Social commerce has come of age. Its impact on the way people shop and purchase products has reached a level that rivals the success of traditional mass media of decades past.
Today, retailers and brands use social media to directly interact with their audience, making it a key component of their business model. But even as social retail engagement gains unprecedented reach and influence, some businesses are still struggling to implement strategies that work for them.
In this blog post, we will explore social media's impact on consumer purchase behavior and retail advertising by looking at quantitative and anecdotal proof of the shift toward social commerce — and how the changing landscape benefits both buyers and sellers.
How shoppers are discovering products via social
Social commerce already plays an integral role in the digital economy, and it’s only going to become more important as Gen Z spending grows.
In 2021, consumers around the world spent nearly $600B on purchases made through social platforms. By 2024, that number is expected to crack the $1T mark. By 2028, it’s expected to be over $3T. (Social commerce in the United States, Statista)
Over 35% of American internet users made a purchase via social commerce. (Social commerce in the United States, Statista)
Of social media users in the U.S., 55% admitted having bought a product they discovered on social. (Social commerce in the United States, Statista)
Here's how consumers are using specific social platforms to discover brands and purchase products:
- 78% of American consumers have discovered a product on Facebook
- 15% of Facebook users used the social platform to look and shop for products
- 50% of consumers say they discover new products through Facebook Stories
- 58% say they’ve visited a brand’s website from a Facebook Story ad
- 31% have browsed a Facebook Shop
- 250 million Facebook Shops worldwide
- 66% of Facebook Shops have reported higher order values (AOV) than their own websites
- 62% of people have reported being more interested in a product after seeing it on a Facebook video
Of U.S. social media users, those on Facebook and Instagram were most likely to make purchases. (Social commerce in the United States, Statista)
- 80% of users cite Instagram as part of their decision-making process when purchasing a product or service
- 72% of users report making purchase decisions based on something they saw on Instagram
- 51% of users admit Instagram influences their shopping habits
- 50% of Instagram users follow at least one business
- 58% of users say they’re more interested in a brand after seeing it on an Instagram Story
- 50% of users say they’ve visited a website to make a purchase after seeing a product or service on Instagram Stories
- 64% of users say Pinterest is where they go to find a product or service they can trust
- Pinterest users spend 2x more per month than people on other platforms
- 40% of Pinterest users are more likely to say they love shopping
- 75% of users are more likely to say they’re always shopping
- 83% of weekly users have made a purchase based on branded content seen on Pinterest
- 47% of Pinterest Users Spend Time Finding Products and Shopping on the Platform
- 85% of Pinterest users say that Pinterest is their go-to social platform to visit when they start a new project
- Shoppers on Pinterest have 85% bigger baskets than shoppers on other platforms
- Weekly users are 7x more likely to say that Pinterest is the most influential platform in their purchase journey
Pinterest users said they were 59% more likely to discover products on Pinterest than on other channels. (Social commerce in the United States, Statista)
- 67% of users say TikTok inspires them to shop — even when they weren’t planning to do so
- 73% of users report that they feel a deeper connection to companies they interact with on TikTok
- 37% of users say they discover a product on TikTok and immediately want to buy it
- 29% of users have reported trying to buy a product from TikTok, but missed out because it was already sold out — a phenomenon that is now known as the TikTok Feta Effect
- The hashtag #TikTokMadeMeBuyIt reached over 7.4 billion views in 2021
- 60% of global users say they follow brands on TikTok
- 52% of users worldwide say they search for products or shop on TikTok
- 67% of users say content has inspired them to shop even when they weren’t looking to do so
- 39% of users say that “lifting their spirits” is a key factor in TikTok purchasing decisions
- The average TikTok campaign ROAS was 2X the median campaign performance benchmark in commissioned studies
- Campaigns in the U.S. saw a 14% ROAS versus all digital paid media
- Consumer spending on TikTok increased by 77% in 2021
How social platforms are enabling commerce
By now, most major U.S. social media platforms offer at least one retail-specific program. For years now, Facebook has dominated on both sides of social commerce, ad spend and consumer spending. But TikTok is growing fast and the other networks are working to carve out their piece too.
Here is how each social channel is prioritizing retail-specific advertising on its platform:
Meta (Facebook and Instagram)
Meta’s Commerce Manager powers a variety of shopping programs on Facebook and Instagram. Commerce Manager, which is Meta’s central tool for all selling activity across its properties, give merchants the ability to manage product catalogs, run dynamic product ads (DPA) to their website, set up Shops, view sales activity, and use checkout.
Facebook DPA uses product feeds to serve its users' dynamic listings on Facebook and Instagram that link to products on the merchant's website.
Facebook and Instagram Shops
Shops let merchants create storefronts within Facebook and Instagram so users can search, discover, and purchase products without leaving the platform.
Live Shopping on Facebook is a way to sell and advertise products while live streaming.
Instagram Shopping lets merchants create real-time and pre-made content to advertise products.
Pinterest shopping ads help users discover products related to the pins they browse and share. Pinterest collection ads let merchants create slideshows and videos to help Pinners discover products related to their interests.
Standard Product Pin Ads
Help shoppers discover your products with ads that use Pinterest’s simple yet effective vertical or square image format.
This visually engaging video story format is designed to capture shoppers’ attention. Best for product ads with a strong visual story.
This format lets merchants transform product Pins into shoppable ads. Works with product catalogs. Shopping ads show one image at a time and send shoppers to product URL included in the catalog. Shopping ads are formatted to the same specs as Standard Product Pin Ads.
Carousel Pin Ads
Presents shoppers with swipable multi-image ads. Best for collections or to showcase a product with a variety of captivating images.
Collections lets merchants mix formats to give shoppers the full lifestyle imagery and video. Collections Ads appear as one main image above three smaller images.
TikTok shopping gives merchants the option to launch product ads on TikTok while managing everything from product upload, point of purchase, shipping, and fulfillment within the platform. TikTok's product links, on the other hand, let merchants call out products within their videos so users can click to purchase. TikTok shopping merchants can even link to products from their shopping catalog to let shoppers make purchases right then and there.
Product Links gives merchants the ability to link to specific products shown within their content. Merchants can link to one or more products from their catalog.
Dynamic Showcase Ads
With TikTok DSA, merchants can create personalized ads based on product catalogs. TikTok DSA are customized video ads, which are created programmatically using ad templates that pull the product’s information like titles and images via data feed. DSA allows merchants to automatically promote thousands of products with video ads that are targeted to their audiences’ interests based on activity.
Collection Ads let merchants to include product cards in their content. When shoppers click on a product featured in a card, they're taken to an instant gallery page within TikTok where they can browse and purchase from the merchant’s collection of items.
TikTok’s LIVE Shopping is similar to Facebook and Instagram’s live shopping formats, but with a TikTok twist. In TikTok, shoppers can click on pins that pop up over the live stream to add products to their cart. LIVE Shopping makes it easy for merchants to sell via livestream by tapping into the product information that’s already in their TikTok Shopping ads (see above).
In Q1 of 2022, Twitter announced a new program dubbed (what else) Shops. According to the announcement, Twitter Shops will allow merchants to create product collections of up to 50 SKUs. Collections will be showcased on the merchant’s profile.
The feature is currently free to use and TechCrunch reports that Twitter is not currently monetizing it while in testing.
How merchants can benefit from the shift to social
As platforms go all-in with features specifically designed for retail advertising and tools that make marketing more intuitive and engaging, we can expect it even more consumers to buy in. Great news for brands who are already investing in their social commerce strategy.
But what about merchants who are still putting all of their ad budget and marketing time into long-established ecommerce methods like search ads and marketplaces?
In the next part of this series we dive into the process of developing and launching a future-proof social commerce strategy.