Social commerce describes the convergence of social networks and e-commerce as social media is becoming increasingly more influential on consumers’ purchasing decisions. Popular examples of social commerce influencers and enablers include photo-sharing social networks such as Pinterest or Instagram, or highly-curated e-commerce sites with strong social components such as Etsy, Fab or Fancy. Niche services such as Airbnb, a social platform providing individuals to rent living spaces short-term lodging, have also taken advantage of social networking features and strongly pushing the social aspect of their services to potential customers.
Social media is an important tool for marketers – as of May 2016, Facebook adoption for marketing purpose was near universal among marketing professionals worldwide, followed by Twitter and LinkedIn. Not all traffic sources are created equal though. Recent industry figures show that social still ranks behind search, email and direct navigation in terms of average shopping value. Market leader Facebook ranks first in terms of e-commerce referral traffic. Product brands with the most Facebook fans include Coca-Cola, YouTube, Red Bull and Nike Football.
The most popular social commerce enabling tools of omni-channel retailers in the United States include a Facebook page, a Pinterest presence and the “Like” button on product pages. Overall, the ability to share and discuss purchases on social media is a focus for many retailers and brands – unsurprising, as consumer survey data found that over a third of of U.S. internet users turned to social media to connect with brands to find out about products and services. Other reasons to connect with brands on social platforms are discounts and coupons, as well as showing support for favorite companies. According to a September 2016 survey, only 18.2 percent of internet users have purchased an item directly via social media. During the same survey, over 42 percent of responding U.S. consumers stated that they felt somewhat influenced by social media when making purchase decisions. However, the majority of U.S. consumers are concerned about the security of their data and their privacy when making social media purchases, indicating that social commerce is not as mainstream-ready as regular e-commerce.
Due to its strong visual impact, Pinterest is also a platform with strong social commerce potential. Promoted pins allow brands to push purchases. Same goes for Instagram, especially as luxury, fashion and lifestyle brands profit from the social network’s focus on imagery. Another factor in Instagram’s favor is the strong celebrity and influencer usage rate.
Retailers and consumers have already directed their attentions towards automated chatbot and messaging app commerce as an extension of social commerce - but as of 2016, the majority of customers in the United States is reluctant to try it.
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