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The Covid-19 pandemic changed the landscape of ecommerce last year. It forced brands to engage with consumers in new ways with many spending more time online. According to a recent report from Adobe, this changed behavior accelerated the growth of ecommerce by four to six years, and it’s expected to continue as the world returns to something resembling normal.
Other reports from the past year highlight the massive shift—72% of consumers plan to shop online regularly in six months’ time, with a significantly lower percentage (57%) intending to shop at brick-and-mortar stores. This demonstrates that digital platforms are where businesses need to shift their strategies to meet consumers. But where should brands focus their energy?
Social commerce & transactable points
Brands need to be looking for ways to integrate social platforms into their ecommerce strategy now more than ever. Given the breadth of users and data available on key social platforms, brands can now develop targeted advertising using advanced algorithms to deliver content they know is relevant to consumers, which leads to more purchases.
As the pandemic has drastically shifted ecommerce integration, we’re seeing ecommerce, social media and advertising intersect in the same space. This is apparent as the number of U.S. buyers purchasing through social media accelerated 25.2% to 80.1 million in 2020, and will grow another 12.9% to 90.4 million in 2021, according to eMarketer.
This begs the question: How will this integration expand in the future? As ecommerce explodes, storefronts will soon become a thing of the past. Every point is a potential transaction now. Notable examples include embedded marketplaces on Instagram and social content pushing to external links or stories with swipe-up features. The pandemic forced social platforms to adapt these features more aggressively as businesses needed digital offerings quickly, especially smaller businesses without the infrastructure to adopt their own.
We’re now entering a new era where the emerging strategies around brand interactions on social can become even more effective through leveraging analytics generated by advanced algorithms. Now that consumers are more accustomed to buying many things online, there is a market for social commerce to expand.
This is where advertising can come in and accelerate ecommerce engagement on social media. According to eMarketer, U.S. social network ad spending in 2021 is projected to reach $48.94 billion, a 21.3% rise. Key players in this space include Facebook, Instagram and TikTok, where consumers regularly engage with ecommerce offerings. Each of them brings their own strengths as platforms:
- Facebook: One of the top choices for advertisers given its robust marketing tools, Facebook’s user penetration is also strong, leading to converting more engagement into purchases: 18.3% of users reported buying something on the platform in a June 2020 Bizrate Insights survey. The development of Facebook Shops is another example of growing social commerce offerings.
- Snapchat: Augmented reality is the next step in bringing products directly into the home. Snapchat is ideal for AR integrations and, according to Accenture research, it is a key target area as 47% of consumers say they would pay extra for a product if they could customize or personalize it using immersive technologies.
- Instagram: Known for its influencer culture, Instagram is considered one of the top platforms for marketers given the strong focus on multimedia posts and the simplicity of its checkout experience.
- TikTok: A fast-growing social media player, TikTok features advanced algorithms ideally designed for ecommerce advertising to offer products at the most effective time and places to convert transactions. Walmart also now owns a 7.5% share in TikTok and pushed its products on the platform using algorithms, demonstrating the value of social commerce to legacy retail.
The future of ecommerce
For brands, the acceleration of online shopping has forced them to adapt, and we’re seeing some intriguing strategies further converging the worlds of social media, ecommerce and advertising.
Brick-and-mortar retailers like Sephora and Dunkin’ Donuts, for example, have developed employee influencer networks within their workforce. They did this by identifying workers active on social platforms with large followings and leveraging them to drive purchases.
One area where we believe we’ll see even greater growth for advertising is video. Livestreaming giant Twitch saw 17 billion hours watched in 2020 and is now valued at $15 billion, while TikTok was on track for $27.2 billion in ad revenue in China alone for 2020. During the pandemic, ecommerce giant Alibaba shifted InTime, its department store operator, to livestreaming and online sales. All of these are fascinating developments and demonstrate how the ecommerce boom will only grow.
The rest of 2021 will be an interesting time to watch the evolution of ecommerce as the lines blur in social media to bring more native experiences that allow consumers to buy where they are. Whether brands seek to develop their own virtual stores, leverage advertising on social media to drive traffic to their products, or support their own network of influencers, we anticipate a transformational year for ecommerce.