate that success. But there’s a massive revenue opportunity, with US social commerce sales set to grow 34.4% this year to $53.1 billion. Marketers who get it right will reap the rewards, attracting a fresh wave of new shoppers and inspiring their existing customers to spend more.
Here’s what you can expect from the year ahead...
An emerging barrier to social commerce becomes a competitive advantage for marketers who break through it
Social search optimization emerges as a make-or-break skill for marketers
- Social commerce hits the trust gap
An emerging barrier to social commerce becomes a competitive advantage for marketers who break through it
- All eyes turn to social search
Social search optimization emerges as a make-or-break skill for marketers
Commerce Trend 1
Social commerce hits the trust gap
An emerging barrier to social commerce becomes a competitive advantage for marketers who break through it
Networks pull back on social commerce plans
Share this nowCopied to Clipboard!Networks pull back on social commerce plans
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Last year, social commerce seemed destined to be the next big thing in ecommerce. As sales blasted past $350 billion in China, North American and European marketers scrambled to position themselves to take advantage of a new way to make money directly from social beyond advertising.
Since then, social commerce has arrived with less of a bang and more of a yawn. Despite its success in China, North American and European consumers haven’t shown much interest in the technology—so much so that Meta decided to shut down its live commerce functionality on Facebook and affiliate product tagging option on Instagram. TikTok has also scaled back its ecommerce plans, delaying the launch of live shopping.
With almost every major network pulling back its social commerce plans, the promising future of social shopping feels farther off than anticipated.
Consumers say the biggest barrier to purchasing through social is trust
What’s behind the tepid adoption of social commerce? A lack of trust in both social networks and vendors.
The top two concerns for social buyers stem from a lack of trust in vendors, according to an Accenture survey of over 10,000 consumers. Their biggest concern is that their purchases won’t be protected or refunded. They’re also worried about the quality and authenticity of products and sellers on social media. And the third most common concern stems from trust in the social networks themselves; people say they don’t want to share their financial information with the networks.
Marketers haven't faced up to their role in this trust gap yet
Our survey asked marketers what they believe are the greatest barriers for social buyers. And, while marketers also think trust in networks is to blame—our data suggests they don’t realize they have an even bigger role to play.
Of the marketers we surveyed, 37% said that concern entering payment information on social platforms was the biggest issue for social buyers—in line with the results of Accenture’s consumer survey. But while almost half (48%) of consumers told Accenture that vendor reputation and product quality was their main concern when shopping on social, less than 8% of the marketers we surveyed said the same.
Smart marketers know that the social commerce experience is about much more than technical concerns. To overcome the trust gap and turn skeptical shoppers into buyers, marketers will have to work on the basics: offer easy returns and refunds, display ratings and reviews from other buyers, and keep buyers notified about the status of their purchases throughout the customer journey.
Marketers who master the basics will build a lasting advantage
So here’s the thing. When networks and vendors do overcome that trust barrier, social shoppers are very sticky and reliable repeat buyers.
The average US social buyer will spend $518 via this channel in 2022, up 27% from last year, according to Insider Intelligence. Annual spend will increase by $419 per buyer over the next three years, reaching $937 in 2025. And social commerce sales growth is also expected to remain above pre-pandemic levels through to 2024.
So yes, in 2023 we’re likely to see social commerce features get scaled back. Many marketers and business owners will make knee-jerk reactions and stop investing in their social storefronts.
But it’s far too early to take Facebook’s shutdown of its live commerce feature or reports that TikTok is abandoning its plans for livestream shopping in the US as an indicator of their overall social ambitions. Proactive brands will continue to see the opportunity ahead—and they’ll relish seeing their competitors abandon social commerce plans early, leaving the playing field wide open for those with the patience to hang on.
Recommendations
Creating a trusted shopping experience built on the basics is table stakes for achieving success at scale. If shoppers aren’t sure they’ll receive what they order or be able to exchange something, they’ll hesitate—or leave. Double down on doing the simple things well across your social stores, like reliable fulfillment, hassle-free purchase protection, and refunds to protect buyers.
Social commerce experienced two years of exceptional growth throughout the pandemic, and while growth in the number of social buyers is slowing, the amount of social commerce sales is still rising. 2023 will be a watershed moment for early adopters and those who persevere through the trough of disillusionment. Social commerce isn’t going anywhere—but its widespread adoption might take a little longer than we thought.
Put it into action
Unlock the potential of social commerce with this beginner’s guide to getting started.
Commerce Trend 2
All eyes turn to social search
Social search optimization emerges as a make-or-break skill for marketers
Google’s been the go-to in search forever—but that’s changing
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Media for most of the current millennium, Google’s been an unbeatable cultural force. Competitors from Bing and Yahoo to Ask Jeeves and DuckDuckGo couldn’t match the search engine giant’s ability to yield fast and accurate information. Google’s clear, neutral presentation of results, ranked by their relevance to the widest possible user base, gave it an effective monopoly that’s well into its second decade.
But today, Google faces new and maybe not-so-unlikely competition from social media platforms. Younger generations, in particular, are going to platforms like TikTok and Instagram to do things like figure out where to go for dinner, buy that sweater they saw on the street, or spend their fleeting vacation days.
Instead of scrolling through Google’s long list of results, they look to social platforms for travel tips, recipes, and news. Forty percent of 18- to 24-year-olds are now using social media as their primary search engine, according to an internal study by Google. In September 2022, the New York Times even proclaimed that “For Gen Z, TikTok is the New Search Engine.”
While it’s tempting to join the pundits making sweeping generalizations about the impending death of Google, let’s stick with the data and take a closer look at how search behavior differs on social media vs. search engines—and for whom. Here are three truths backed by our own data.
Social networks are visited by more people than search engines every month
More internet users aged 16 to 64 visit social networks than search engines on a monthly basis. What’s more, nearly a third of the time that people spend using the internet is spent on social media.
More than a tool to keep in touch with friends and family, social media has become an engine of culture where we collectively engage in almost every aspect of daily life.
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Younger people are considerably more likely to use social networks for brand research
When it comes to shopping, more people under the age of 25 turn to social media to research and evaluate brands. And social’s utility for marketing goes well beyond advertising: Gen Z uses social media more than search engines to evaluate products, compare prices between competing brands, and make decisions about where to spend their money.
When it comes to discovery, search engines and TV are still ahead
Evidently, though, marketers should be careful about putting all their eggs into the social media search basket. For the average person on the street, search engines and television (for all of you Zoomers out there, that’s the big screen in your grandparents’ living room) are still the main place where people discover new products and services.
TV’s followed by word of mouth. So for the moment, people are more likely to learn about your brand during a commercial break or an old-school conversation with a friend than they are to discover it on TikTok.
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Social’s search dominance is just beginning
The transition of search from web to social will be long and generational. Don’t get too caught up in headlines about the impending death of Google search when, for the vast majority of people, it’s still one of the main ways they’ll learn about your business.
But the shift towards social media as a primary search mechanism is happening—and it’s not too early to start preparing. In 2023, social media marketers and small business owners who want to get ahead should start mastering the basics of social search optimization.
EXPERT PERSPECTIVE
Brayden Cohen
Team Lead, Social Marketing and Employee Advocacy, Hootsuite
Q: How are search behaviours on social changing how you think about your day job?
A: Search is never going to be dead when it comes to Google. But people's habits are changing. They're using social to search for new products. Whereas beforehand, I think people were just coming to social for reviews or getting to know a brand, now they're going for social to actually buy. And we know that because networks like Instagram still integrating commerce functionality into their products—despite low demand. The main thing it’s changed for me is my perspective. I treat our social pages like a mini landing page and website—I try to imagine using our social channels as the main point of purchase.
Q: What advice do you have for small businesses who maybe don’t have a ton of time to invest in their social feeds?
A: First and foremost, my advice is to nail down your content strategy. It sounds so basic, but that’s actually where it starts. If you're putting out valuable content that resonates with your audience, or your prospective audience, it's gonna perform well, and it's gonna be pushed out into an algorithm and more people are going to see it.
Q: So it’s really about doing the simple things well?
A: Yeah, exactly. Doing the fundamentals right is what makes you more discoverable across every social network. Optimize your profile, make it interesting to navigate, have a clear bio, geotag your posts, have a profile photo. Keep it succinct.
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Recommendations
Alt text (also called alt descriptions) is used to describe the contents of an image within HTML code. Adding alt text to images is a guiding principle of accessibility on the web and helps search engines index images, which can improve your search engine optimization (SEO).
Local SEO is essential in industries like hospitality, dining, and entertainment—and for small businesses with brick-and-mortar shops. Whether it’s a regular search or a voice search, you want your business to appear at the top of the search results when someone in your area is seeking your service, so make sure to add a location to your business page and to any content you share whenever possible.
Put it into action
Quickly optimize all of your posts for social search with this checklist of SEO essentials.
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