The key ingredients of social commerce success

If you want to know why social com­merce is grab­bing the atten­tion of brands and retail­ers world­wide, con­sid­er the fol­low­ing: in 12 hours on 20 Octo­ber 2021, one of China’s most suc­cess­ful live stream­ers, Li Jiaqi – known as the Lip­stick King – sold prod­ucts worth ¥10.7bn (£1.2bn) on online shop­ping site Taobao.

Social com­merce is all about sell­ing prod­ucts direct­ly via social net­works such as Insta­gram, Tik­Tok and Twit­ter. Con­sumers get to see prod­uct demon­stra­tions, have their queries answered ‘on air’ by the pre­sen­ters and make pur­chas­es, all with­out hav­ing to leave their site of choice. This fast-emerg­ing sales chan­nel was worth $585bn (£483bn) last year, accord­ing to Grand View Research, which fore­casts that the mar­ket will expand at a com­pound annu­al growth rate of 30.8% from 2022 to 2030. 

Increas­ing num­bers of British brands are grasp­ing its poten­tial to reach a wider audi­ence. For instance, after Bar­bour adopt­ed the in-app shop­ping fea­tures that Insta­gram start­ed offer­ing in the UK in 2018, its sales via the chan­nel increased by 42%, with traf­fic to the lux­u­ry label’s web­site from Insta­gram near­ly dou­bling.

Accord­ing to Tik­Tok, this is “a new kind of shop­ping cul­ture we call com­mu­ni­ty com­merce – that inter­sec­tion of shop­ping, enter­tain­ment and com­mu­ni­ty, where a sin­gle piece of con­tent can quick­ly go viral and cre­ate demand glob­al­ly. From hash­tags like #AsSeenOn­Tik­Tok to #Tik­Tok­Made­Me­Buy­It, there are over 29 bil­lion views that speak to how real this behav­iour is and how it’s clear­ing the shelves for brands.” 

Indeed, the com­pa­ny points to research pub­lished last year indi­cat­ing that 37% of Tik­Tok users had bought an item that they’d dis­cov­ered through the plat­form. 

It’s a pow­er­ful com­bi­na­tion. On the Tik­Tok Shop live chan­nel, for instance, a make-up influ­encer called Nis­rin has sold £10,000 of goods in one ses­sion to her 500,000 fol­low­ers. 

The plat­form says that its recent “sum­mer sale event deliv­ered over 267 mil­lion live views, illus­trat­ing how much appetite there is for this for­mat – not just in gen­er­al, but specif­i­cal­ly in terms of com­merce”. 

Over on YouTube, The Unit­ed Stand, an unof­fi­cial chan­nel for Man­ches­ter Unit­ed fans, has sold a sub­stan­tial num­ber of t‑shirts and hood­ies to its 1.53 mil­lion sub­scribers. 

Mark Gold­bridge, The Unit­ed Stand’s founder and pre­sen­ter, believes that the social com­merce mod­el is the best way to achieve sales at a time when the high-street retail chan­nel is already strug­gling bad­ly and a reces­sion is nigh.  

“We’ve used YouTube to cre­ate the kind of con­tent that mat­ters most to the fans,” he says. “Then, to take that pas­sion a step fur­ther, we’re look­ing for gaps in the mar­ket to engage and mon­e­tise the com­mu­ni­ty we’ve built.”

What it takes to get it right

Anoth­er key to suc­cess with social com­merce, par­tic­u­lar­ly live stream­ing, is hav­ing an inter­est­ing tale to tell. That’s the view of Simon Water­fall, MD and chief soda mak­er at soft drinks com­pa­ny Soda Folk. 

“This is essen­tial on Tik­Tok,” he says. “The plat­form tends to suit brands with sto­ries to tell. We have com­pelling ones to tell about our ori­gin, ingre­di­ents, flavour inspi­ra­tions, char­i­ty work and even the peo­ple we fea­ture on our pack­ag­ing.”

When brands include their founders as part of the nar­ra­tive, it builds rela­tion­ships with the online com­mu­ni­ty and deliv­ers mea­sur­able results, accord­ing to Tik­Tok. It believes that con­sumers tend to see the founders as authen­tic experts in their fields. 

Show­cas­ing a broad range of con­tent and activ­i­ties is also an impor­tant part of get­ting the audi­ence tru­ly engaged with your brand, says Xavier Klein, UK head of per­for­mance at ecom­merce con­sul­tan­cy Mak­ing Sci­ence. 

“This needs to incor­po­rate cre­ativ­i­ty – such as audio­vi­su­al mate­r­i­al that’s attrac­tive and coher­ent with the brand – to gen­er­ate inter­est with the tar­get audi­ence,” he advis­es. “It’s not enough to sim­ply open shop win­dows on dif­fer­ent social net­works. You have to make an effort.”

Pet food and acces­sories retail­er Pet­co, for instance, has run a range of live shop­ping events on Face­book, mix­ing fash­ion, char­i­ty and, of course, cute ani­mals. 

The first such event, in April 2021, was called the Per­fect Fit. Host­ed by actress, influ­encer and pet own­er Arielle Van­den­berg, it fea­tured a range of fash­ions, plus an appeal to audi­ences to adopt res­cued dogs. Per­fect Fit reached more than 986,000 peo­ple, exceed­ing Petco’s tar­get by 44%, and the total rev­enue from the sales it gen­er­at­ed was more than twice the cost of hold­ing the event. 

Production values matter

Nat­u­ral­ly, image counts for a lot on plat­forms such as Insta­gram and Tik­Tok. Home­ware brand Piglet in Bed has found that the effect of well-cho­sen visu­al con­tent is an impor­tant fac­tor in social com­merce. 

“What’s real­ly cool about this chan­nel is the way that one organ­ic Insta­gram post, say, can affect every part of the mar­ket­ing fun­nel,” says Piglet in Bed’s head of brand, Rhi­an­non Johns. “Con­sid­er an image of a bed­room fea­tur­ing our bed­ding, for instance. If the pho­to­graph is well shot and fea­tures a beau­ti­ful, inter­est­ing, on-trend room where our prod­ucts are front and cen­tre, the algo­rithm will recog­nise that and place that image in front of a lot of peo­ple on the plat­form.”

Xu Zhang, assis­tant pro­fes­sor of mar­ket­ing at the Lon­don Busi­ness School, points out a key caveat that brands should con­sid­er before incor­po­rat­ing social com­merce into their mar­ket­ing strate­gies. 

“If con­sumers engage with social media main­ly to inter­act with oth­er users, stay up to date with news and be enter­tained, it can be chal­leng­ing for a brand to switch their mind­set into pur­chas­ing mode,” she says. “This mind­set is expect­ed to change grad­u­al­ly as the social plat­forms improve their shop­ping tools to cre­ate a seam­less expe­ri­ence between con­tent con­sump­tion and com­merce.”

Olivi­er Buf­fon, head of inter­na­tion­al at Faire, a whole­sale e‑marketplace for inde­pen­dent retail­ers, agrees. “As social com­merce grows, we’re like­ly to see more plat­forms inte­grat­ing check­out capa­bil­i­ties with­in their apps,” he pre­dicts. 

That should cre­ate more oppor­tu­ni­ties for small­er retail­ers, accord­ing to Buf­fon, who adds: “Inde­pen­dent ones in par­tic­u­lar are tal­ent­ed at bring­ing a sense of human­i­ty to the shop­ping expe­ri­ence, which is hard to do in dig­i­tal for­mats. Social com­merce helps them to deliv­er this more per­son­al touch online. It will be cool to see how these retail­ers fig­ure out how to use all these tools at their dis­pos­al and inno­vate with them.”

So, even though the poten­tial of social com­merce meth­ods such as live stream­ing is breath­tak­ing, it’s clear that the chan­nel still relies on the fun­da­men­tals of retail mar­ket­ing: apply­ing cre­ativ­i­ty to a sol­id under­ly­ing strat­e­gy. Brands and retail­ers sim­ply need to put the right prod­ucts in front of the right audi­ences, keep their promis­es and offer the best pos­si­ble cus­tomer ser­vice. Easy, right?