Social Commerce and Video Streaming: The Future of Shopping

While the global pandemic caused significant economic turmoil in many fields, the e-commerce market has seen a fantastic boost. According to Statista, in 2019, the total volume of transactions in the e-commerce segment amounted to $3.35 trillion, and this number reached the $4.9 trillion mark in 2021.

The “new normal” has brought fresh trends reflecting the ways consumers and businesses adjust to the current circumstances. Social commerce, a set of e-commerce techniques and tools related to social interactions, has become one of the main drivers of e-commerce growth. The Rocketech analysts summed up the latest social commerce trends and our ideas about the future of retail in this guide.

What Is Social Commerce?

Social commerce definition (also s-commerce or social e-commerce) may seem confusing at first. The term was coined by Yahoo! in 2005 to define “a set of online collaborative shopping tools” that included user ratings, pick lists, and other content-sharing practices. The concept, however, is credited to Steve Rubel and his description of collaborative e-commerce tools. Both sources have the same underlying idea — the content is user-generated.

While the concept is rather broad and ambiguous, there are three main definitions of social commerce.

1. Social media shopping is a separate s-commerce trend.
2. In a broader sense, social commerce is a set of practices aimed at digital interaction with the target audience, leading to direct sales.
3. Social commerce is a subset of e-commerce that uses online and social media to facilitate purchases and sales of goods and services.

At first, the term was used merely as a definition of user reviews and a recommendation for online shopping. Today, the social commerce market includes sales of goods and services on social networks, messaging apps, ad sites (Craigslist), and other P2P platforms (BlaBlaCar or Airbnb).

Social Commerce Tools

While social media marketing (SMM) best practices are aimed at redirecting traffic to a company’s website or online store, s-commerce utilizes the social media platform functionality. The entire purchasing process — from familiarising with the product to decision-making and payment — takes place exclusively on the social network.

Although traditional shopping is decidedly convenient, it often lacks the emotional aspect. The social experience is a powerful advantage of offline shopping. After all, people often turn shopping into a form of pastime with friends and loved ones. It involves communication and the exchange of views. The idea behind the social commerce trend is to make the online shopping experience as close to real-life social interactions as possible.

Social media platforms help consumers seek feedback, look up recommendations and follow trends. People tend to trust personal opinions more than advertising. On top of that, most social networking services offer built-in instruments for data analysis or targeted ads. Generally speaking, the social commerce business model uses a combination of tools and approaches. Here are the most effective ones.

User Reviews and Recommendations

People quite easily believe someone else’s experience, despite the constant attempts of sellers to fabricate reviews in their favor. The widespread practice of falsifying the reviews on companies’ sites led to the fact that consumers trust the reviews on third-party platforms.

• 95% of consumers check online reviews before making a final decision on making a purchase. 
• 88% of consumers tend to trust online reviews as much as they would rely on personal recommendations from family and friends.
• Product pages with at least one review demonstrated a 354% conversion increase. 

Messenger E-Commerce

China was the pioneer of messenger sales. Launched in 2011, the super-app WeChat has been supporting internal payments between users over the past few years using the built-in WeChat Pay payment system. In 2021, the total number of WeChat users reached 1.24 billion. The messenger app was reported to facilitate almost $250 billion through third-party services and “mini-programs” annually. The super-app allows its users to get taxis, buy clothes, order food deliveries, and much more.

Popular messengers have distinct advantages:

• It’s an extra way to communicate with your customers.
• They allow you to respond instantly.
• They provide options for automation through chatbots and push notifications.
• They can be integrated with CRM and analytics systems.

But the most relevant benefit of this mobile and social commerce instrument is a personal approach to selling. When selling simple goods, information about cost, availability, and delivery times is usually sufficient. However, in the case of more complex and personalized products and services, websites often don’t provide enough detailed information for every customer’s question. Integrating a messenger option helps businesses solve this issue.

Video Streaming Platforms

Since the global pandemic and related lockdowns changed shopping behavior, many retailers couldn’t provide their customers with face-to-face personal communication with guru-sellers and shopping assistants. This challenge boosted the live video streaming trend that imitates the live shopping experience.

• 51% of UK- and US-based consumers rely on YouTube videos to find and research products.

Social commerce live streaming is a way to leverage offline tools online through videoconferencing: a visitor enters a product or service page, presses a button, and “meets” a sales assistant ready to provide the necessary advice. Such live streaming often targets groups of potential buyers who can make a purchase with just a couple of clicks during the event.

Currently, there are three principal approaches to organizing “remote live sales”.

1. Marketplaces with streaming instruments.
2. Social networks.
3. Broadcasting technologies and software on the company website.

A video streaming platform for built-in interactive shopping can become a game-changer for many retailers. With relatively cheap traffic and a large audience, such services allow sellers to organize mass broadcasts and reach thousands of potential consumers who can instantly buy the demonstrated goods.

Group Buying

Group or collective buying is not a new concept. But it’s still a popular way to save. The underlying principle is to collectively order the number of goods sufficient to receive a wholesale discount from one supplier. The model is particularly common when it comes to everyday necessities like diapers, baby food, household chemicals, etc. 

Here, China is the world leader again. Pinduoduo, the well-known Chinese marketplace, focuses exclusively on the group buying concept. The name translates as “together, more savings, more fun”. Besides collective buying, the platform has gamification features. Starting with selling farm products, today, the tech platform covers various categories of goods. As a result, Pinduoduo’s revenue in 202 reached almost 94 billion yuan (approximately 200 times increase since its launch in 2015).

Social Network Pages as Online Shops

Many social networks (like Facebook or Instagram) can be used as platforms to host an online store. You cannot fully customize such a store. Yet you get free hosting, a convenient set of efficient tools, a massive target audience, and organic and paid promotion. 

The researchers from the Technical University of Madrid and the University of Nebraska-Lincoln formulated the social commerce framework that includes four main agents: customer, merchant, platform, and context. The framework’s key elements are the driving force behind the social media retail model.

• 67% of consumers can be convinced to buy products after seeing social media ads.
• 54% of users browse social media looking for information on products they intend to buy. 
• 42% of buyers discover new products on social media platforms.

In most cases, social networks help businesses understand their audience better than company websites as they provide necessary analytics tools and the option of direct and instant communication with the customer. However, having your store on a social media platform also means you are completely dependent on the network’s internal rules and can lose the working business.

The Future of Online Shopping

The statistics show that people are willing to use social networks as an information source to research the products and services they are ready to pay for. It’s logical to conclude that they would make purchases right there without switching to third-party resources. The idea of total convenience forms the entire multi-billion social commerce industry. The consumer algorithm is simple: “I saw, I clicked, I bought”.

Social commerce platforms open all new possibilities to increase profits, from reaching out to larger audiences to multiple technical advantages like live video streaming. Although using social networks is still the most popular choice, many businesses opt for creating their own digital products with a high level of customization. If your business is ready for this strategic move and you are looking for a trusted tech partner, the Rocketech team is happy to share our experience and expertise. Contact us today!