3 Fundamentals of an effective social commerce strategy
The concept of social commerce goes well beyond adding another channel. It’s a customer-centred strategy for business that has the potential to drastically alter how consumers interact. It makes it possible for instant communication, immediate feedback, and whole new experiences. In actuality, it subverts conventional transactional interactions.
Social commerce provides brand managers with nearly limitless opportunities. But so are the difficult decisions it offers. The difficulty for companies is understanding where to compete in a new arena without an established playbook to follow because there are so many types of engagement and various routes to market.
Brands are investing, and consumers are buying in, as social media platforms like TikTok, Instagram, and Pinterest introduce new commerce features, from shoppable Reels to product tagging in live-streams. As a result, by 2025, social commerce is anticipated to be worth $1.2 trillion.
So, how can marketers go about developing a successful social commerce strategy? What should they do first, and how can they succeed in a market that is starting to become cutthroat? Let’s consider some the few points in this blog –
Development of the effective social commerce strategy
We’ll look at the decisions brands must make in this blog to succeed in this competitive environment. And none of these are simple. The interactions between creators, influencers, customers, and platforms that make social commerce special also force corporations out of their comfort zones.
Why?
They have to give up some power in order to co-create social commerce experiences. They need to rely on the partners they collaborate with—including their end users—to establish, enable, and naturally evolve the most meaningful forms of connection rather than meticulously managing the end-to-end experience.
The community-driven flywheel
Positive reinforcing loops, sometimes known as “flywheels,” are one way that e-commerce firms can accomplish important goals. An ideal customer experience is a key component of Amazon’s growth flywheel since it helps drive traffic, which in turn draws more brands and sellers to the marketplace. The cycle continues as a result of Amazon being able to lower pricing and enhance other aspects of the customer experience.
Flywheels can also be thought of in the context of a community. This has to do with the capacity of a group of customers—who are a part of an engaged online community—to generate sales and promote business expansion. For instance, the greater the number of users who connect with and interact with material (related to a common interest or category), the greater the visibility and engagement of that community among its members, as well as the likelihood that new users will join. Sales can potentially result directly from this action, especially if the information includes favorable product reviews.
Head of vertical, ecommerce at TikTok Simon Hofmeister described the platform as being full of “lots of niche places for people to find other people who like what they like, and who are talking about what they like in short form, snackable, entertaining, video format, explain how TikTok drives this type of community-driven shopping. Whatever the subject matter—books, exercise, or food—there is probably a community that produces and spreads related material.
The first step for businesses is to learn about this group. With its community flywheel methodology, which outlines five self-reinforcing marketing methods that can activate the flywheel, McKinsey expands on this idea. The use of hero items to generate online buzz, expressing brand values, employing eye-catching material to spark debate, and lastly making it easy for communities to make purchases via social media are some of these techniques.
A notable example of a company that has adopted a community-driven strategy is Nike, which has tailored its content to appeal to certain communities, like members of its Nike Run Club, and to increase general brand engagement. Over 9.4 million people have seen Nike Run Club-related videos on TikTok, a substantial portion of which came from user-generated material that naturally nourishes the community and offers suggestions, guidance, and knowledge to other runners.
Choosing the right channel and format of content
For a number of reasons, choosing the appropriate channel for social commerce is crucial. Marketers should first think about the audience they want to reach and how various platforms could support this. For instance, TikTok is biassed towards a younger demographic, with users between the ages of 18 and 24 making up 42% of the platform’s global population as of April 2022.
The variations in content forms on each platform come second to the audience. While some platforms, like Facebook, TikTok, and YouTube, are still mostly image-based, others, like Instagram and Pinterest, are driven by short videos. In addition, content formats should be taken into account in accordance with user behaviour (i.e., how that content is consumed). On TikTok, users are targeted based on the kinds of videos they inevitably watch and interact with, whereas on Pinterest, users frequently participate in purposeful search behaviour to find content in a certain category of interest. Marketers should think about how content — whether it’s centred on entertainment, education, or advocacy — may best match with this and how people on social media might discover and engage with it.
Additionally, marketers must think about the goals of their company and the platforms that would be most effective in achieving these goals. Marketers will probably review their social advertising budgets in 2023 as long as the economy is unclear. Contextual targeting is becoming more popular as a result of this, along with the phase-out of third-party cookies, as brands explore for new ways to target consumers on social media.
According to Tamara Littleton, founder and CEO of The Social Element, TikTok Pulse, the company’s new contextual advertising platform, may attract organisations looking to devote funding this year. By analysing the content and putting adverts appropriately, she added, “This kind of contextual advertising solution can help marketers reach the proper audiences without violating the need for privacy.” “And it’s obvious that TikTok’s investment in better ad technologies won’t come at the expense of what it does best—facilitating creators” (source). TikTok has agreed to divide half of the money with the creator whose video came before the ad.
Malcolm Hill, Mindshare’s social commerce director, who was also featured in the report, emphasises that firms should focus on becoming “retail ready” rather than only on social interaction. Have your product information on hand so you can design your social commerce strategy with a focus on achieving business goals, the expert advised. Focus your efforts on selling products that are having an impact by using margin and returns rates.
Creating an excellent measurement framework
Finally, the success of social commerce depends on creating a framework for measurement. Platform metrics, business metrics, and third-party measurement analytics are three main sorts of indicators that marketers should align, according to Malcolm Hill of Mindshare. For instance, he stated that “this requires looking beyond last-click revenue targets and asking, “Is this solution improving brand recognition or product consideration?” and “How is business social commerce activity impacting other channels?” when it comes to business KPIs.”
This is where marketing mix modelling, a strategy that helps marketers to gauge how varying components affect sales and ROI, comes into play. Recently, Meta and Deloitte collaborated on a new measurement framework called “Measurement 360,” which, according to Meta, “helps advertisers leverage numerous best-in-class measurement systems in tandem to track all components of a marketing plan.”
Although this method is nothing new, Meta’s concentration on first-party data, which it claims marketers must now leverage in order to future-proof strategy, is a crucial component of its approach (in combating so-called “signal loss” in direct response advertising). According to Deloitte, this will necessitate dismantling organisational silos, such as closer integration between IT and Marketing, in order to link data collection to measurement and campaign activation.
These divisions can be broken down by integrating social media with CRM systems, allowing teams across organisations to gain priceless information from social media interactions. Brands can then use the information from social CRM to develop sponsored social initiatives that are more focused and successful.
Conclusion
During the epidemic, when individuals were scrolling the internet more frequently, online shopping experienced a meteoric rise in popularity. Social commerce connects with consumers on their preferred social media networks, where they are already active.
People desire simplicity, a personalised shopping experience, and the ability to complete purchases in the fewest number of steps feasible. All of these needs are satisfied by social shopping because the entire process—from product research and discovery to the payment stage—takes place on a social media platform.
No matter what sector or niche your company operates in, you may succeed in social commerce by combining influencer partnerships, consumer calls to action (such as “swipe up to purchase”), and user-generated content.
Overall, it can be said that, for brands and merchants, social commerce is a virtual pot of gold at the end of the ecommerce rainbow. Every major social media network, from Instagram Checkout to TikTok Commerce, aims to draw consumers and encourage them to start making in-app purchases. Another channel that ecommerce businesses can utilise to reach their customers is the new method of shopping.