By Sarah Cornelisse
Social media platforms (Facebook, Instagram, Pinterest, etc.) have introduced or enhanced commerce capabilities on their platforms as e-commerce has grown with consumers. During the last quarter of 1999, e-commerce retail sales were estimated at 0.6% of total retail sales (U.S. Dept. of Commerce). Preliminary data for the third quarter of 2020 estimated e-commerce sales at 14.3% of total retail sales, a 36.7% increase from the same quarter in 2019 (U.S. Dept. of Commerce). While a portion of the 2020 growth in e-commerce sales can be attributed to the COVID-19 pandemic, e-commerce sales were steadily rising in the quarters leading into the pandemic.
With 90% of U.S. adults using the internet and 72% of adults using at least one social media site (Pew, 2019), the value for businesses, particularly food and small businesses, in having digital and social media presence continues to increase. Additionally, as highlighted by the COVID-19 pandemic, e-commerce became critical for many agricultural and food businesses. With social media platforms offering a bridge between marketing and sales through social commerce, ag and food business owners may want to explore how social commerce may fit in their business and marketing strategies.
Why Social Commerce?
Consider how consumers and businesses use social media. Consumers, when surveyed, consistently rank learning about and researching products as one of the top reasons they follow a business on social media. Almost half, 43%, of internet users and 51% of users aged 16 to 24 years indicate that they use social media to research products (Statista, 2019). Additionally, 28% reported having discovered businesses via social media ads (Statista, 2019). As recently as the 2020 holiday season, in a survey performed by Deloitte, 26% of respondents indicated that they planned to use social media for their holiday shopping, whether for research or purchasing. Generationally, Gen Z (46%) and Millennials (44%) were the most likely to utilize social media (Deloitte, 2020).
Aligning with consumer use of social media, businesses post photos or videos of their products, or the result of using a product – for instance, a delicious looking grilled cheese sandwich or charcuterie board – on social media. A business’s followers are typically then directed to the business’s website or online store where they can learn more about the product, or for businesses with an online store, make a purchase. Businesses’ social media marketing generates sales; 48% of consumers report that they had purchased products they had discovered on social media (Statista, 2018).
For businesses actively engaging with customers over social media and utilizing social media advertising, implementing social commerce may lower the barrier to purchase as well as benefit from users who make impulse purchases upon seeing a product that catches their eye while scrolling through their social media feed. Consider how people shop in person - impulse purchasing is not uncommon. The share of purchases made on impulse ranges from 35% for those 65 and over to 49% for 18 to 24 years old (Statista, November 2020). Using social commerce to take advantage of impulsive purchasing has the potential to pay off if businesses are able to convert these individuals to returning customers.
Social commerce can help lower the barrier to purchase by lessening the number of steps that a customer has to go through to make a purchase of a product a business posts about. Social commerce allows the business to tag photo and video posts with a link directly to that product on an online store. The customer doesn’t have to open a new browser page, navigate to a website, find the item they saw in the post, and depending on the e-commerce platform, a customer may not need to add it to their checkout cart; these actions are bundled in one step for them.
The options that social media commerce platforms offer users include the ability to browse products and businesses with social commerce shops, to save products of interest to a wish list, to share products with others in their social network, and to make a product purchase.
Social Commerce Platforms
Currently Facebook, Instagram, and Pinterest are leading the way in developing social commerce functionality within their platforms and making these functions available to business accounts. Facebook and Instagram commerce offer three checkout, or payment options - on a business’s own e-commerce site, in-app - which is within the Facebook or Instagram platform itself - and also by direct message. The payment option(s) available to businesses is dependent upon the e-commerce platform the business utilizes as well as whether the platform has made it available to a business based on business category and/or geographic location.
Facebook Shop. Facebook shop is akin to having a storefront within Facebook. Businesses can showcase items and collections of items. Facebook Shop allows businesses to list products and sell within platform and payment transactions can be supported in-app or through redirecting to the business’s external e-commerce site. A business’s Shop and shop products are listed on their Facebook page, as shown in the image below.
Image: Facebook, by permission from Green Dirt Farm
When a business creates an image-based post, they have the ability to tag their product(s), indicating to users that the product is shop-able on Facebook. This feature also helps with lowering the barrier to purchase as users do not need to visit the business’s page to look for, or view, a shop. Rather they are presented with the information right in their feed.
Image: Facebook, by permission from Green Dirt Farm
Instagram Shop. Instagram Shop shares many similarities with Facebook Shop, which makes sense as Facebook owns Instagram. But Facebook and Instagram shops are independent of each other – that is, businesses can engage in social commerce on one platform but not the other. In addition, Instagram offers the ability to tag products in live video posts.
Image: Instagram, by permission from Corner Post Meats
Pinterest Shop. As opposed to posts on Facebook or Instagram, Pinterest has shop pins. Pins that are shop-able are presented to platform users with a price in the upper left of the pin. Pins also do not visually indicate the specific item that is for sale with a dot or tag as on Facebook and Instagram. This makes both pin titles and the image itself very important. Pinterest also does not support in-app purchasing. All consumers are redirected to the product page on a business’s online store which clicking on a pin’s shop button.
Tips for Getting Started with Social Commerce
Getting started with social commerce will take time and the first thing a business will want to do is to become familiar with the platform’s commerce policies. For instance, it’s important to note that a review process exists to ensure that a business meets the platform’s commerce requirements, so time should be allowed for this step in the process.
- Become familiar with commerce policies. Commerce policies outline each platform’s requirements for a business to be allowed to engage in social commerce. While most legitimate and honest businesses should not have difficulty abiding by and following these policies, it’s always good business practice to read and understand each platform’s policies as they may vary from platform to platform.
- Know what is allowed, and not. Not all products are allowed on social commerce. For instance, alcoholic products including wine, cider, and beer are not allowed on Facebook or Pinterest Shop. Pinterest also prohibits live animals and “sensitive or disturbing products.” This last category could be viewed very subjectively, particularly for animal-derived food products.
- Become familiar with Commerce Manager if using Facebook or Instagram. This is where businesses choose the checkout method, identify whether Facebook shop, Instagram shop, or both will be used, add items to shop(s), create collections, and preview the social commerce shop.
- If pursuing Instagram shopping the Instagram account has to be a business account as well as be linked to the business’s Facebook page.
- Identify products suited for social commerce. The average value of purchases that occur as a result of social media referrals is $79, so moderately priced items are most appropriate for social commerce (Statista, 2019). A business controls the items in a social commerce shop, that is, items are added to the shop catalog rather than all items from an online store being pulled in. This allows a business to choose to add the items that will most appeal to a business's followers, or more broadly, to the platform’s users if paid advertisements will be used as well.
- Use high quality photos and video of products. This is always important for online use, but especially so when used for social commerce.
- Connect loyalty programs. If you have a loyalty program, there is the option to connect that with your social commerce shop. Reward customers for shopping with you wherever they choose to engage.
- Capture customer email addresses. Finally, since social commerce drives customers direct to a specific product page or the online store’s checkout process, consider where customers are presented with the option to sign-up for an email list.
Social media platforms continually evolve, and features offered to businesses can change over time. As with any marketing tool or sales outlet, businesses should carefully consider whether use of social commerce aligns with the business vision and contributes to achieving business and marketing objectives.Source : psu.edu