After being touted for years as the upcoming “new thing” in retail, social commerce is finally in a position to have a major impact on how brands attract visitors and increase sales online. Social commerce involves connecting with consumers over social platforms to send them to e-commerce sites to make purchases. 

Analyzing the Influence of Social Commerce

Online retailers are always on the lookout for innovative strategies to improve sales. This includes any technology designed to drive traffic to their e-commerce websites and convert that traffic to sales. So, as 2019 starts to wind down, it’s time to look at the past year’s trends driving online referrals and purchases. Trends that are likely to continue to gain traction in the year ahead.

MDG Advertising’s experts recently studied data from a wide range of sources to answer some of the questions marketers are asking about social commerce:

  • How quickly is social commerce growing?
  • Which consumers are most inclined to engage using social commerce?
  • Which social networks are consumers most likely to use for social commerce?
  • What does the future of social commerce look like?

How Quickly Is Social Commerce Growing?

Social media only amounted to about 9% of all referrals to e-commerce sites in the first quarter of 2019. However, this share is tripled from the same period in 2016. Therefore, social commerce is the fastest growing driver of e-commerce referrals. According to eMarketer, citing statistics from Adobe, click-through traffic from social media has increased dramatically. Between the third quarter of 2016 and the third quarter of 2018 the increase was 110%. In contrast, direct access and traffic from referring websites slumped during that same period. 

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A closer look at the data also shows that more consumers are making purchases based on what they see on social media. Bizrate Insights, according to eMarketer, found that the number of American Internet shoppers who bought something online after seeing it on social media grew from 23% to 29% from December 2018 to April 2019.

Which Consumers Are Expected to Engage Using Social Commerce?

All demographics showed increased engagement in social commerce. However, a couple of groups are predicted to make more purchasing decisions based on information from social media than others. Thirty-six percent of female U.S. internet users have engaged in social commerce compared with only 22% of men. The trend is also popular among younger shoppers. Forty-two percent of consumers between ages 18 and 34 engage in social commerce. However, only 15% of people over the age of 55 are engaging in this way.

What Social Networks Are Consumers Most Likely to Use?

The leader in driving referral traffic to online retailers is Facebook. In the first quarter of 2019, Facebook accounted for 80% of all U.S. referrals to online retail sites. Instagram came in at a distant second with 11%. Pinterest accounted for only 8% of social referrals. Although Facebook dominates in driving referral traffic, it isn’t the network that the majority of consumers associate most closely with shopping. Instead, just 15% of Facebook users claim they use the platform to search or shop for products. In comparison, 47% of Pinterest users claim that they use the platform for shopping.

What Does the Future of Social Commerce Look Like?

The future will likely see social commerce become more consumer-friendly. As a result, consumers may soon be able to make more of their purchases directly on a social network. This will offer significant advantages for everyone involved. Consumers will avoid the hassle of having to click on another app or website. Likewise, retailers will see increased sales conversions thanks to easier purchasing. Additionally, social networks will see additional revenue in the form of referral fees.

The technological tools may be available to make direct purchasing a reality. However, it may still be some time before consumers are comfortable with the concept. According to eMarketer, 71% of U.S. Internet users say they have concerns about how social media platforms would safeguard their financial information. Another 65% of consumers are worried about how social media platforms may share their personal details.

What’s the Bottom Line?

In conclusion, there’s no doubt that social commerce is positioned to be a key factor in generating increased consumer traffic and sales. It seems likely that the influence of social commerce will continue to increase. As a result, to make the most of this trend, retail and social media brands must take steps to reassure consumers. Above all, it is consumer safety that will make the difference for social commerce success.

About the Author

Anthony Del Gigante is Chief Creative Officer at MDG Advertising, a full-service ad agency working with clients to develop creative, strategic, and functional solutions for their brands. Over the years, his unique talents in brand strategy, visual identity development, and brand activation have consistently delivered measurable results for a wide range of world-renowned clients, including American Express, Verizon, AbbVie, and Cushman Wakefield.