Social Commerce Is Here and It’s Reshaping How We Buy

Social Commerce

It’s quaint thinking of it now that Instagram began as a photo-sharing app. In the last decade, the revolutionary social media platform grew from a space to take and share photos of one’s life to an important component of Facebook’s social empire to now, amid a flurry of influencers and brands and more, a place to shop. 

Instagram’s meteoric rise as a primary tool for sharing snaps (and lurking) to shopping—whether it is wholly embraced or not—is a signal of where ecommerce is going. The app and its one billion users are positioned for it in this new kind of digital mall. It’s the quick see it, click it, buy it mode of shopping on one’s phone—a meet-your-buyer-where-they-are approach.

This is called social commerce.

Social commerce is defined by the ability to sell products and services directly through social media. And Instagram, while one of the most overtly popular, is not the only platform tapping into this revenue stream. In the next eight years, the social commerce market is expected to grow worldwide to over $3 trillion USD, according to Statista. In the next few years, according to eMarketer, U.S. social buyers will increase steadily from 32.5% in 2021 to 37.9% in 2025.

Social commerce is not inevitable—it’s already here and part of a brand’s revenue. Buyers and brands are used to selling features on apps like Instagram. Live shopping is a force in Asia. Brands are increasingly looking to meet shoppers where they are at and social media is a key place. A thoughtful brand will look at the opportunities and nuances each platform offers, and avoid replicating similar content and product discovery across its many channels. 

So, where are buyers doing this kind of shopping? Here, we’ll explain a bit of history about social commerce, why it’s important to buyers and brands, and highlight the approaches platforms are pursuing.

How social commerce began

Social commerce is part of the broader ecommerce ecosystem. The entire process occurs on a social media platform: from product discovery and browsing to research and checkout. Think of eBay as an important initial resource in the evolution of social commerce. Craigslist, too. Social commerce would not be what it is without these digital places to swap, sell, and barter for goods and services. 

Today, China is leading the social commerce charge, and more broadly, citizens in Asian countries more readily adopt shopping through such platforms than North American buyers. That is in large part due to the popularity of WeChat, a social and communication platform that has commerce integration. WeChat is one of the most important platforms with over 1.2 billion active users.

Social commerce as we know it began, at least in part, in North America from Facebook’s more modest, eager beginnings. From there, it has been shaped by a few other key technological advances and user behavior by groups such as Gen Z and influencers, enabling social commerce’s propulsion onto our timelines and feeds. 

A social network start 

Social commerce can be traced back to the fledgling days of Mark Zuckerberg’s Facebook empire in the early 2000s when it was still simply a social network for you and your college friends. In 2007, Facebook opened its marketplace, which allowed users a Craigslist-like experience to sell items within their networks. Seven years later, the tech company began testing its buy button, which allowed brands to sell directly on the platform. A year later, Facebook launched payment splitting with friends in Messenger and implemented its first shoppable pages. In 2016, Facebook Marketplace launched, and then in 2018, it became a monetizing enterprise with ads. Marketplace has become an important and thriving part of the platform even to this day. 

Facebook expanded its offerings and reach by purchasing Instagram in 2012 and WhatsApp in 2014. Instagram’s evolution as a shopping space would be influenced by the decisions at Facebook HQ but soon it would come to eclipse the networking platform. Around the same time in 2015, Instagram implemented a buy button as well. Instagram’s strategy swerved slightly in 2016 by introducing an option for brands to tag products with a price. Because of this, research became more accessible to users on the platform: they could reasonably see a product they liked or loved, its price, and decide quickly if it was worth purchasing. 

In 2018, Instagram launched its Shoppable posts for brands, elevating the social commerce conversation to another level. Instagram began to evolve; emphasizing an aspirational influencer lifestyle with the products and services easily attached that, should a user want to convert to a buyer, now had the ability to with a checkout feature. 

Gen Z’s new rules 

Facebook and Instagram set a precedent for social platforms to be more than a networking tool. Soon, other digital spaces such as Pinterest and Snapchat, along with TikTok, would see opportunities beyond content and connecting people to each other. It worked in their favor as Gen Z began to grow up into that highly influential teenager category. Teens are, and forever will be, one of the most important groups to influence culture and commerce—setting and resetting standards every few decades. 

A key example is Gen Z’s appetite for video. It’s not solely on them—millennials appreciate visuals too—but Gen Z is drawn so distinctly to the video format. In 2020, of course, video consumption across the board skyrocketed because of the pandemic: 96% of consumers engaging with video content say it has increased substantially. But the want for video, especially from a younger demographic, has steadily risen over the last few years, shaping content and marketing approaches across many industries. Short-form video content is essential in order to succeed. It’s how Instagram’s Stories—and then Reels—and TikTok have become important formats to present information or products to potential buyers. 

This generation demands brand transparency, equality, and diversity in a way no other generation has before. They’ve sought out social platforms like Snapchat over Instagram and creatively fulfilling apps like TikTok over the laboriousness of Facebook. Gen Z-ers still enjoy the physicality of shopping but they are, according to Statista, the most interested demographic overall in the social commerce buying pathway. They are two to three times more likely to shop on social channels than anyone else. 

There is an element of peer review that Gen Z-ers trust. Seeing friends or influencers or celebrities whose style, opinions, and voice they trust vet a product means more than anything a critic or reviewer could bring to the table. 

Influencers are a must

Video content has become a crucial part of any social commerce strategy but so, too, are influencers. Influencers, or creators, originated as celebrities or athletes sponsoring or branding products. A switch occurred soon after where “average” folks, everyday people on social channels, who had a large following could influence an audience, and brands started tapping into this resource. 

The average time spent on social media increased to over 65 minutes in 2020, according to an Insider Intelligence report, and, coupled with an increase of 16% of social media usage year-over-year, this has helped brands down the pathway to influencer marketing to sell their products. 

The biggest component of social commerce is the trust an audience of potential buyers has in the person selling the product, which is now funneled through the influencers they follow. This live peer review is more effective rather than putting explicit trust in a brand. Buyers have ample opportunity to engage with ambassadors, or "regular" people like them, through stories or sponsored posts, Q&As with a brand representative on Instagram Live, or live shopping channels.

Influencers, once totally beholden to the contracts they have with brands, now take accountability for their own finances with the introduction of an affiliate program on Instagram. Affiliate links have been available for some time for influencers with “swipe up” or “link in bio” CTAs but only a portion of a profit goes back to the influencer. With a dedicated program on the social platform, any product sold through that specific post or piece of content earns the influencer more. Social commerce, then, is beneficial to the spokespeople and ambassadors for brands. 

Learn more: Influencer Marketing Statistics 2021: How Influencers Are Shaping Ecommerce Marketing

Where is social commerce right now? 

Now that we’ve gone through some essential information on social commerce, it’s important to place each platform in what they are doing now and where they are expected to grow into 2022. It’s not just Facebook and Instagram taking hold of these conversations. Pinterest and Snapchat are making moves and positioning themselves as crucial in the social commerce race for success

Instagram

Instagram Shopping is, perhaps, the most intuitive of all the social platforms for a buying experience. Instagram has built a digital mall buyers can carry with them at all times by creating shops, product tags, collections, and a checkout feature. Product pages are just as detailed as those found on ecommerce sites and apps. 

Instagram has invested in @Shop, a curated editorial program that will feature products, as well as content from a former director of branded content at Conde Nast publications like GQ and Vogue. The platform has really embraced and doubled down on the see it, click it, buy it approach by offering everything from peer reviews (influencers, micro-influencers) to brand ambassadors and product demos (Lives) to a curation (collections, @Shop.) 

Of course, to sell any product on Instagram, a brand or seller must have a page set up on Facebook. 

Learn more: Instagram Influencer Marketing in Ecommerce: Everything You Need to Know

Facebook

Facebook’s current approach to social commerce is anchored by its Marketplace—a peer-to-peer seller/buyer market that is a lot like Craigslist but with mutuals—and Shops, similar to what Instagram has. Marketplace has over 1 billion active users, while Shops has around 250 million people engaging with retailers and these digital storefronts. 

Because Facebook and Instagram share the same ownership and similar vision of ecommerce, one’s approach does not really exist without the other. Both have been, of course, influenced heavily by the global pandemic and the ways in which businesses needed to find alternative outlets to sell their products and services to buyers. 

Snapchat

When Kylie Jenner said she wasn’t fond of the app any longer, it saw a substantial dip in its stock, but its users never altogether went away. 

Once thought of as just an app for filters and sending and receiving photos and messages that disappear in 24 hours, Snapchat is evolving into something else. Snapchat is edging its way into the social commerce game by way of augmented reality. In May, the company announced plans for a Creator Marketplace that would allow its influencers to create product-centric AR content and experiences for those on the platform. It also acquired the company Screenshop, which will refer users to the retailers of products posted in the app. 

The company is cleverly re-envisioning its value in an oversaturated social media space. TikTok, which we will get to, is by far the fastest growing and most important social media app to appear since Instagram. Snapchat burned bright in 2016, slowly fading into the background of the mainstream, only to be used by those most loyal. By embracing AR, Snapchat is trying to position itself as a future-forward company, while also engaging in both the video and experiential parts that Gen Z, among others, want out of their shopping. The hope is that its users will want to “try on” clothes before purchasing and will do so through this technology.

It’s tricky because, while born out of the pandemic in a sense, many people have felt overwhelmed and fatigued by such a reliance on technology. This endeavor is still in its early days for the company that has 250 million active users.

TikTok

The massively successful social platform TikTok is still in its infancy as far as an ecommerce source. In October last year, the company officially partnered with Shopify to explore this avenue, helping turn its stars and creators into brands and launch their businesses. 

TikTok has always been an entertainment source more than a social one. There is a reason why Ocean Spray skyrocketed in popularity last summer with the viral video of a man skateboarding and singing along to Fleetwood Mac’s “Dreams” while drinking from a bottle from the brand. It was breezy, unbothered, and wholesome. The product sold by virtue of exposure. Brands can’t expect that to happen all the time. 

By wading into the social commerce world this way, TikTok is enabling a new class of merchants (creators) and setting brands up for success as well who do want to use the platform for entertainment and selling. 

Pinterest 

This move into the ecommerce space by a mood and interior design setting app also, like Instagram, seems intuitive. Pinterest is best known for its boards and pinning visuals for anything from weddings to fashion to interior design, to name a few. Launched this month, Pinterest now has Shoppable Pins that will allow users to pin items and then go back to that list and purchase any items they have saved. The feature also shows its users reviews and additional costs like shipping. 

Pinterest’s key concern is that it's mostly a discovery resource. It’s used in part as research that leads to other places to buy products. It will be a challenge to change perception to an ecommerce resource and engage its significantly smaller user base at 478 million, compared to other platforms. 

Live shopping

We’ve covered live shopping before but it’s worth closing out the social commerce conversation by acknowledging that many of the platforms mentioned above have live shopping capabilities, in addition to brand new companies that are emerging specifically for this purpose. Facebook and Instagram each have their own versions of live shopping, with Facebook’s home shopping network-like Live Shopping Fridays. Brands that have participated so far include Sephora and Nike, as well as Sassy Jones. Instagram’s Live function has always served as a way for brands, influencers, buyers, and more in the shopping ecosystem to participate together. Pinterest, too, has shown interest in live shopping when it hosted a three day that tested the feature out. 

Live shopping provides real-time feedback to brands selling products and the selling methods by its influencers. China is the largest market to adopt the trend: in 2020, live shopping was an estimated $150 billion business. It will double to $300 billion by the end of 2021. In the U.S., which is still catching up, it’s positioned to make around $11 billion. 

What’s next?

Writing for Vox, Terry Nguyen succinctly captures the new age of shopping: “To the average shopper, the distinction between social commerce and ecommerce is almost irrelevant. It’s all online shopping anyway, and ecommerce isn’t going anywhere.” 

Omnichannel is important for selling to customers. Whether it’s a physical retail store coupled with an ecommerce store or selling on social media, the diversity of offerings and nimbleness for reach allows customers to get to you on their terms. Many brands have used the commerce-first app approach—like Sephora, H&M, ASOS, adidas, as a few examples—instead of doubling down on a social-first direction. There are tools like Shop that are helpful for commerce-first apps. But, as Nguyen emphasized in Vox, everything looks like online shopping to the buyer who doesn't know the behind-the-scenes of the business. It’s the brand’s job to make the journey seamless and to experiment and be agile as tech evolves in tandem with buyer behavior. 

What becomes important to brands or creators who go the social commerce route for revenue is not simply meeting buyers where they are but making these spaces places where buyers want to get their products. 

In a sense, ecommerce walked so social commerce could run. What will ultimately prove social commerce’s sustainability as a viable revenue driver for brands is how they adapt and move through the stickiness of the ever-changing collision between technology and buyer behavior.

About the author

Sarah MacDonald

Sarah MacDonald is an arts and culture writer and editor based in Toronto. Her words can be found in the Globe and MailHazlitt, The Walrus, CBC Arts, Elle Canada, VICE, and many more. She launched Commerce In The World, but is the senior content and editorial marketing manager for Canada at Shopify.

Check out Sarah MacDonald’s work