They are the most popular mobile apps in the world. The odds are that you have several of them on your phone that you most likely check on multiple occasions throughout the day. Social media apps are undoubtedly the most ubiquitous apps in smartphone history. Recent statistics show they are the most used and installed apps in the world. Facebook has a colossal 2.9 billion monthly average users. For Instagram, that figure is 2 billion, and TikTok — the fastest-growing social media platform — has no fewer than a billion MAUs. Even more impressive than the global number of people regularly using these platforms is how long each person spends on them. On average, internet users spend just shy of two and a half hours every day on social media, amounting to around 75 hours a month. With these figures in mind, it was perhaps inevitable that e-commerce would be incorporated into these platforms. After all, why limit users by only allowing them to upload a video or picture when they could be doing more? Such as buying a new outfit, for example.
Social shopping is on the rise. Defined as transactions that take place entirely within the social media platform, the social commerce market is set to value at $1.2 trillion by 2025 – growth that will be driven predominantly by Millennial and Gen Z consumers, who will account for 62% of all spending. Indeed, the impact of social shopping is predicted to be so profound that it will grow at least three times faster than sales via traditional mediums.
Facebook transformed the e-commerce market in May 2020 when CEO Mark Zuckerberg announced the launch of Facebook Shops. Introduced at the height of the first COVID-19 pandemic lockdowns, the free commerce platform allowed businesses to list products on their Facebook page, Instagram profile, and stories, as well as sell products via the chat features of WhatsApp and Messenger. Even more dynamically, Facebook installed a Livestream instant purchase feature, so customers could click on tags during Facebook and Instagram live feeds and be instantly transported to the order page for the product. According to Statista, social commerce in the United States was estimated to be worth more than $35 billion in 2021, which marked an extraordinary rise of 35% from the previous year. There is a wealth of evidence that younger consumers who increasingly represent the greatest spending power desire mobile-first shopping that mirrors the experience of a physical shop. This explains the success of Facebook Shops – it facilitates immersive purchasing with fullscreen “storefronts” that allow merchants to successfully create a brand experience. As Ali Hersh Pace, Facebook’s director of North America Luxury & Retail, explained: “Social is now becoming the new flagship store, serving as the main source for product and brand discovery. This embrace of digital and omnichannel shopping has fundamentally changed retail: People have come to expect those same moments of connection and excitement online that they previously could only experience by walking through the doors of a brick-and-mortar store.”
Yet, Facebook is still playing catch-up with the Asian market where social commerce has been a staple for consumers for longer. Indeed, China’s social shopping sales totaled approximately $186.04 billion in 2019 –– nearly ten times the value of sales in the United States. Tech giants such as WeChat, Alibaba, and Pinduoduo currently dominate this thriving market and they are forecast to continue growing. TikTok in particular will most likely see its subscribership soar. Building on its already strong position driving sales — specifically its countless influencers talking about their favorite brands and products — TikTok launched a social commerce offering last year. TikTok’s livestream shopping is now a mainstay feature. It works by allowing brands and influencers to promote products, which views can click on, add to a cart and then purchase within the app.
Looking ahead, all signs indicate social shopping will be the dominant force in all types of commerce. The fact is, Generation Alpha, the children approaching their teenage years now, will practically grow up inside the metaverse. Already, this demographic is hanging with their friends in virtual playgrounds in the form of Roblox and Minecraft. They are expressing themselves with online avatars that can be customized with digital wardrobes that are purchased using online currencies. In short, they are totally at home in the virtual world. Maarten Leyte, CEO of Trendwolves, pointed out that alpha will account for nearly a quarter of the world’s inhabitants in 2030 and will disrupt traditional retail models. More importantly, this generation’s coming-of-age coincides with the mass rollout of new technologies that will enhance the social shopping experience, such as 5G. For brands, this headlong rush toward a future of retail that is commanded by social commerce marks a turning point. It is critical that brands stay ahead of the curve. For this new generation of buyers, what they see on social media will have the greatest impact on their purchasing decisions. For example, more than half of kids in this age group report wanting to buy a product if they see their favorite YouTube or Instagram influencer using it.
The time is now for brands to draw their attention from traditional retail marketing and totally immerse themselves in social shopping. This, or risk missing out on the newest and most powerful generation of consumers.