How to Lead the Trillion-Dollar Social Shopping Revolution

While the metaverse is making all the headlines lately, savvy marketers need to shift their focus to something far less theoretical and much more critical to the bottom line – social shopping, a mobile-first form of commerce expected to reach $1.2 trillion in global revenue in three years.

Growing three times faster than traditional e-commerce, 64% of social media users have already purchased from a feed. This means the 2.5 hours a day that consumers spend on social platforms has evolved from an awareness play to a sales opportunity. Brands that understand the nuances of social shopping and implement activations that effectively blend commerce with content and community will lead growth and speed past side-tracked competitors.

While the term “social shopping” can mean a myriad of things, it boils down to the combination of social experiences and e-commerce transactions into a single path to purchase, categorized in three ways: (1) Content-driven, (2) Experience-driven, and (3) Network-driven.

Content-driven

Social media content that drives discovery, engagement and commerce-based calls to action such as shoppable posts represent one of the most common forms of social shopping. As we’ve previously written, all top social platforms now have some element of commerce baked into their offerings with Instagram being the most accessible – but that’s about the change.

TikTok is set to release a number of more integrated commerce options that will likely accelerate its already meteoric growth. Soon brands will be able to tap into organic shopping opportunities on the platform as well as explore paid options linked to commerce. Brands like Levi’s, Walmart and Glow Recipe have seen early success. Maybelline’s Sky High Mascara drove sales and 400 million+ views through seeding products to creators.

Experience-driven 

There’s a difference between buying and shopping, and it's all about the experience. Catalog-like e-commerce pages have grown stale and consumers (especially Gen Z and millennials) crave for something more engaging and immersive. Video games have contributed to the desire for this new aesthetic, providing an experiential model for what retail can be. Concepts like gamification, scarcity, 3D navigation and live streams are shaping the future of shopping.

The video-first platform NTWRK, which combines live shopping with entertainment and the ability to shop limited-edition drops, has soared in popularity expanding from streetwear and collectibles to fashion and beauty. The well-known Chipotle and e.l.f Cosmetics makeup palette collaboration for example generated significant earned media and sold out in a matter of minutes. MCM Fragrances also launched a sell-out drop on the platform in late 2021 for their Eau De Parfum Necklace.

Obsess on the other hand, takes an alternate approach to experience-driven commerce creating 3D virtual flagships for retailers like Coach, Tommy Hilfiger, Charlotte Tilbury, Dermalogica and Mary Kay among others. Features like “shop with friends” socialize the experience driving word-of-mouth alongside revenue.

These tools give brands an opportunity to create digital pop-ups on demand, a powerful way to connect with consumers - especially for those without a brick and mortar retail presence of their own. Additionally, experiential innovations like AR shopping (that can drive 94% higher conversion rates and lower returns by 25%) will soon become table-stakes for fashion and beauty brands as mixed reality becomes the norm.

Network-driven 

As consumers continue to trust brands less, the role that family, friends, and creators play in the path to purchase becomes increasingly vital. Strategic marketers will double down on peer-to-peer efforts and look to creators to drive conversions as successfully as they drive impressions. This means pivoting to activations like live-selling that excite their fan base and showcase products.

While Instagram has been criticized for not compensating influencers, new functionality on the platform now allows them to create their own shops and receive a sales commission. Over 100 brands are already participating, including Sephora, Charlotte Tilbury, BareMinerals, Zara, and Laura Mercier among others. Breakthrough brands will use these tools to leverage creators in new ways from limited-edition collaborations to curated capsule collections. Given Instagram’s shift to video, look for Reels to become a high priority shopping format “inspired” by TikTok’s e-commerce expansion.

In Summary

With two of China’s top livestreamers recently selling $3 billion worth of products in a single day, the future for social shopping looks bright as the US follows Asia’s lead in 2022. Now is the time for bold brands to embrace a test and learn mindset around social shopping and expand KPIs well beyond reach to finally include revenue, a social metric that has remained quite elusive to date.