The Covid-19 pandemic has led to a monumental increase in e-commerce usage, with 10 years of e-commerce growth happening in just 90 days during the height of the pandemic. However, recent years have also seen the growth of social commerce, where users can shop inside social media apps. This then results in more time spent on the apps, which leads to the possibility of more sales or increased time browsing.
In 2021, it is predicted that social commerce sales in the United States will rise by 35.8% to over $36 billion.
How have social media platforms integrated shopping into their apps?
During the early days of the Covid-19 pandemic, Instagram announced “a new shopping experience to keep businesses going”: Shops. Users can visit a shop from a business’ profile, feed or stories and are able to buy products within the Instagram app using Checkout, a feature that was launched in early 2019. To make shopping on Instagram even more seamless, the app replaced the Activity tab, which notified users about likes, comments, mentions and tags, with the Shop tab. The Shop tab allows users to browse products and even gives personalised product recommendations. Introducing the Shop tab signals a major change for Instagram as it transitions from a simple photo-sharing app to an all-round entertainment app. Earlier this week, Adam Mosseri, the Head of Instagram, announced that, according to him, Instagram is no longer just a photo-sharing app and is now looking to become an entertainment platform.
Following Instagram’s updates to integrate shopping into the app, Facebook (Instagram’s parent company), introduced Facebook Shops in May 2020. Facebook’s goal is to “make shopping seamless and empower anyone from a small business owner to a global brand to use our apps to connect with customers”. A Facebook Shop is free to create and allows businesses to customise the experience and select featured items. Users can find a Facebook Shop on a business’ Facebook Page or Instagram profile. Like Instagram, consumers can use Checkout to purchase items within Facebook if the business has the feature enabled.
Last month, Facebook announced that Shops would be expanding to two of their other services, WhatsApp and Marketplace, in a step to push social commerce across all its platforms. Facebook will invest in new technologies such as augmented reality and artificial intelligence to “power the future of shopping” across their social media platforms. The company will start testing a new visual search powered by artificial intelligence. On Instagram, Facebook’s app which relies the most on photos and visuals, augmented reality will help users to visualise items before they buy. Facebook states that even as shops begin to open following the easing of coronavirus restrictions around the world, two-thirds of online shoppers still want to virtually try on products at home. In order to fully personalise users' shopping experiences on its apps, Facebook will introduce Shops ads which will “provide unique ads experiences based on people’s shopping preferences”.
The rise and popularity of social commerce
Whilst users initially reacted with outrage at Instagram’s decision to replace the Activity tab with the Shop tab, many have now grown accustomed to it and use it to browse and buy products on Instagram. Social commerce has now been accepted on social media platforms by users, perhaps due to its ease and usefulness. In fact, social commerce sales have surpassed $30 billion in the United States. In 2021, it is predicted that social commerce sales in the United States will rise by 35.8% to over $36 billion.
Facebook and its companies are not the only social media apps to utilise social commerce. In fact, Snapchat has also embraced new shopping technologies such as augmented reality. Shopping on TikTok, which gained popularity during the pandemic, has seen a 553% increase.
Social media apps have become increasingly popular each year and users spend more of their time browsing on these apps. For example, Generation Z are almost constantly connected via social media and are set to become the largest consumer generation ever, therefore it makes sense for social media companies to integrate shopping into their apps. Additionally, the pandemic led to an enormous increase in social media usage and thus an increase in shopping on social media. The number of users who shop from a social media app increased by 146%, whilst 70% of consumers used social media to shop for new brands in the last year. The relevancy of a product is also important for users and confirms that personalised recommendations and ads on social media platforms influence consumer’s choices.
Shopping is now a key feature on social media platforms and social media companies are continuing to innovate and invest in technologies that will ensure a smooth and personal shopping experience for customers. Social commerce is here to stay.