Social Commerce – What is it and what could it mean for you?

Social media platforms are making it easier for users to make purchases without leaving their feed – we explain how the functionality is changing and explore what it means for brands in the UK.

While Social Shopping in the form of product tagging, product catalogues and specific product advertisements has been available to brands for some time now, it seems these are just the foundations for a much bigger shift in how social networking channels are to look in the coming years.


What is Social Commerce and how is it different to Social Shopping?

Social Commerce is the ability for users to purchase products on the platform without needing to load up an ecommerce website. This added convenience is the step that succeeds what has previously been available to users and brands, Social Shopping.

Social Shopping is the existing ability for users to browse products from brands and influencers, before being directed to a website to convert. Currently brands are able to create a catalogue of products through the Facebook Commerce Manager application to promote directly on both Instagram and Facebook, in organic posts or paid advertisements.

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Figure 1 - Instagram Shopping Feature


Who is the driving force behind Social Commerce?

Although advancements into the Social Shopping game by platforms such as TikTok, Twitter and Pinterest have been noticeable, Facebook and Instagram are leading the social commerce charge with the introduction of their new ‘Checkout’ functionality.

Facebook and Instagram Checkout is a way for users to make two touch in-app purchases of brands’ and influencer endorsed products. Each Checkout purchase is charged a 5% fee or a flat rate of $0.40 for purchases under $8, with customers’ bank details being handled by Facebook’s secure payment service, Facebook Pay. The Checkout functionality is currently only available in the US as a pilot before its global launch sometime in the future, however, Instagram especially are in the process of testing new shopping features globally which is expected to feed into the gradual introduction of social commerce across both Facebook and Instagram.

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Figure 2 - Facebook Checkout
 
Some Instagram users may have already noticed that a recent update to the app has introduced a change in layout of the app’s main navigation, aligning with the focus of driving sales through the platform. As part of testing, Instagram have replaced the old heart-shaped Activity button with a Shopping icon that opens a new section to the app. Here users can browse a marketplace of brands’ product catalogues, with the product suggestions being informed by the accounts the user follows.
 

“This is a small global test of the Instagram Shop tab that we announced in May. We’ll use this test to assess how we decide to roll this out further,”

– Instagram Spokesperson

 
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Figure 3 - New Instagram shopping icon

Instagram also recently announced that it has begun testing further integration of its shopping features, focussing on the relatively new addition to the platform, ‘Reels’, as well as IGTV. This will allow brands and content creators the opportunity to publish video content that promotes specific products they sell or are being paid to promote.
 

“Digital creators and brands help bring emerging culture to Instagram, and people come to Instagram to get inspired by them. By bringing shopping to IGTV and Reels, we’re making it easy to shop directly from videos. And in turn, helping sellers share their story, reach customers, and make a living,”

– Instagram COO, Justin Osofsky.


Facebook is also remodelling its functionalities for brands to create a social shopfront to display their products. Previously, brands have been able to list their products on their Facebook and Instagram accounts, but as nothing more than a list. However, with the new Custom Shop feature, brands will be able to create a more visually appealing and better structured collection of their products to facilitate a more logical shopping experience for users.


What Social Commerce mean for UK businesses?

As Facebook and Instagram Checkout are only currently available in the US and little is known about when the functionality will be launched globally, UK businesses can currently only watch, learn, plan, and prepare for its wider release.

Since brands realised social was an avenue to connecting with their customers, every brand and their dog has sought social fame in the name of interaction, with little ability to prove an ROI on the time invested. Maybe Social Commerce is just the thing to facilitate future interaction with customers while being able to prove value outside of engagement metrics.

Deciding whether Social Commerce is right for your business is a vital step in understanding if it’s worth the hassle. Instagram Checkout lends itself to brands that have a very simple offer, a defined – and ideally visual - product that’s available at a specific price. Currently, to list a product on Facebook and Instagram, a brand must prove that the product can be purchased on their website. However, it isn’t clear how Facebook will determine that a product is legitimate. If brands are not required to prove authenticity by linking to their ecommerce site and are able to take payment directly through the social channel, this could provide a free and simple solution for smaller brands that haven’t previously invested in an ecommerce service, to sell their products online.

Social Commerce isn’t explicitly alive and kicking right now, however, with some of our clients already utilising Social Shopping to drive traffic to their ecommerce sites, we as an agency are in the perfect position to ensure our clients are well equipped to benefit first.


While it's difficult to predict developments in the world of social media and ecommerce, one thing is for sure, so long as the Social Network titans can convince consumers that Social Commerce is a secure way of shopping, the way we shop online may be on the verge of being redefined.

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To find out more about how true can help your business unlock the potential of social, get in touch with Sam.