What is social commerce or social business? Why is it important for businesses? What is the relationship between social commerce and electronic commerce? What is the relationship between social business and digital marketing and social media marketing? What are the best social networks (platforms) for social commerce?
We live in a global village. First the internet and now social networks connect people all over the world. What is social commerce or social business? Why is it important for businesses? What is the relationship between social commerce and electronic commerce? What is the relationship between social business and digital marketing and social media marketing? What are the best social networks (platforms) for social commerce?
We live in a global village. First the internet and now social networks connected people all over the world.
Table of Contents
What is social commerce?
I don’t know if you have the experience of buying from Instagram or not and basically how much, do you buy from Instagram or Telegram. But I have a friend who checks out stores on Instagram if she wants to shop, and if they don’t have what she wants, she goes to websites or real malls. One of the accounts he has is for a girl who imports clothes and shoes from Turkey. His way of working is that he stores the goods and takes orders, he mails them to the customer. So,
“All steps of buying goods are done on the same Instagram (social network). And all customer and business communication is formed on the same social network. The customer does not need to go to the website and make the purchase. Everything happens on the same platform – that’s social commerce.”
As time passes and the number of social media users increases (currently, social networks have more than 4 billion users worldwide), businesses have more options for using social networks and platforms. A look at the most important social media marketing strategies of businesses in 2022 shows their activities and investment volume for marketing and sales on social networks. In fact, businesses are moving towards making all customer interaction and shopping experience happen on their popular social networks. Because businesses seek to maximize revenue and profit from social networks.
In one word,
“Social networks have become social commerce platforms, i.e. stores.”
Profitability of social commerce for businesses
Why has social commerce become important for all businesses in the world? Because it is profitable? Why and based on what data and statistics did businesses come to the conclusion that social business is good and profitable? In addition to promoting brand awareness and helping to build and maintain brand loyalty, digital marketing and social media marketing should ultimately increase business sales. Therefore, if businesses in all parts of the world did not gain profit and increase sales from social networks, a phenomenon called social business would not have appeared in the market.
Next, I will tell you with reasons and statistics why social commerce is profitable for businesses (it is important).
- It is predicted that in 2027 the income of businesses from online sales in the world will reach 27 trillion dollars.
- In 2020, a total of $89.4 billion in goods and services were sold through social commerce. It is estimated that that figure will reach 604.5 billion dollars in 2027.
- According to Meta (Facebook) statistics, 83% of Instagram users use these social media to find new products or services and 80% to decide to buy a product or service.
- 77% of consumers (in the US) purchased that brand over its competitor after having a positive interaction with the brand on social media.
- 91% of US businesses will increase their social media marketing budget in the next 3 years.
Putting together the mentioned statistics (even statistics about American businesses) tells the digital marketer of any business, whether small, medium or large, that sales and profits are on social networks and social media marketing. Because the customer’s preference is to find the product on social media, get the price and all the details there and make the purchase from there.
Benefits of social commerce for businesses
What are the benefits of social commerce for businesses? Of course, except for the great advantage that it is profitable for them. Social commerce helps businesses to
1. More customers see the business and comment about the business and its products.
As more and more customers use Instagram every day to find the product they want to buy, the content that businesses produce for social media, as well as user comments and influencer opinions, is important in their decision making. The company must paint a clear and complete image of itself and its products on social media for users. The statistics also show that customers pay attention to the image that is formed on social media to get to know the brand and business.
2. Know customers and their behavior better and more deeply
The number of likes, comments and saves of a post on an Instagram account is very important for business. With the help of that data, digital marketers can know their customers better and follow their marketing process more purposefully. Each social network has tools that provide the digital marketer with a part of the data related to the interaction of users with the posts of business accounts. Of course, a digital marketer can use social media management tools to get more data on user behavior.
3. Convert an interested customer into a buyer in the shortest time
Imagine you’re scrolling through Instagram and you come across a post about a business that sells the cosmetics you want. That business said to send a message to a certain number to buy. In that case, it is possible that you will give up or something will happen and you will not be able to make the purchase. Now imagine that the user saw the View Shop and entered the store directly. In that case, the customer would see other products in addition to the product he saw in the post. So, he completed his purchase in the same space.
The difference between social commerce and e-commerce
Electronic Commerce is a general term used to refer to the buying and selling of goods and services and the transfer of data, information and money through an electronic network, which is mainly the Internet. But as it was said, social commerce means a shopping experience that happens entirely on social networks. Therefore, neither e-commerce is social commerce nor vice versa. Social commerce is a part of e-commerce.
The best platforms for social commerce
Well, we have come to a very important question that the digital marketer of every business must answer: which social network should be the social commerce platform of the business? Instagram? Facebook? Pinterest? Or all three? To answer that important question, one point should be considered and another important question should be answered. First the question and then the point.
Which social media is more popular and has more users in the country where the business operates? If a business is active in America, it should consider Facebook and TikTok.
Not all social networks have the necessary tools to become a social commerce platform. Currently, Instagram (Instagram Shopping), Facebook (Facebook Shops) and Pinterest (Product Pins) have provided the necessary facilities and tools (such as product category tag and price, or the shopping cart icon on Instagram, or add to cart) for businesses so that they will be able to have a store on those networks. Of course, YouTube and TikTok are also adding the Shop now button to their features.
Of course, a business’s digital marketing team may decide that the business needs to have a store on all 3 platforms. To make better decisions, the digital marketing team of businesses should consider other factors such as data about the behavior and interaction of users with the brand on different social media.
“So, the best social commerce platform for one business is not necessarily the best social commerce platform for another business.”