Social media’s impact on the way people communicate and interact with each other online is as strong as ever. A report compiled by Hootsuite and We Are Social revealed that there are now over 3 billion people in the world, nearly 40 percent of the world’s population, on some form of social media.
Despite social media’s continual growth, however, retailers have yet to use it to its true potential. Both e-commerce and traditional stores view social media as a place to runs ads or post pictures of products, and, while these networks are useful marketing platforms, they’re capable of much more.
The Current Climate
Social commerce, or the process of buying goods and services directly through social media, remains untapped by most retailers and unused by most consumers. In our recent survey, we discovered that while 46% of shoppers find products they like through social media, only 18% have actually used a social commerce feature like a Buy button.
The lack of adoption is often anecdotally attributed to a variety of reasons, including the casual nature of social media or the fact that some consumers don’t know they can shop via a social network. But while these factors may play a part, they are not the main reason social commerce hasn’t seen widespread adoption.
According to our survey, 80 percent of shoppers are in fact familiar with the concept of social media shopping. When asked what stops them from purchasing directly through a social media platform, 71 percent cited the security of their credit card and banking information as a major concern, closely followed by privacy, or the safety of their personal information and shopping history. In other words, while consumers may be intrigued or even influenced to purchase a product or service they see on social media, they question whether their private information will be compromised if they shop directly through the platform.
The Impact of Emerging Technology
Consumers’ temporary uncertainty won’t be enough to derail the future of social commerce, however. After all, two decades ago people were hesitant to enter their credit card information through the Internet, and last year e-commerce retail sales hit over $450 billion. Part of the reason social commerce and other forms of online shopping could see more popularity is the consistent influx of new and emerging technologies, specifically chatbots. Chatbots have been around for years, but in recent years they have improved and are being utilized more frequently across a range of industries, including customer service and retail.
Like social commerce, conversational commerce, or the act of shopping through chatbots on messaging apps, has not been embraced by the public, but the tide could turn. In fact, over 70% of users who have interacted with a messaging chatbot called the experience helpful or informative. As people become more familiar with chatbot shopping and experience the ease of conversational commerce, they’ll be more likely to trust it as a legitimate, safe way to transact.
Staying Ahead of the Game
While consumers remain skeptical of social commerce, social media platforms are starting to integrate more elements geared toward retail. Facebook announced it would introduce AI features like price-range suggestions and auto-categorization in Marketplace. Instagram, ahead of the launch of its standalone shopping app, recently released a shopping tab on its Explore page, which allows users to view products from various sellers in a dedicated feed. Perhaps the most innovative retail feature comes from Snapchat, which will allow users to take a photo of a product or barcode and then buy that item or something similar on Amazon.
These features won’t be suitable for all retailers, but as these platforms and more continue to invest in retail, e-commerce stores should stay aware and take advantage of and try out new social commerce features as they become available.
Though the current state of social commerce looks a little dim now, retailers should prepare for the future as social media’s influence continues to gain momentum, chatbot technology continues to improve, and more social media platforms begin to invest in retail features.
Sumo Heavy is a digital commerce consulting and strategy firm.