by Emma Sahota, UK Managing Director at Astound Commerce
Social commerce, or S-commerce, the meteoric meeting of ecommerce and social media, will continue to dominate in 2023, with an added boost as Web3 and the metaverse become ever more mainstream, presenting brands with opportunities to engage and personalise in ways that have never before been possible.
Social media has made the jump from its original purpose of providing a shared space for entertaining and informing to becoming a full ecommerce channel. Brands can manage the entire customer journey through a single channel, including inspiration and discovery, all the way to buying. And consumers, particularly Millennials and Gen Z get exactly what they have demanded for so long — a fast, convenient, immersive and fun journey.
Social media has advantages over more traditional channels; it offers an ideal space to create excitement and intrigue around products and services. As buyers share, repost and tag products, audience and engagement levels grow. It’s a different way of selling, and brands that understand it, will be best placed to take full advantage of it.
Additionally, social selling removes friction within the consumer journey, making it simple to follow through from product discovery to purchase — significantly reducing the potential for uncertainty and abandonment. With over 4.59 billion people using social media worldwide, with an average of 144 minutes spent per day on these platforms, bringing products to busy social spaces where customers already are increases chances of conversion.
The stats on social commerce’s growth are solid proof that brands need to prioritise their engagement with these key channels as they look ahead to 2023. Consumers who have made a social commerce purchase are twice as likely to buy from a brand they have not heard of before. In fact, 11% of social media users immediately make an online purchase after discovering a product.
This conversion rate combined with its popularity there has seen social media in China emerge as the main channel for live streaming commerce. Companies that have adopted live social selling have reported conversion rates of around 30%, almost 10 times higher than standard ecommerce conversion rates. These are clearly brands that understand that 92% of consumers trust organic, user-generated content on social media more than they trust traditional brand-led advertising.
Moreover, 82% of customers like the convenience of social shopping and are more likely to convert compared to those who have exited to a retail site.
Social media as a commercial channel will have even more to offer in the coming years, given how it is tailor-made for rich media and immersive experiences that stimulate as many of a consumer’s senses as possible rather than just being built around a traditional commercial transaction.
One technology central to these heightened experiences is virtual reality (VR) which has found new relevance this year following the various announcements by Facebook/Meta about the metaverse. Facebook’s latest iteration of the metaverse is a fully functioning virtual reality ecosystem. Brands will be able to improve their social media using existing augmented reality (AR) / VR functionality as well as experiment with near-metaverse content and capability for when the platform is fully live.
The metaverse is an opportunity for retailers to reach a limitless number of consumers and provide a new level of socialisation and immersive experiences previously lacking online. According to Gartner, by 2026, 25% of the world’s population will spend an average of one hour in the metaverse every day, from attending virtual meetings to ecommerce shopping, social media and entertainment.
Creative brands must lead the way in using metaverse functionality, including VR and AR, to build brand awareness and identity with digital-first, hyper-connected younger generations — rather than being limited to scrolling or viewing on a flat screen.The metaverse has great potential to complement brands’ current investment in trying to personalise the digital experience. However, this opportunity is time limited judging by recent research that shows that differing consumer attitudes to the metaverse in Western and Eastern
nations mean early adopters such as China and the United Arab Emirates are already getting a return
on their investment.
The research, by Gowling WLG, shows 83% of Chinese consumers would consider taking part in metaverse experiences, more than twice as many as in the UK (37%). Consumers in the United Arab Emirates were more than five times (43%) as likely to feel excited about the prospect of spending time in the metaverse in comparison to consumers in the UK (8%).
While 2023 will continue to be a year of further experimentation on social platforms and the nascent metaverse, we will start to see, from some brands, greater consistency in the way they engage with their customers across channels. This demonstrates a maturing in the understanding of how consumers shop; the metaverse is not the ultimate destination on a journey away from other channels but part of an expansion of choice for consumers to skip from channel to channel at will, depending on where they are in the cycle of search, play, engage, buy, pay, return.