Sales through social media channels around the world are expected to almost triple by 2025. As a result, almost half of brands plan to increase their investment in social commerce in 2022 (1).
If you’re one of them, this is the guide for you. This article explores where we are and where we’re heading, by taking a detailed look at the statistics, trends, and strategies shaping social commerce in 2021, as well as what you should prepare for in 2022.
Table of Contents:
- What is social commerce?
- The different social commerce channels
- Why is social commerce worth the investment?
- Social commerce trends and stats
- Social commerce best practices
- 3 social commerce examples
What is social commerce?
Social commerce is the process of selling and promoting products through social media platforms such as Facebook, Instagram, and TikTok. The top social media apps have ecommerce features for their users to rely on when in shopping mode.
It’s different from a traditional social media marketing strategy, where users view a brand’s content and visit their website to start shopping. With social commerce, potential customers can research brands, discover items, and purchase products—all without exiting the app.
Companies and apps alike are eliminating the middleman and instead focusing on direct consumer purchases within social media apps themselves. Whether it is Facebook or Instagram Shop, social media sites are taking advantage of FOMO and directing followers directly to checkout pages.”
—Jonathan Zacharias, Founder of GR0
The different social commerce channels
Let’s take a look at the most popular social commerce channels and how merchants can use them to drive revenue.
Facebook and Instagram Shops
Facebook and Instagram, both owned by Meta, are the two biggest social networks. Combined, they have almost three hundred million users. No wonder ecommerce brands say they sell the most products through these social commerce channels.
Each platform has a native Shops feature. Ecommerce brands upload their product catalog to a virtual storefront connected with their account. Visitors to a brand’s profile see available products—including sizes, color variations, and specifications—without leaving the app.
Knix, for example, tags items from its Instagram Shop in shoppable posts. It exposes new products to its followers, giving them the ability to visit a product page directly from the post itself. (Instagram doesn’t make this easy; brands are only allowed one external link from their main profile.)
This social commerce channel is big business for online brands. More than a third of Facebook users will purchase an item through the social media platform in 2022. That equates to 59.4 million buyers—many of whom you can reach by opening a Facebook Shop.
TikTok is the new kid on the block, but its rapid growth could fool anyone into thinking it’s been a social commerce platform for longer than it has. The video-sharing platform is predicted to hit 48.8 million US users by 2025, beating Instagram’s 48.2 million, despite its six year lead.
But TikTok users aren’t just scrolling through the app to be entertained. According to TikTok, 39% of users have discovered a product or brand on TikTok they didn’t know about before. Almost half have purchased something they saw on the app.
TikTok’s official foray into social commerce happened when it partnered with Shopify to launch in-app shopping earlier this year. Merchants with a TikTok For Business account can add shopping tabs to their brand’s profile, showcasing a virtual storefront for users to browse without the friction of exiting the app.
Pinterest is a search-engine-cross-social-media platform for images. Users create mood boards, pin places to travel, and, more importantly, discover new products.
More than 400 million people use the platform every month to find ideas and research products. The best part? The vast majority (97%) of Pinterest searches are unbranded. When merchants upload product listings from their online store to Pinterest, they have the ability to reach potential customers who aren’t aware of its products just yet.
Allbirds, for example, uses Shoppable Pins to reach customers through Pinterest. These listings are optimized both for the brand name and the product type, giving Allbirds the best shot at reaching people using Pinterest’s Shop tab to discover new products.
Why is social commerce worth the investment?
Ecommerce purchases live and die by the experience a shopper has with the brand. Merchants who own that experience have greater control over it.
“It’s key for brands to develop their own DTC strategy and model to be able to build a strong, independent brand,” says Étienne Mérineau, Senior Director of Marketing at Heyday by Hootsuite.
“Social commerce is definitely an opportunity for brands to reclaim their destiny by owning the customer experience and the relationship with customers, versus selling on Amazon, where price is king and your brand is an afterthought.”
The same concept applies to advertising. Legacy direct-to-consumer (DTC) brands once ploughed millions into online advertising to drive new revenue. But the playbook they set caused a wave of newer brands to oversaturate already-limited advertising slots, competing against each other and driving higher costs. Global ad spend on social media in the third quarter of 2021 was 26% more than the same period in 2020.
If your brand views social media as just another channel to advertise through, you’ll hit the same problem as marketplace merchants: zero audience trust and an unsustainable reliance on paid advertising.
The acronym ‘DTC’ also includes sales through stores that you own. What few consider is that customer acquisition costs are typically lower in owned, physical footprints. But for it to work, the brand must be strong. And no Facebook ad can buy a strong brand.” —
Web Smith, founder of 2PM
Social commerce trends and stats
Social commerce is booming because social media usage is. Research shows the typical social media user now spends about 15% of their waking life using social platforms, with 10% of US adults having an addiction to at least one app.
Despite these worrying statistics, social commerce in the US isn’t as big as it is in other countries. Some 30% of internet users in the United States already make purchases directly within social platforms, but China is the clear global leader.
China's borders house the most digital buyers in the world, and those shoppers’ purchases make up over 50% of all retail sales. Plus, according to eMarketer, almost half of internet users in the country shop on social networks. Those consumers generate more than 10 times the sales of the United States.
Global brands are learning from the social commerce strategies used by Chinese merchants. So, what can we expect to see over the coming year? Here are four trends to keep in mind if “master social commerce” is on your agenda.
Video takes priority
Take a look at the laundry list of new features released by social media giants over the past few years and you’ll notice one thing they all have in common: a love for video.
TikTok’s video-only platform dominated the social media landscape in record-breaking time. Instagram launched Reels, a TikTok rival, to keep up.
Let’s be honest: there’s some really serious competition right now. TikTok is huge, YouTube is even bigger, and there’s lots of other upstarts as well. People are looking to Instagram to be entertained, there’s stiff competition, and there’s more to do.”
—Adam Mosseri, Head of Instagram
Off the back of these changes, consumers are becoming increasingly reliant on video throughout the shopping journey. Half of consumers want to see product videos before they buy (3).
Brands new to the video space can test the waters by incorporating product videos into their social commerce strategy.
Record a short clip showing one to two products in action. Film with interactivity in mind, providing clickable calls to action throughout video that direct followers toward your social storefront. This Instagram Reel by Kylie Cosmetics, for example, tags products from its Instagram Shop:
Regardless of the video format and channel you use, remember that shoppable videos are still new to some viewers, especially those outside of Southeast Asia. Make it obvious that viewers can shop products directly through the post with captions and frequent reminders.
Chinese brands are crushing social commerce because of customers’ pre-existing fusion between shopping and entertainment. One type of video lends itself to this combination: livestream.
Live commerce uses social media platforms to blend livestreaming and commerce. Viewers tune into a Facebook Live (or equivalent) video, have real-time communication with a brand, and purchase items off the back of its answers.
Internal Shopify data found that between January 1, 2021, and September 30, 2021, the number of app installs for livestream selling grew by 61% globally, compared to the same time period in 2020.
Some US companies have partnered with mainstream social media platforms to piggyback onto the trend, like Sephora’s Facebook collaboration. Others have created their own channels outside the well-established platforms. Nordstrom, for example, launched its own live shopping channel.
The power of liveshopping has not been nearly tapped yet, and we’re on the precipice. We’re just starting on that, and we are really pushing into it. We already have a Head of Live Shopping.”
—Ann McFerran, Founder and CEO, Glamnetic
Even more impressive: some live commerce brands are already seeing conversion rates of up to 30% through livestream selling, along with lower product return rates—the biggest thorn in ecommerce merchants’ sides.
Our Future of Commerce report found 60% of shoppers think an excellent past customer service experience is a driving factor in influencing their purchase decision. Another 58% say the ability to easily reach customer service in the channel of their choice is important to them (4).
However you interpret that data, one thing’s clear: shoppers are demanding easy access to the brands they’re thinking about purchasing from. Social media—a place where real-time conversations with others are actively encouraged—is the perfect facilitator.
“More and more shoppers are going online to connect and interact authentically with the brands they like,” says Jared Pobre, co-founder of Caldera + Lab. “And creating that genuine engagement will require more than liking, commenting on, and sharing your followers’ posts.
“Brands will also need to implement one-on-one social media experiences with prospects through conversations in private messages. These messages can range from offering discounts on new products or promotions to post-purchase customer support.
“A more personalized engagement experience will make prospective buyers and new customers feel valued and assure them that your business is there when they need you.”.
If you’re not already offering live chat to social commerce customers, now’s the time. Some 42% of consumers surveyed for this report say they’re likely to use live chat in the next year. Miss out on those chances to connect with your customers and risk losing revenue (2).
In 2022, I’m expecting to see more experiments with chatbots and chat commerce. Consumers spend more when their shopping experience is personalized. AI powers chatbots on several websites that sell products or services to consumers. This technology is on an upward trajectory.”
—Jay Levitt, Founder and CEO of Lofta
Everyone becomes a social influencer
Half of merchants plan to work with influencers to develop co-branded products next year (5). But the type of social media user who fits a brand’s “ideal influencer” criteria is changing.
“2021 became the era of relatability,” says Chris Vaccarino, CEO and founder of Fanjoy. “The perfect Instagram photos dissolved and Gen Z came out swinging, pushing for real people to be stars. Overly edited photos, picture-perfect lifestyles, and celebrity status took a back seat to incoming TikTok stars who are your classmates, co-workers, and family members.”
Chris expects this trend to continue in 2022: “We’ll continue to see TikTok dominate with normal and regular people finally breaking out of the mold and becoming people with real influence. Co-workers will quit jobs and pursue content creating full time and build real careers doing what they love.”
“Bigger brands will emerge from those creators with specific niche categories and those who have the business acumen will build actual companies from doing what they love,” Chris adds.
“Sustainability, although a big movement, will continue to push forward and Gen Z will be super conscious about the products they’re consuming, where and how they’re made, and be more mission focused than ever before.”
Combine influencer marketing with livestreaming and you’ve got a social commerce storm on your hands. Seven in 10 US internet users frequently watch livestreams from influencers. Some 29% of them are likely to buy recommended products off the back of one.
Social commerce best practices
Ready to take advantage of these social shopping trends? Here are five best practices to start your social commerce strategy off on the right foot.
Choose the right platform
There’s a good chance that you’ll find your target customers active across several different platforms. However, one trap ecommerce brands fall into is trying to be everywhere at once, spreading limited marketing resources too thin.
Dive into the data you already have from existing customers—the types of people already proven to have an interest in your products. Which sales channel drives the most revenue for your business? Which has the higher conversion rate? Prioritize channels that come up top. (More on this later.)
Survey your current customers to find out which social channels they prefer, as well as which sites and what type of content they like best. By determining where your customers hang out online, you can narrow your marketing efforts to the right channel that will help you reach your target customers without blowing your budget.”
—Jason Sherman, founder of TapRm
Expand your research outside of your existing customers with audience intelligence tools like SparkToro. Enter the main interest your target audience has, such as “beauty,” and find the social media platforms they’re most active on and the influencers they follow. Again, prioritize any platforms that come as most popular.
Finally, to take advantage of the social commerce trends we’ve shared, choose a platform that lets customers check out without leaving the channel they’re already on. Fewer clicks means less friction and a greater likelihood to convert.
Find the right format
Once you’ve chosen the social commerce channels your target customers use, discover which formats work best to reach and convert them. This can be done through surveying customers or by A/B testing different options.
Say your target customers are makeup shoppers. In that case, livestream your product launches (e.g., QVC-style product demonstrations) on Instagram Live. Invite beauty influencers to join—either as the model or the person applying the product. Tag products from your Instagram Shop in the livestream to actively encourage customers to purchase those being applied.
Similarly, go behind the scenes with your consumers, giving them a peek into how you make your products, how they’re sourced, or other aspects of your business. All three ideas could be modified to produce different video formats for each channel in your social commerce strategy, such as:
- Instagram Reels
- TikTok videos
- Facebook video ads
Whatever the format, consider time of day, how long you’ll be live for, and which channel will best reach your audience. You don’t want to take up too much of your audience’s time, nor go live when they’re offline.
And remember: the back-and-forth conversation viewers have throughout livestreaming is a huge contributor to the sales they drive. Ensure there are team members on hand to answer questions, moderate the discussion, and guide the conversation.
More than two million Snapchat videos, 240,000 Facebook photos, and 575,000 tweets appear every minute. Your branded content needs a reason to stand out. The visual appearance of your social media content plays a role in whether people will engage with it.
But it’s not just pretty photos and videos that matter. If you’re creating an online shopping experience, dress your social shop with as much care as you would your website storefront.
Consider using visual prompts and animation, like NYX Cosmetics’ virtual store. The retailer launched its new product line with the hashtag #NYXCosmetics21Drop. Snapchat and Triller audiences can use augmented reality to view concert livestreams, try on cosmetics, and purchase products.
Visually appealing doesn’t always mean polished. Selectively broadcasting less-refined live streams—like SKIMS’ perfectly laid out socks in a recent shoppable Instagram Reel—can still make your current customers feel connected with your brand.
Match inventory with demand
Mastering social commerce, particularly livestreams, will lead to high short-term demand for your products.
Out-of-stocks cost retailers $1 trillion every year. The last thing you want is for viewers to exit the livestream because they’re frustrated that they can’t buy the products on demonstration.
Prepare for demand surges in advance by coordinating livestreaming dates with your ecommerce teams. Be aware of supply chain delays; only commit to a time and date with your users once you’ve confidently got enough stock in your warehouses to serve everyone tuning in.
Finally, sync the product catalog across your social media storefronts with your ecommerce website. That way, inventory levels are managed across various sales channels. Social media users can make purchases directly inside the app without the dreaded “Sorry, this product is out of stock” notification.
Develop a shoppable attribution model
Sales attribution is a struggle as old as time. Why? Because both first-, last-, and multi-touch attribution models are only an approximate picture of how each touchpoint affects a customer’s path to conversion.
Assess whether your social shopping strategy is working using a combination of data sources that uncover your top performing channels and activities, such as:
- Google Analytics. Study your users’ behavior flow by defining UTM parameters for the social commerce channels you use.
- Social analytics. Shoppable video ads on Instagram and Facebook give a clear view of conversion data including click-to-view, click-to-buy, and click-to-share interactions. Combine this with any advertising data you have for the formats and channels involved in your strategy.
- Customer surveys. Use apps like Enquire Post Purchase Survey to ask one simple question to all customers: How did you find us? Tally up how many respondents replied with the social commerce channel you use.
Shopify merchants can create, run, and optimize social campaigns across TikTok, Instagram and Facebook–right from the Shopify dashboard.
You’ll get insight into which products, images, and messaging resonate most with your audience with social data across channels and regions. Turn those insights into action items for targeted marketing and cross-selling across your customer segments.
Social commerce examples to learn from
A social commerce strategy has many moving pieces. That doesn’t mean it’s a future headache worth postponing. Here are three brands who’ve taken social commerce in their stride—and have the results to support their investment.
Glamnetic is a beauty retailer that sells its cosmetics through a DTC website and retail stores like Sephora and Ulta.
Part of its success lies in the “Glam Fam”—the Facebook and Instagram audience Glamentic’s founder and CEO Ann McFerran built off the back of product demonstrations.
Glamnetic’s approach to social commerce lies heavily on live shopping. In its case, Facebook Live videos give the expert advice in-store shoppers would get when visiting its beauty counter. A discount code for products on display incentivizes live stream viewers to purchase.
“The videos blew up and became really popular on social media,” Ann says. “Just three years later, “I would say we’ve hit a lot of female US audiences at this point, but I wouldn't say we’ve reached even close to 10% of the rest of the world. So we’re setting our sights on that right now and seeing how we can expand our markets, because I think there’s a lot of low-hanging fruit there.”
Ann says the brand is behind China in terms of catching up with live commerce—even appointing a Head of Live Shopping to support: “She's setting up multiple Facebook Lives on a daily basis.
“I think we’re on the precipice, and so we're just strategizing: How can we continue to improve and get even more revenues through that platform?,” Ann says. “For us, it’s about building the infrastructure and laying the foundation now of live shopping, and hopefully in a year from now, when we feel like it’s going to really pop, we’re way ahead of other brands in the space.”
2. Manly Bands
Manly Brands is a DTC retailer that sells men’s wedding rings. Its TikTok page is a key part of its social commerce strategy, with regular meme-style videos that tag products from its TikTok storefront.
Despite having fewer than 2,000 TikTok followers, Manly Bands found that CPMs for advertising on TikTok are half the cost of those from Facebook. “What that tells us is that we can get cheap traffic—[it’s] a lot less expensive on TikTok right now,” Chief Marketing Officer Stephanie Bregman said.
We want to remove any kind of friction points that we can through the buying process. By allowing our customers to see what we’re featuring, it makes it much easier for them to find what they’re looking for.”
—Stephanie Bregman, Chief Marketing Officer at Manly Bands
Using Gorgias’ customer service platform and ConferWith’s video shopping tools, Snug curates live online shopping experiences on social media, including Instagram videos that show styling options for its sofa beds. The result? After migrating, Snug saw a 25% increase in average order value.
Snug’s Instagram guide to Christmas styling is another string to its social commerce bow. It compiles unbiased user-generated content (UGC) with its followers. The final image in the collection is a shoppable post. People who click the photo can purchase the sofa directly through the Instagram Shop listing.
Shopify Plus enabled us to migrate to a more sophisticated and stable tech stack with apps that enable our virtual showrooms. Migrating has freed up time to focus on new channels like social commerce and live selling so that we can pioneer in the furniture space as well as in the emerging marketing and technology space for retailers.”
—Rob Bridgman, Founder and CEO of Snug
Social commerce is an investment worth making
The trends compiled in the Future of Commerce report tell us that social commerce isn’t disappearing anytime soon. In fact, with the number of social media users constantly on the rise, platforms are evolving to capture a slice of consumer spending happening within them.
Use these trends and best practices to start driving sales from social commerce. Find the channels your target audience uses, then craft livestreams to meet them there.
(1)(2)(3)(4)(5) Shopify eCommerce Market Credibility Study: Data Review, a commissioned study conducted by Forrester Consulting on behalf of Shopify, September 27, 2021