The social commerce opportunity

The launch of Facebook Shops is another sign that the West is following the example of Asia – and China in particular – when it comes to social commerce and this is likely to redefine how brands use social channels to meet advertising goals.

In The WARC Guide to e-commerce and the future of effectiveness, Neilson Hall and Allie Tattersall of Reprise UK explain that while social ads have in the past been focused around driving awareness, the new Shops format means brands will soon be able to directly measure sales driven from social media.

“Further to this, we will have the opportunity to influence consideration in ways never seen before, with the added benefit of keeping users in-app,” they add.

The example of China is instructive as social commerce there is expected to comprise 20% of all online purchases this year. The key platform for this is WeChat, which started as a messaging app but is nowadays truly multi-purpose.

“With its own payment system (WeChat Pay) and established commerce arm, it’s an indication of where Facebook might see itself in the future – certainly movements into digital currency (Facebook Libra) and Shops support this theory,” say Hall and Tattersall.

Facebook isn’t the only platform pursuing a social commerce goal; as well as sister company Instagram, Snapchat, TikTok and Pinterest have been experimenting with formats that facilitate seamless purchase.

That means that brands need to think carefully about where social commerce and particular platforms might fit into their existing e-commerce structures.

“As COVID-19 has accelerated the e-commerce revolution, we are likely going to be seeing many more contextual commerce platforms arrive to market, so differentiation and simplicity will be key, for each platform, users and brands,” the authors say.

And while there’s a huge opportunity to drive sales via social, brands also need to consider how they can retain valuable first-party data which they do not receive from third-party sales channels.

“We eventually expect to see social commerce become more and more prevalent, perhaps even to the point where it genuinely rivals the likes of Amazon,” Hall and Tatersall conclude.

For more details, read the article in full: Facebook Shops and the future of social commerce.

Sourced from WARC