COVID-19, as we all know, changed everything, everywhere. However, as many suffered and lost their jobs, one industry thrived off the restrictions and stay-at-home orders: online retailers. With only so much motivation to work and in the comfort of our own homes, online shopping became a hobby for many – sparking a new generation of social commerce.
After the surge of online shopping, global e-commerce sales are expected to hit $4.2 Trillion in 2021. While Amazon, the world’s largest online retailer, and arguably, the catalyst behind online shopping; saw its profits increase by nearly 200% since the start of the COVID-19 Pandemic. E-commerce is no new concept and is by no means going away any time soon; however, as the world adapts to its new normal, social platforms are beginning to find their feet in this space.
What is Social Commerce?
“Social commerce is a subset of e-commerce where everything happens on social media – product discovery, search, click-to-purchase, and post-purchase support.”Cameron Uganec, Later.com
Simplified, social commerce is a one-stop-shop to discover and purchase products – the sales funnel taking place all in one place. Unlike traditional e-commerce platforms, where consumers bought from a website or third-party marketplace, this subset of e-commerce is direct and allows businesses, big and small, to engage with consumers at every point of the sales funnel.
The global social commerce market is valued at an estimated $89.4 Billion as of 2020 and is expected to reach $604.5 Billion by 2027. Social commerce is not new, but was accelerated in 2020 due to the COVID-19 Pandemic and is still going strong as consumers try to find what their ‘new normal’ looks like.
While in-person anything shut down, many small businesses moved online to connect with their audiences virtually. In order to stay open, many businesses looked towards any platform that could help them sell their products. Social media platforms were some of the easiest to use and they were accessible due to the reach they garner.
How Social Platforms Evolved
With 60% of Gen Zers in the US using apps such as Instagram and Facebook to discover new brands and products and just under 50% of Americans between 18-34 having made at least one purchase through social media, the world’s largest social media platforms saw an opportunity in the social commerce space and grew accordingly:
- Facebook launched shops – an e-commerce feature allowing business to build online stores on both Facebook and Instagram
- Instagram Checkout became the new normal – this allowed users to make a purchase without having to leave the app
- Pinterest created a Shop Tab – a dedicated space for users to discover and shop in-stock product Pins
- TikTok Shopping – the popular app is about to enter the social commerce space with its latest Shopify partnership
As e-commerce shows no sign of slowing down any time soon, social commerce continues to be on the rise. It’s more personal for the consumer and more relational than the traditional e-commerce marketplace and why many are leaning towards it.