Influencer Marketing

The Future of Social Commerce: What It Means for Brands and Influencers

By February 8, 2019 No Comments
Consumers are increasingly turning to social media networks to guide their purchase decisions. As such, social media is shifting to become social and transactional. While social media platforms are still used to connect with friends and family, are also becoming more popular as a means of discovering and buying new products or services. According to Mary Meeker’s 2018 Internet Trends Report, 55 percent of respondents bought a product online after discovering it from social media content, with 44 percent buying immediately, and 11 percent reporting that they bought the product later.
On Facebook specifically, 78 percent of 18-34-year-olds discovered products that they were interested in buying on the platform within the last three months. 59 percent also reported discovering products on Instagram and Pinterest, highlighting the power of visual social media channels for retail discovery.

A social network is only as influential as the content powering it

While there’s no denying that certain social media platforms like Instagram, specifically, are becoming consumers’ go-to tools for product research and discovery, it’s really the content on these platforms that is capturing the attention of consumers and driving consumers to discover and purchase. It’s no coincidence that the amount of influencer-generated content on Instagram has been increasing exponentially since 2016, seemingly in parallel with the number of consumers using social media to discover products and make purchases.
As more brands and agencies continue to see the value and ROI of influencer-generated content as it relates to driving purchases on social media, specifically, influencer-generated content on social will become table-stakes and the result will be even more consumers turning to social media to make purchases. Why? Because time and time again, influencer-generated content has proven to be more trusted and memorable than other types of content. It’s the content consumers not only want, but need to make purchase decisions.
In Q4 2018, we’ve seen the major platforms heavily invest in e-commerce features and integrations, with the strongest push coming right before the holiday season. From Facebook’s AI and merchant deals in Marketplace and Instagram’s slew of new shopping features to Pinterest’s Promoted Carousel Ads and Snapchat’s Visual Search, let’s take a look at which platforms are leading the e-commerce front.

Snapchat has improved as a hub for social commerce, but still has ways to go

Snapchat is struggling to find its niche. After posting another consecutive quarter of declining revenue and user growth in Q3, Q4 left Snapchat looking to find revenue-generating opportunities. In attempts to monetize its offerings, Snapchat released three new e-commerce ad options (Shoppable Snap Ads, Product Catalogs, Expanded Pixel Targeting), and, most notably, announced its biggest update of the year: its Visual Search partnership with Amazon.
The timing of the release of this Visual Search feature is likely no coincidence; just one week earlier Instagram announced the expansion of Shopping in Stories and introduced Shopping in Explore. For Snapchat, visual search brings influencer activity closer to the point-of-purchase, making it easier to influence its audience, tell an ROI story and generate revenue, which the media platform desperately needs.
Over the past few months, we’ve seen Snapchat release countless new e-commerce features to keep its users engaged, but nothing has been able to reverse its declining user base. While Snapchat may be a nice-to-have for marketers, it is no longer a must-have. Snapchat’s only real claim to fame was that it was the favored platform among teens, but now that teen usage of Snapchat (84%) is behind Instagram (85%), Snapchat needs to think fast. It’s likely we’ll see an abundance of new releases geared at the teenage crowd, aiming to steal them back from Instagram.

Instagram continues to dominate in the social commerce space

While Instagram’s parent company continues to struggle with issues over security, data privacy, and misinformation, Instagram continues to be a key factor in Facebook’s growth, largely driven by the platform’s $5.48 billion ad revenue business.
Since Instagram’s co-founders left the company in September, the platform has released a slew of new features and tools, the majority of which are geared towards new e-commerce offerings aimed at expanding opportunities for revenue. Notable new features include Shoppable Stories and Video Tags, the ability to save to your Shopping Collection, and a new Shopping section in Explore. According to the company, 90 million accounts tap on shopping posts every month, highlighting the opportunities that marketers have to reach consumers and influence their paths-to-purchase on Instagram.
There is also speculation that Instagram may be planning to launch a standalone app specifically for shopping. Reports indicate that “IG Shopping” would allow users to browse items from businesses and merchants they follow, and buy them directly within the app, highlighting the possibility of a payment integration feature in the near future, which would be huge for consumers, marketers, and influencers alike.
Instagram is one of the world’s largest content engines, providing brands with endless opportunities to reach and influence consumers before, during, and after a purchase is made.

What’s next for social commerce?

Consumer trust is at an all time low. Despite 80 percent of shoppers stating they are familiar with social media shopping, when asked about what stops them from purchasing directly through a social media platform, 71 percent cited the security of their credit card and banking information as a major concern, closely followed by privacy, or the safety of their personal information. This gap in trust makes sense – especially given the recent social media and influencer marketing platforms‘ purges of fake followers, engagements and other forms of fraud.
Social commerce isn’t where it needs to be to facilitate widespread user adoption – yet. The move to social commerce will require even tighter connections and integrations between social networks, platforms, and product pages, in addition to increased pixel, tracking, measurement, and analytics capabilities. Above all, social commerce will require greater content diversification and integration (i.e., ratings and reviews) to provide multiple layers of social proof, not just one.

In addition to working with influencers to tackle the sheer mass of content required for this transition, brands also have the opportunity to work with influencers in other capacities, like research. As McKenzie Guymon, the influencer behind Girl Loves Glam put it, “influencers know what their audience likes, so their knowledge is incredibly crucial to brands. I think helping brands bring products to their followers at a price point they want is so important.”

As platforms and brands continue to lean into e-commerce features, influencers, too, will need to re-evaluate their own strategies. As Emily Lewandowski, the influencer behind Some Pretty Thing put it, “In the next few years, influencers will have to make decisions about their goals and their own monetization strategies. Instagram becomes a platform that is only focused on selling instead of celebrating creators and their work, influencers will have to decide if their audience is ready to see sales content almost exclusively.”

How brands and agencies can capitalize on new social commerce tools to reach their audience in new ways

1. Stay ahead of the curve by connecting shopping catalogs on the back-end. In order to use any of the shoppable features on Facebook, Instagram, Snapchat, and Pinterest, brands must upload their product catalogs to the platform. While each media platform has different requirements, it’s important to understand what information is needed so that when new features come out, you’ll be able to be among the first in testing those features with your target audience. Also, by connecting your shopping catalog, you will will have access to advanced analytics and marketing tools that will allow for the correct attribution.
2. Test and learn features for new influencer campaigns. Don’t wait for consumers to catch up, stay ahead of the game identify key influencers to work with and keep testing new features so that once you understand how to use them, you can begin to work them into your campaign briefs. Despite consumers remaining somewhat skeptical of certain elements of social commerce, social media platforms are constantly testing new features geared towards retail. New features remain a test-and-learn opportunity for brands, with first-movers having an inevitable advantage over others.
As such, it’s also important to understand each platform’s social commerce tools are different, and may be used in a different ways to reach your target audience. As part of your larger marketing strategy, it’s important to identify which media channels make the most sense for your brand, given where your target audience is spending the majority of their time.
3. Integrate social proof and continue to invest in social influencers to close the gap between brands, e-commerce, and social networks. Working with influencers, because of the inspiring photography they create and produce that make consumers want to shop, are integral to making this successful. While branded content can aid in product discovery and brand awareness, it doesn’t garner the same levels of engagement as influencer-generated content. The value of influencer-generated content is what drives this process towards success, as are the influencer marketing platforms and influencer marketing tools to deliver the right results.
Download our latest Q4 2018 Influencer Marketing Quarterly Trend Report to learn more about some of the key social media updates and trends affecting the influencer marketing sphere and informing your influencer strategy.