Author: Extensiv Jul 26, 2023 10 Min READ

The Comprehensive Guide to Social Commerce [2023]

10 Min READ
The Comprehensive Guide to Social Commerce [2023]

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The pandemic forever altered the way people shop. With limited options to visit brick-and-mortar locations, many embraced the conveniences of ecommerce and the ability to purchase what they want, on any device, anywhere, any time of the day or night.

As ecommerce adoption soared for goods and products, so did digital commerce, which extends purchasing options beyond tangible products into a vast range of other digital services like streaming movie subscriptions, e-books, music, online education courses, and more.

In 2020, the first year of the pandemic, ecommerce sales increased 24% over the previous year, reaching $3.27 billion. The trend continued in 2021 with a growth rate of 18%. While the weakened economy slowed growth slightly in 2022, this year the industry is expected to grow 14% and exceed $4 billion.

By the end of 2023, it’s projected that one out of every five retail sales will happen online. So, if you’re in retail or ecommerce, how do you secure a piece of the market for yourself? How can you compete in a rapidly changing digital market?

The answer: go where your customers are. And today, regardless of demographic, you’ll likely find them engaging in social media applications like TikTok, SnapChat, Facebook, or Instagram. In fact, Statista reports that social commerce has gained traction across all age groups, with prominent growth in the 26-41 age bracket.

But once you log into social media, how do you connect with your existing customer base and attract new buyers to your business? The key to opening that door is social commerce.

What is Social Commerce?

If ecommerce is the whole pie and digital commerce is a slice of it, think of social commerce as the ingredients inside that make people drool.

Social commerce uses social media as a digital commerce platform, which Gartner describes as “the core technology that enables customers to purchase goods and services through an interactive and usually self-service experience.” Keep in mind that social commerce is not the same as social media marketing; social media marketing is how your brand engages with customers and the general public whereas social commerce is an online storefront that drives customers to directly purchase items from your brand.

While you can market just about any product or service via social commerce, some of the hottest product types include healthcare, beauty and personal care, food and drink, home products, and apparel.

The State of Media Marketing 2022 predicts that by 2025, social commerce will make up about 17% of all ecommerce spending. And, if trends continue, some reports speculate it may very well outpace ecommerce altogether. A study from Accenture, for example, anticipates social commerce will grow three times as fast as ecommerce, exceeding $1 trillion by 2025. Other studies predict it could reach nearly $3 trillion by 2026.

While new social media services come into the market all the time, a few like Facebook and Instagram are leading the pack for social commerce, with retailers saying they use:

  • Facebook (almost 70%)
  • Instagram (almost 50%)
  • Twitter (43%)
  • TikTok (24%)

It’s likely Facebook and Instagram are winning market share because they both offer seamless ecommerce integrations, especially with Shopify, a trend more social media applications are moving to implement.

Rise of Omnichannel Sales

The increased popularity of social commerce is a direct reflection of the rise of omnichannel sales across all industries. By adopting an omnichannel strategy, retailers and ecommerce businesses can reach customers across a range of sales and marketing resources like online marketplaces, social media, text, chat, video, and more. The goal is to engage potential buyers and deliver an integrated customer experience, regardless of which tool (or device) they’re using.

One report found that 98% of Americans now expect to get the same experience from a brand each time they switch between devices on the same day.

Why the love for all things omnichannel? Omnichannel marketing, for example, through social commerce, is convenient and always available. That’s important because almost 80% of consumers say they’re buying things directly from their mobile devices like on social media, and that more than 20% of those purchases happen while they’re scrolling.

As such, it’s not surprising to see retailers are embracing the trend, with 91% saying they use some form of social media to sell, and a growing number are shifting to selling actual goods via social commerce, increasing 10% between 2021 and 2022.

With omnichannel sales and marketing becoming a regular part of retail and ecommerce, if you haven’t already, now is the time to start thinking about developing a social commerce strategy for your business.  

Social Shopping Benefits

Social commerce, or social shopping, is more than just getting to where your customers are. It’s all about delivering customized content that appeals to your buyers, and ensuring they have a cohesive and positive shopping experience with your brand.

But the benefits of social shopping go well beyond that:

  • Increased conversions: By directly marketing to your target demographic, you can convert more leads into sales.
  • Lower churn rate: When you’re providing customers with positive purchasing experiences, you decrease the chance of losing those customers for future purchases.
  • It sells itself: You don’t always have to convince your buyers that your products and services deliver what you say. Via social media, they can also see the product for themselves and get plenty of feedback (reviews) about what other customers think of it.
  • Build your brand: Social commerce gives you an opportunity to link your goods and services to your mission and goals and align your operations to your customer interests. If you are a brand your customers trust, the more likely they are to repeat business and tell others about their experiences.
  • The good, the bad, the ugly: With social commerce, you get direct feedback about your brand, product, and customer experiences, creating a unique opportunity to address and rectify issues before they hurt your brand.
  • Targeted marketing: Because social media applications capture a range of demographic and interest data about users, you can utilize that data to ensure you’re targeting the right products at the right time to the right consumers.
  • Outperform competition: Social commerce enables your buyers to quickly research competitors or see similar products, giving you the chance to highlight what you do better to win new business.

Social Storefronts

Social storefronts are ecommerce tools. Unlike social advertising, which generally drives sales leads away from social media interactions to your online storefront, social storefronts give your buyers an integrated shopping experience without ever leaving their favorite social media app.

Statista highlights how social media provides customers with a “fast and direct customer journey,” finding that almost 30% of respondents indicated they make purchases directly from the social network where they found a product or brand. Both Meta-owned companies Facebook and Instagram also get high marks as favorites for providing consumers with the best social commerce experience.

Let’s take a closer look at some popular social storefronts and how they work for social commerce:

Instagram Shopping

What it is: Provides retailers with an integrated storefront that enables buyers to purchase products directly from a business’ photo and video posts.

Who’s using it: The average Instagram user is between 18-34, with more than half of users identifying as female.

Why it works:

  • Storefront is easy to set up
  • Posts are visually pleasing and engaging
  • Can curate shops by collections or themes (i.e. new arrivals, sales, seasonal, etc.)
  • Integrates with Facebook
  • Can include product details such as pricing and descriptions
  • Customers can purchase directly in app with streamlined checkout and shipping
  • Direct to consumer marketing opportunities
  • More chances impulse buying will turn into real sales

Facebook Shops

What it is: A storefront within the Facebook app that enables eligible businesses to build catalogs and design an online storefront.

Who’s using it: From January to March 2021, Facebook Shops reported an average of 1 million monthly global users and about 250 million active stores worldwide. The highest percent of users are 18-24 (23.8%), with more female (55%) users than male (45%).

Why it works:

  • Can customize brand with collections
  • Can use eye-catching designs and images
  • Opportunity to reach specific demographics with customizable ad campaigns
  • Insight into shop sales, product details, and more
  • Products appear on Facebook Shop, Instagram Shop, and Facebook Marketplace
  • Direct engagement opportunities with customers

Pinterest Commerce

What it is: Connected catalogs related to your brand’s Pinterest feed that build a shoppable storefront experience.

Who’s using it: There are more female users of Pinterest than males, with the top age group for both being between 25-34 years old.

Why it works:

  • Integrates with Shopify and WooCommerce
  • API to help scale shops with more products and more updates
  • Users are already researching the topics/products they’re interested in
  • Opportunity to reach new customers when existing customers pin or share your products on their Pinterest boards
  • More website conversions from pinned products
  • Customer insight into current and predicted trends

TikTok Shop

What it is: A storefront that enables merchants to showcase and sell products directly through TikTok using videos, live selling, and product showcases.

Who’s using it: Fairly even demographics across the board:

  • Ages 10-19: 25%
  • Ages 20-29: 22.4%
  • Ages 30-39: 21.7%
  • Ages 40-49: 20.3%
  • Majority female (57%)

Why it works:

  • 92% of users take action after seeing a product on TikTok
  • 90% are satisfied with their experience
  • Can collaborate with other creators
  • High user engagement with qualified traffic
  • More opportunities to use creativity in product marketing

Twitter Shops

What it is: Collection of up to 50 products to showcase on your brand’s page.

Who’s using it: 42% of Americans ages 12-34, with 63% identifying as male, compared to 37% female

Why it works:

  • Many users include job titles, hobbies, and interests in their profile, which you can use for targeted marketing
  • 89% of people use Twitter to find new products
  • 76% of users say they’ve bought something based on Twitter conversations
  • Access to real-time trends
  • Opportunities for social listening (hear what customers and potential customers are saying)
  • Direct interaction with customers via Tweets or direct messages

Shoppable Posts and Ecommerce Ads

Other social media applications enable social commerce via shoppable posts and ecommerce advertising. Here are a few examples:

Snapchat for Business

What it is: Digital advertising and video marketing to drive sales and website conversions.

Who’s using it: Ages 18-24 (38.6%), with a small division between female users (50.6%) to male (48.7%)

Why it works:

  • New AR Explore is a dedicated shopping area on the app
  • Shopping Lenses enable users to interact with products like with virtual try-ons (250 million people that have engaged with Shopping Lenses more than 5 billion times)
  • Customers can chat about what they’re buying and why
  • Can publish content in stories and via ads

YouTube Shopping

What it is: Opportunity to promote products from your store or other brands.

Who’s using it: 20.2% of YouTube’s advertising audience is between 25-34. About 51.4% are female and 48.6% are male.

Why it works:

  • 70% of viewers make purchases after viewing content on YouTube
  • 56% of Gen Z, 54% of millennials, 48% of Gen X, and 26% of boomers find new products most often on YouTube
  • Direct integration with Shopify, which keeps products updated on YouTube
  • Content is easy for users to consume

LinkedIn Social Selling

What it is: A way for businesses to present their products and brands to increase outreach and revenue.

Who’s using it: Ages 25-34 (60%) with 57.2% male and 42.8% female

Why it works:

  • 80% of B2B social media leads come from LinkedIn
  • Half of members are more likely to purchase from a company if they’ve engaged on LinkedIn
  • Leading platform for lead generation
  • Can build brand awareness with business profile
  • Demonstrate thought leadership about specific product, service, market, or industry
  • Opportunity to get referrals from others already using your services
  • Customers can get to know your employees (great connection for sales).

WhatsApp Business

What it is: Also owned by Meta, the storefront operates similar to Facebook and Instagram with a product catalog.

Who’s using it: 30% of users are 18-34, with 53% identifying as male and 46.6% as female

Why it works:

  • Catalog includes a title, price, description, website link, and product code
  • Customers can shop while chatting with your business
  • Direct messages personalize engagement with your brand
  • Various marketing methods such as lists, videos, attachments, links, and more
  • Can automate messages so your customers always get a response

Reddit for Business

What it is: Advertising opportunity to connect directly with communities most engaged with topics related to your products and brand.

Who’s using it: Most users (64%) are 18-29 years old, with a bachelor’s degree or higher. Majority are male (74%) with 25.8% female.

Why it works:

  • Three options to reach customers: ads, promoted posts, premium takeovers on trending topics page
  • Customers are highly engaged
  • Instant feedback on product, brand, and customer service
  • Opportunity to introduce your brand and products to new customers engaging in relevant Reddit communities
  • 90% of users trust Reddit to learn about new products and brands
  • Can create your own Subreddit like an “Ask Me Anything” session with real-time host responses from your brand

Social Commerce Best Practices

Which social media platforms are best for your business depends on a range of factors; however, there are some best practices you can employ to help you get the most out of your social commerce engagements. Here are 15 suggestions to help:

  • Know your target demographic and choose platforms targeting that demographic.
  • Understand how your target demographic engages with each social media platform (for example, videos, photos, conversations, etc.).
  • Develop a comprehensive social media strategy that will serve as the umbrella for your social commerce program.
  • Check out the competition to see what they’re doing well, what’s not working, and what you can do better.
  • Understand types of content/posts/engagements your existing customers create and engage with on these platforms.
  • Create unique, engaging, eye-catching content unique for each target platform. Do not create the same post/catalog/collection/ad and use it across multiple platforms. Remember, each platform has a unique audience and engagement type.
  • Align your content with your business’ mission and goals, and live up to your brand values.
  • Get to know your customers and potential customers and engage with them frequently. 86% want to communicate with the businesses they support.
  • Don’t ignore negative feedback or complaints.
  • Be consistent, transparent, trustworthy, and reliable. If your customers trust your brand, the more likely you’ll retain them.
  • Offer unique sales, giveaways, and promotions tailored to the platform, trends, or audience type.
  • Consider working with influencers on each platform. 40% of consumers trust a brand based on influencer recommendations and 63% trust what influencers say about a brand more than the brand itself.
  • Focus on engagement, education, and entertaining your audiences (and then subtly sell to them).
  • Be responsive. Each time a customer engages with you creates an opportunity to build connections with your brand, and that’s what social media is all about!
  • Try and try again. Every social engagement you try won’t inherently work. Be creative. Be flexible. If something doesn’t work the way you hoped, acknowledge that and try a different approach.

Your Extensiv Social Commerce Partner

Social commerce success is all about customer satisfaction—not just how you engage with them to sell your products and services, but how you deliver on those commitments. That means your business must stay in control and have complete visibility into everything from your sales channels to inventory, shipping, and delivery. If one part of the flow fails, you risk losing all the momentum you’ve built through your social commerce strategy.

Omnichannel ecommerce is challenging for most businesses, and if your brand gets social media buzz, it will be even harder as more orders come in and your business scales with your social media cred.

If you’re a retailer or ecommerce business managing your entire order, inventory, and shipping workflow, or you’re working with a third party logistics (3PL) provider to help, consider adopting a solution like Extensiv to ensure you’ve got an answer for every inventory or order management issue that might pop up along the way.

Here are some ways Extensiv can help you fulfill all of your social commerce goals and keep your customers happy:

Extensiv Order Manager: Your one-stop hub for everything you need to manage ecommerce operations

  • Automated order management
  • Inventory control and reorders
  • Tracking and integrating shipping
  • Centralized visibility and insight into your current sales and fulfillment channels
  • Ability to forecast future demand so you’re never caught off guard and your customers don’t get frustrated with your services

Extensiv Warehouse Manager: Visibility into everything you need to ensure your warehouses operate efficiently

  • Manage stock levels
  • Order and receive inventory with accuracy
  • Manage and audit inventory, complete with automated reorders
  • Print product barcodes, bins, and SKUs as needed
  • Pick, pack, and shipping options that are validated to ensure they’re correct and ship on time

Extensiv Integration Manager: Everything you need to streamline and align back-of-the-house operations with your full customer experience

  • More than 100 integrations available to streamline orders and connect your fulfillment technology stack, all within a single platform
  • Automate and improve flow order with integrations for your favorite ecommerce platforms and marketplaces like Shopify and WooCommerce
  • Sync inventory so it’s always current based on order sources—each time a customer places an order
  • Track shipping for accuracy

And, if your social commerce program is helping you scale faster than you expected, Extensiv can help you find a 3PL partner to help manage your order fulfillment and warehousing needs in our Fulfillment Marketplace. Best of all, it’s free and all of the contacts are already vetted for you.

A Promising Future

As both ecommerce and social commerce continue to grow and evolve, both will play key roles in which businesses succeed in changing economic climates. By embracing the power of social shopping, you have a unique opportunity to keep your existing customers happy, win new business, outshine your competitors, and ultimately, positively influence your bottom line.

For more ecommerce industry tips and insights, subscribe to our blog!

Social Commerce FAQs

What is the difference between social commerce and social media marketing?

Social commerce and social media marketing have commonalities, but are different. Social media marketing is how your brand engages with customers and the general public. This can be everything from sharing product photos, videos, customer testimonials, trends, and more. Social commerce is an online storefront that drives customers to directly purchase items from your brand.

What's the difference between social commerce and ecommerce?

Social commerce is a function of ecommerce. Ecommerce enables consumers to purchase goods and services across the internet via many channels, for example, your web site, a digital storefront, apps, and more. Social commerce is more narrowly focused and happens across social media platforms.

What are examples of social commerce?

Some examples of social commerce are Facebook Shops and Instagram Shopping. TIkTok, Pinterest, and Twitter also have other examples of social commerce where consumers directly buy items from your brand on a social media-hosted online storefront.

What are the benefits of social commerce?

There are many benefits of social commerce. For example, increased customer conversions, decreased churn rates, brand enhancement, instant product feedback, direct customer engagement, and targeted marketing.

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