Social Commerce

Key Takeaway:

Social commerce, which combines product discovery with digital payment on social platforms, is predicted to exceed $1 trillion globally in 2023, driven by over 2 billion shoppers. However, trust in social networks and vendors remains a barrier for consumers. Marketers who address this trust gap can build a lasting advantage, as the average US social buyer is expected to spend $518 in 2022, increasing to $937 by 2025, with sales growth expected to continue through 2024.

Trend Type: Social & Business

Sub-trends: Social Commerce trust gap

April, 2023 • Less than 2 min read

Social commerce- a consumer experience on a social platform that blends the point of inspiration and the point of purchase- marries serendipitous product discovery with effortless digital payment to create shopping opportunities that are hard for many to resist.
Deloitte Global predicts that the market for social commerce will surpass US$1 trillion globally in 2023, driven by the purchases of the more than 2 billion people expected to shop on a social media platform in 2023. At the same time, Statista estimates that the social commerce market in Europe will be worth €56.3 billion in 2023, up from €35.3 billion in 2021. But it is not consensual if Chinese e-commerces’ success with these features can be translated into the Western world. While some Western social media apps are pulling back on live shopping (Meta decided to shut down its live commerce functionality on Facebook and affiliate product tagging option on Instagram, for example), Asian companies have been investing in social commerce outside of China – namely TikTok in the live shopping feature in the USA.
At the same time, consumers say the most significant barrier to purchasing through social is trust in both social networks and vendors, according to an Accenture survey of social media users in China, India, Brazil, the US, and the UK. The bottom line is marketers haven’t faced up to their role in this trust gap yet, and those who master the basics will build a lasting advantage. For instance, of the marketers Hootsuite surveyed, 37% said that entering payment information on social platforms was the biggest issue for social buyers—in line with the results of Accenture’s consumer survey. But while almost half (48%) of consumers told Accenture that vendor reputation and product quality were their primary concerns when shopping on social, less than 8% of the marketers we surveyed said the same. Ultimately, marketers who master the basics will build a lasting advantage. According to Insider Intelligence, the average US social buyer will spend $518 via this channel in 2022, up 27% from last year. Annual spending will increase by $419 per buyer over the next two years, reaching $937 in 2025. And social commerce sales growth is also expected to remain above pre-pandemic levels through 2024.
“Most of social media is lean-back entertainment. And so, you’re there to look at pictures of your friends or get the news or watch dance videos. What are you not there to do? Shop. With Pinterest, more than half of the users are here to shop.” – Bill Ready, CEO of Pinterest at Shop Talk Las Vegas, March 2023.

Use Cases

Patagonia

Social Commerce: Outdoor clothing brand Patagonia uses its Pinterest Pin board to mimic the style and layout of its website, creating a consistent and user-friendly customer experience for visitors who click through from its eCommerce store. The Patagonia page has a red checked mark here, suggesting it’s a verified account and notable brand. This is different from the blue check, which simply refers to a verified merchant.

Sephora

Social Commerce: In June 2020, Sephora was one of the first stores to offer Instagram Shopping, which allows customers to buy right from the Instagram app. Sephora US knew early on that social shopping would be massive because of their partnership with Sephora China.

Use Cases

Patagonia

Social Commerce: Outdoor clothing brand

Sephora

Social Commerce: In June 2020, Sephora was one of the

Sub-Trend Sources
Social Commerce: Delloite TMT Predictions
Social Commerce trust gap: Hootsuite Social Trends