The term “social commerce” describes the practice of allowing users the option to purchase goods and services directly from their social media platform rather than diverting them to an online store. Additionally, the latest iteration of “social commerce trends,” which are being led by the walled gardens of the world, is concentrated on establishing a buying experience on social media platforms.

Additionally, TikTok and Instagram have launched their ‘Shopping’ feature in a few areas, enabling users of their respective apps to shop livestream.

Social media websites are used for the sale and purchase of goods and services through social commerce. Social commerce is the practice of using social media platforms like Facebook, Instagram, and Twitter to market and sell products and services. The owner does not need to have his own website in order to sell the products or services; instead, the transaction happens on the social media platform.

Limitation of Social Commerce

Expected market growth, global reach, the interaction between sellers and buyers, trustworthy reviews, more mobile shoppers – it seems pretty hard to find any disadvantage. But it does have some – for the sellers.

• Social Commerce is made for shoppers, not sellers!

The main disadvantage is that this method was created for shoppers, not businesses. Since the entire process is focused on a certain Social Media platform, and it’s possible to check out within the platform, the sellers lose the web traffic, including CTR. 

• Time-consuming

The effort of the company to engage consumers is time-consuming. The company must keep up with the content and interactions with its audience. Creating a shop on Social Media is simply not enough. Moreover, it is wanted by a business to build a brand there, since the web traffic decreases.

• Low organic reach

Getting sales highly depends on advertising. The organic reach is slowly dying and ads dominate. It may differ between platforms, but the fact is, that ads are the main selling tool.

• Negative feedback

Negative feedback stains the brand and it is hard to remedy the reputation.

• Reach in Social Media platforms only

As we explained what Social Commerce is, you can probably guess what the fifth disadvantage is. It is limited to Social Media platforms. I know, socials have a huge reach, but it also has its borders. That is why you should still have a regular e-shop.

Below are other limitations:

• Low Buying intent: social media is usually used to connect with friends, family or social issues. People have low buying intent in social media. They do not want to buy anything when they are spending time with family or friends.
• Few Product Categories: social commerce is still in the developing stage. So it has a few product categories only. So, it is one of the reasons people do not prefer to buy at social commerce.
• Less Authenticity: As we said social commerce is in still the developing stage. The seller is not required to do any paperwork. Sometimes spammers take advantage of it and make a fool of the people.
• Lack of Privacy; buyers need to provide their personal details, such as address, telephone number, and so on to the seller. This is one of the reasons people don’t go with social commerce.

What are the Social Commerce Challenges?

Even though short films on social media increase brand engagement, few of them actually result in purchases. Additionally, as evidenced by the quick rise of TikTok and Instagram Reels, Gen Z and Millennial consumers can’t get enough of short-form videos.

This group is very important in determining trends in the current digital product environment. Undoubtedly, there are difficulties, some of which we have covered below:

1. Lack of Core Objective

Social media’s core purpose is to enable community-driven interactions for entertainment and connectivity.

As a result, most live streams on walled gardens such as IG, TikTok, and Amazon Live result in <1000 viewers and even smaller conversions. The introduction of a shopping element is a jarring break from its core identity, seemingly coming across as a forced platform addition.

2. The Distraction is Immense

Social media platforms present an incredibly dense world of UGC (user-generated content) that introduces a high degree of distractions, a strict no-no for a new shopping format that requires a focused experience. Consumers know that entertainment is just a swipe away, posing a dropout risk.

3. Lacks of High Influence

Even today, social media only influences about 3% of eCommerce sales, with the rest of the conversions happening on websites. Most consumers don’t consider a social media platform their next significant shopping experience.

4. First-party Customer Data

Brands get second-party data that is often hashed and inaccurate. Comparatively, first-party data becomes crucial for creating a personalized, targeted customer experience in the cookieless future.

5. Poor Customer Experience Quality

There is minimal customization on offer for brands, and they have to purport to create a live streaming eCommerce experience driven by social media guidelines that may or may not result in a great customer experience.

6. Irrelevant traffic on Social Media

The overall conversions of the social commerce market remain low because the social media traffic isn’t actively looking to shop and is generally lured in by promotions that rarely convert into a sale.

7. Platform-Specific Content Sharing

The content created and posted on social media platforms is restricted to the walled gardens and can’t be shared on other websites (including brand properties).

What Are the Benefits of Social Commerce?

Social media makes it simple for people to share and suggest your brand when they are happy with it. Social media is a place where material goes viral because of its very nature. As a result, these platforms are crucial to your word-of-mouth advertising.

Read Also: How to Set up Your Instagram Shop

The Facebook business retail store pages, where customers can browse and make purchases without leaving the platform, as well as the buy buttons on Twitter and Pinterest are examples of social commerce platforms and websites.

Many people ponder whether social e-commerce will be successful for their company. In actuality, it provides a wide range of commercial advantages for your brand. From driving traffic to boosting customer interaction and website traffic to boosting sales.

Here are five business benefits of social commerce:

‍1. Consistent Audience Growth

‍Every day, thousands of new users join social media sites around the world. Millions are already active on it. According to Statista, Facebook has over a billion active users each month and many new users join every hour. One of the most important considerations for any business is how to reach and sell to its target customer audience. For companies that use social commerce, their followings are continuously growing and accessible.

‍2. Higher Search Engine Ranking

‍Engagement on social media can lead to more than just direct transactions. It has been proven that social media commerce actually increases traffic to your website which will eventually influence your ranking on search engine results (though nobody can agree on the exact weight of this search engine ranking factor.) Sharing links to content on your website through social media is an excellent way to drive traffic from social media users. It also allows your audience to engage with a comment, like, or share to reach an even larger audience.

‍3. More Authentic Engagement and Traffic

‍As already stated, actively working to grow your social media audience is a great first step in eventually making conversions. One of the most significant benefits of social commerce is the engagement and reach that businesses can get whenever they share content. By showing up in a follower’s updates feed on a regular basis, you’re participating in a powerful branding opportunity. People who have regular contact with a company are more likely to recommend that company.

Social commerce encourages people to connect with a business through two-way communication. This allows customers to not only engage with your business, but it also gives them the opportunity to use social media as an efficient customer service channel where it’s possible to solve problems. Social media word-of-mouth (sharing/reposting) helps with audience building, as well as increased engagement and website traffic.

4. Customer Loyalty and Retention

‍In using social commerce for your business, you are aiming to sell and promote your products/services, but you are also aiming to build good relationships with people. By using this opportunity to engage with prospects, a company can build and maintain relationships that deepen trust and loyalty. This in turn creates customers who are happy/satisfied with your service, who will likely remain clients who make repeat purchases. Make sure to treat first-time buyers just as well as you’d treat repeat purchasers – they’re both incredibly important!

‍5. Business Metrics from Social

‍With any part of your business marketing, you should be able to analyze your efforts and see if the results provided a positive ROI. Starting a campaign that you cannot measure or evaluate is a waste of any tangible effort. The objective you decide upon should be kept in line with company key performance indicators (KPIs).

Social media commerce makes it easy to measure and evaluate performances. Facebook pages, Instagram business accounts, and tweets on Twitter have built-in metrics for impressions, engagements, and reach. In addition, most social media posts allow for the measurement of traffic to your website through website click counts. Other basic measurements to determine a positive ROI might include your total number of fans/followers, likes, and the overall sentiment of interactions.

Social media commerce will only be beneficial for your business if it’s done right. Formulate a solid plan and don’t be afraid to take the risk and invest a reasonable amount of time, effort, and money – social commerce companies agree that it’s more than worth it!

What Are the Types of Social Commerce?

The use of social commerce to connect with customers where they are and boost sales is an approach that is similar to those that have been used successfully in social marketing in the past. Brands may strengthen their connections with their target audience by utilizing the power of social networks with social commerce tools that are natively integrated.

• Influencer marketing. Social media influencers promote products or services through their channels, typically earning a commission on each sale made. The influencer following and stamp of approval act as a positive product recommendation and usually yield positive results.
• Social media advertising. Ads on platforms such as Facebook, Twitter and Instagram can be targeted to specific potential customers and can feature a buy-now offer and personalized user experience.
• Content marketing. Creating content such as blogs, articles, videos and other forms of multimedia can help build relationships with new prospects and establish a brand as a thought leader in its respective industry. The content can be integrated to social channels and act as a gateway for social selling.
• User generated content. Encouraging customers to share their experiences using a business’s product or service on social media to increase trust among current and prospective buyers alike is a modern twist on an evergreen idea. With these testimonials, brands can overlay social commerce features and get a conversion from this micro-moment.
• Live streaming events. Hosting live events on platforms such as YouTube or Twitch that let viewers engage directly with the company by asking questions and providing feedback during the broadcast itself can lead to higher sales if a purchase opportunity is part of these livestreams.
• Shopping cart integration and native shopping features. Shopping cart functionality can be integrated into existing social networks such as Facebook so users can purchase items without ever leaving the platform. Some of these platforms offer native social commerce tools to drive conversions. These extend beyond the shopping cart and let customers create their own in-app shopping cart experience.

Here are a few case studies of real companies that grew their business with social commerce:

Jordan shoes

A few years ago, the iconic Jordan brand of shoes partnered with Snapchat to promote a new product in alignment with that year’s NBA All-Star game. They used Snapchat to provide exclusive offers within the app, making direct purchases easy while bringing together the community around the specific event.

Dollar Shave Club

The Dollar Shave Club brand is at the forefront of digital advertising and using social proof to generate interest in its products. The approach proved successful when it created a Pinterest board filled with powerful customer testimonials. Within the testimonials, Dollar Shave Club offered the ability to purchase from UGC within the app.

Petco

Through live streaming, influencer marketing and social shops, Petco is providing innovative experiences for customers looking to purchase their products from the larger pet supply retailer. Petco hosted a live stream event with social influencers to bring in an audience and validate the products. It also tied in a charitable component while enabling purchases. This success led to more social shops from Petco popping up on Facebook and Instagram using the same model of social influencers and UGC.