By Nina Müller, Director of The Ethical Commerce Alliance
TikTok’s live-stream shopping and Instagram’s Instacar showed us just how integrated commerce can become on social media platforms. With ecommerce businesses generating over £500bn worth of sales worldwide through social commerce this year, there’s a clear opportunity for retailers to expand into a new channel of commerce, but what’s the catch?
Digital trust is on the minds of many social media users, with the majority of Brits saying social media is where they felt their data was most at risk. This comes as a result of tech apps like Meta, Apple and Google all being sued by regulatory bodies, for illegally violating users’ privacy. From the collection of biometric data to the unconsented tracking of users’ locations, the ethical validity around social media can have a detrimental impact on retailers’ brands.
Social platforms have been built on implicit trust from consumers and now that scrutiny circles these Big Tech companies, retailers will have to navigate many challenges to operate effectively and ethically in this space.
How ethical is social media?
Outside of significant data privacy scandals, social media platforms have also spurred the rise of misinformation, harmful content and ‘cancel culture’. Protective measures such as content moderation now exist to limit this but it doesn’t address the problematic dynamics of social media such as addiction, manipulation and impacted mental health.
When nearly half of children and teenagers aged between 8-17 use TikTok and Instagram, the ethical implications of social media platforms’ lax ethical behaviour is dangerous. This becomes even more problematic with the current shift away from ‘friends and family’ content to unconnected algorithm-driven material, that platforms like TikTok use.
From a bird’s eye view, it’s clear this business model doesn’t advocate responsibility, transparency or respect – the exact building blocks needed for ethical commerce.
Retailers’ potential pitfalls over social media reliance
Approaching social commerce without consideration of the impact on consumer trust can make selling on these platforms a slippery slope. The opaque privacy policies, ambiguous data practices and unethical brand behaviour of Big Tech means new channels such as TikTok Shop are nothing short of a black box.
The crux of the issue is control. Retailers operating on social platforms to engage with Gen Z consumers, need to consider that TikTok and Instagram are expanding beyond commerce services and are becoming the digital infrastructure of engagement. What is then lost are important touch points that many retailers rely on.
By engaging with TikTok Shop or Instacart, retailers can actually increase the distance between users and the business. Whilst product discovery becomes more authentic and selling becomes frictionless, the more narrow parts of the funnel are streamlined, creating the potential for an experience which may not align with the retailer’s brands.
Another element lost in the social media black box is ethical practices. Through owned e-commerce channels, retailers can dictate which cookies are used, how much data is collected and what happens to such information post-purchase. But with social commerce platforms, retailers become subject to the same ethical standards Meta, TikTok and Snapchat all live up to, which we know isn’t a high bar.
When less than one-fifth of consumers trust the UK’s leading retailers, the decision to join the social commerce bandwagon seems ever so risky.
Brand behaviour needed in social commerce
To ensure retailers engage with consumers on social media in a safe and protected way, consumers need to see elevated standards around transparency, inclusion and respect.
Whilst social commerce is seen as a jackpot to many retailers, the ambiguity of the commerce channel and scrutiny of social media platform’s reputations fails to offer retailers the above principles. That said, there are a number of ways social media can be used that allow retailers to increase purchasing decisions but maintain control over important touch points.
The key to doing so is through a caution-first approach. With the pitfalls and concerns surrounding social media, retailers must consider and respect consumers’ digital rights above their own needs. This is especially felt when it comes to data transparency, ownership and inclusion around new commerce channels. That’s not to say retailers need to boycott social media but rather consider the perils of personalisation and concerns around children’s online safety when using platforms that aren’t adequately regulated.
Social commerce has shone a light on the emergence of new ways to reach consumers and it’s becoming increasingly ingrained in their lives. With the current ethical standards, Big Tech companies live up to, retailers looking to leverage social commerce platforms play a risky game; ethical misalignment, negative brand reputation and dilution of control all come into play. Instead of jumping into a relatively new concept blindly, retailers need to ensure they are approaching new platforms on their own terms with improved standards. By doing so retailers will be in a unique position to approach social commerce and other new channels set to emerge with a consumer-first mindset.