When Likes Lead to Purchases: The Emergence of Social Commerce

If there are two things that characterize modern Western culture, and American culture in particular, it’s technology and consumerism. There’s no doubt that Silicone Valley and the many inventions and innovations that have come from there have driven our society over the last few decades, but it’s also equally true that for an even longer period of time it’s also been a consumer-centric society. In recent years, these two trends have converged to create the new tech-consumer space known as “social commerce,” and brands that know the importance of this trend and what it means for their customers will be a step ahead of their competition in the 2020s.

Before we examine how social commerce is a trend that can benefit both brands and consumers, we need to define what it is. The term social commerce was first identified in a 2005 Yahoo! article to describe online collaborative shopping tools that allowed consumers to give feedback on products. Some of these early, simple tools included shared pick lists, consumer ratings, consumer generated content sharing of product information, and consumer message boards

Today, social commerce is viewed as a tool that helps brands engage with their customers, giving them a reason to return to a particular brand’s social media page or website. Social commerce is also instrumental in creating a community for consumers who are loyal to a particular brand, who then share information about particular products. The evolution of social commerce also coincided with the rise of social media, which gave online shoppers new networking and purchasing opportunities and brands the ability to collaborate with social media companies

Social commerce therefore represents the successful interaction between a brand and its consumers, and increasingly brands’ collaboration with social media. With that said, social commerce can take place directly “onsite” on a brand’s website or “offsite” on a social networking website, although most recent studies and reports on the trend have focused on social media. So let’s take a look at social commerce, how it started, where it is today, and what brands and consumers can expect from it in the future.

From Commerce to Consumerism

The concept of free enterprise has existed since the dawn of human civilization, and although consumers have always been an important part of that system, until recently their impact has been minimal. Consumers didn’t have many outlets from which they could voice their concerns, complaints, or praise for products and brands and there was never any sense of community surrounding brands. So in order for the idea of social commerce to become a reality, there needed to be a few prerequisites.

The first prerequisite that was needed was a true consumer culture. As capitalism became more complex, a consumer culture began forming in the late 1800s, primarily in the United Kingdom and the United States. In the 1890s, some existing stores became chains, mail-order shopping surged, and multi-level department stores were built in the largest urban centers. Retailers and brands became more interested in consumer tastes and along with the rise of the middle class after World War II, consumerism in its current form was born. But in order for consumerism to evolve into social commerce, it would need to be aided by new technologies.

The standard technologies that brands used to drive consumerism in the post-war years was primarily television, radio, and print, none of which were conducive to create a modern consumer community. This changed in the 1980s, with the increasing popularity of the home computer and the invention of the World Wide Web in 1989 and it being made publicly available in 1991. By the early 2000s, consumerism and social media had found each other and social commerce was born.

The Explosion of Social Commerce

Social commerce grew during the late 2000s and into the ‘10s as social media expanded and became more popular, but just like many other aspects of society, it all changed with the COVID-19 pandemic. The number of people who bought items through social commerce increased from over 60 million in 2019 to an estimated 97 million in 2022, leading some social media platforms to take advantage of the trend more than others. 

The social media platform that has had the most success so far has been Instagram, which grew its advertising during the pandemic by 7.1% compared to a growth of 2.2% for Facebook. The same study found that 70% of consumers use Instagram for product discovery and 90% follow at least one business. Instagram’s social commerce success may provide a model for other social media platforms, but what does it mean for the brands that sell their products on the platforms and the consumers who buy them?

Successful Brands and Satisfied Consumers

Because so many people are on at least one form of social media, the different platforms are great places for companies to market, brand, and sell, and brands that sell their products on social media are generally viewed in a positive light. According to data from Facebook, 74% of consumers view brands sold on Instagram as relevant, 76% see them as creative, and 78% thought they were popular. But Instagram isn’t the only social media platform actively engaged in social commerce and more and more brands are also starting to notice its possibilities. 

Some brands that have become proactive in their social commerce pursuits include Nordstrom, which offers a “popular on Pinterest” label on trending items. Clothing brand Lolly Wolly Doodle allows its customers to design their own clothes on its Facebook page, and Starbucks gives bonus points to its customers who unlock badges on Foursquare. Social commerce clearly benefits brands and companies that know how to combine consumerism and technology, but how does it benefit consumers?

Consumers report a number of social commerce benefits, many of which are related to an enhanced shopping/buying experience. Many consumers state that buying items through social media is more like real-life shopping than traditional ecommerce, as they can discover new products on social media with friends and family just as they would at a mall or brick-and-mortar store. Closely connected to this is the convenience of social commerce.

As with ecommerce in general, social commerce consumers find there are fewer barriers to purchase when they find a product on a social media platform and can also purchase it there without having to visit another website. After all, it is the social media platform that attracts consumers to social commerce and the platforms also provide a brand community, leading to a higher degree of trust. Reviews on trusted social media sites create consumer confidence and trusted social media content creators who promote certain brands on social media also help attract and retain consumers. All of those consumer benefits will shape the future of social commerce. 

The Future of Social Commerce

The future of social commerce looks strong, with sales expected to be $2.9 trillion by 2026. And as more brands realize the value of social commerce, they will increasingly mold the concept to the consumer experience with new ideas and technologies. 

One technology that is already in use by many brands on social media platforms, but is expected to increase in use, is in-app checkouts. This app simply keeps the consumer from being directed to another site when they choose a particular product. This makes the experience more convenient for the consumer and also helps brands retain more customers and make more money. 

Shoppable ads are another feature of social commerce that will likely drive the trend in the coming years. Shoppable ads are simply ads on social media platforms that have a built-in checkout function, which is another example of brands taking advantage of the consumer’s desire for convenience.

Another trend that may play a role in the future of social commerce is the influence of “micro” and nano-influencers.” Micro-influencers are defined as content creators with 10,000 to 100,000 followers, while nano-influencers are those with less than 10,000 followers. In terms of social commerce, nano and micro-influencers already outpace mega-influencers (those with more than 100,000 followers) in obtaining new and recurring customers to certain brands. Consumers trust these nano and micro-influencers and will look to them for brand recommendations on social media platforms, creating a stronger consumer community in the process. 
As social media continues to be an important part of life in the 21st century, expect the idea of social commerce to play an even bigger role in how consumers shop and purchase. Brands that realize how important this trend and some of the impacts it will have on the economy of the future will take advantage by looking for new ways to connect with their customers. After all, the future of commerce will be a consumer-centric, which will include a social media experience.

About the author:

An industry leader and influencer – Rudly Raphael specializes in all aspects of research logistical design involving quantitative methodology,  implementing internal system infrastructure to streamline business processes, channelling communication and developing innovative research solutions to ensure Eyes4Research remains a competitive force in the marketplace. An entrepreneur, inventor (patent holder), blogger and writer – his articles have been published in various magazines such as Medium, Ebony Magazine, Bussiness2Community and also cited in various journals and academic publications.