What social commerce means for small business.

Dec 16 2020 | PayPal editorial staff | 4 min read

The phenomenal growth of social commerce worldwide has given rise to a simple but compelling proposition for businesses – the opportunity to meet customers where they hang out.
 
Rather than relying on customers searching for a product or service or just happening to land on an eCommerce site, social commerce (aka sCommerce) puts businesses right in the centre of the action on social media platforms and apps where billions of people around the world are active daily. It’s a movement with all-round appeal as it provides convenience to an ever-expanding number of ready customers – trend seekers who love to discover and explore new products – and delivers returns for merchants.

Facebook and Instagram may be the go-to places to check in with friends and find inspiration, but they’re also increasingly where customers are buying the things they love or need in the moment. Whether it’s movie tickets, an Uber ride, a new outfit for the weekend or a product they’ve never even heard of before they saw your ad, they can buy it in a few steps straight from their friends feed.

The growth of buying opportunities on social networks simply brings the awareness and product discovery phase closer and can create a shortcut to conversion. The PayPal mCommerce Index showed 19% of participants bought something they saw on social media in the 6 months prior to the 2018 survey. In 2019, that number jumped 27%.


This trend is set to keep growing exponentially as social shoppers predominate in younger age groups. PayPal’s research shows 33% of Gen Z mobile shoppers make purchases when socialising with friends, and more than half had made a spontaneous purchase, which is in line with social commerce’s “right now” promise. The PayPal mCommerce Index shows Australian businesses are fast catching on, with 18% accepting payments via social platforms.

“Social commerce comprises an expansive list of options including group buying, social shopping, mobile apps, retailers adding social features and shopping integrated into social media,” explains Dr Rohan Mahadevan, PayPal Senior Vice President International Markets.


“Making use of these different channels is something we’re trying to bring out and communicate to merchants,” he says. “It’s important because it’s where people are spending their time."

According to the 2017 Sensis Social Media Report, almost 80% of internet users now have a social media profile. 59% of them access social platforms daily and 35% check in more than 5 times a day.


Ideally, businesses should choose a presence on the social platform that's right for them. However, the following two should be high on the list for consideration as they’re the top platforms used by Australia consumers, and offer the most developed products that support social commerce:
  1. Facebook is the most popular platform for Australian consumers who purchase via social platforms (83%, down from 81% in 2018). Its global potential is impressive with more than 2.32 billion active users monthly, presenting a massive opportunity to find new customers. It plies social commerce through ads in users’ newsfeeds and, more directly, through its Messenger app where products can be offered in-conversation without distracting redirections.
  2. Instagram’s popularity as a social commerce platform is tipped to move fast with its shoppable pins. In 2019, it accounted for 34% (up from 25% in 2018) of Australian consumer social commerce. High visual quality counts most on this fast-growing platform, with 60% of its 1 billion active users monthly saying they discover new products on Insta. It also brings access to an ever-growing crowd of highly targeted micro-influencers and the potential to launch exclusive Insta brands.
 
 
Low overheads, ease of setting up and a readily available customer base are just part of the lure of social commerce. “Social commerce also allows peer recommendations and reviews which have a high impact on purchasing decisions,” notes Mahadevan.


The bottom line for effective selling on social media is a seamless payment system. “Merchants and consumers want convenient and smart payment solutions that can adapt to the alternative eCommerce platforms, like mCommerce and sCommerce.”

6 tips for sCommerce success

  1. Choose the right platform. Instagram is image-led, while over half of Facebook users watch video. In a recent study, 46% of consumers said they’ve made a purchase as a result of watching a brand video on a social network.
  2. Stay fresh. Constantly refresh your social commerce content, being mindful that it’s about quality, not quantity. One or two posts a day is enough on Facebook or Instagram, but you should create a plan to keep yourself on track.
  3. Maximise the benefits. One video can go a long way on social commerce by using different angles and showing multiple styles or colours.
  4. Make it easy. Tag products in Instagram posts, making key information like pricing and product descriptions accessible with a single tap.
  5. Words and pictures. Instagram looks to be all eye candy, but it also holds the capacity to tell a powerful story in a short caption. Practice makes perfect.
  6. Stay connected. Interact with new followers. Like their posts. Leave comments. Your engagement with your followers drives engagement back to your brand.

 
The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.
The contents of this site are provided for informational purposes only. The information in this article does not constitute legal, financial, IT, business or investment advice of any kind and is not a substitute for any professional advice. You should always obtain independent, professional accounting, financial, IT and legal advice before making any business decision.