The Rise of Social Commerce: Redefining Retail in a Marketplace-Driven World

Social commerce is growing, and once-clear divisions between social commerce and marketplace commerce are starting to disappear. Although social commerce isn’t yet as popular as marketplace commerce, it does play a pivotal role in the commerce ecosystem by driving customer engagement, building brand recognition, and supporting product discovery. As Deloitte describes it, “social commerce sits at the center of the evolving convergence of features on a growing number of online retail and social interaction platforms.” At the same time, online shoppers are more willing to buy from overseas marketplaces, which means that retailers are now competing with more global platforms such as Shein and AliExpress, in addition to Amazon, Etsy, and other U.S.-based marketplaces.

As social and marketplace shopping converge, retailers and brands need to update their marketing strategies to reflect the new reality—such as the need for stronger brand protection, accessible and responsive customer service, and other new marketing strategies. That starts with understanding how consumers shop on social media and marketplaces now, learning which platforms they trust the most, and identifying the potential for expansion into new markets through these converging channels.

What Social/Marketplace Convergence Looks Like

Social media platforms have supported commerce features like shoppable posts and livestream commerce for a while now. Marketplaces have been experimenting with community-building and live shopping events as well. What’s new is the pace of the growing overlap in the kinds of shopping experiences social and marketplaces offer.

For example, Amazon recently debuted its “Consult-a-Friend” feature that lets users share products they’re considering with their friends, to get their feedback before they decide whether to buy. Earlier this year, Amazon also launched a product feed designed to compete with TikTok Shop, a marketplace within the app that supports creators’ retail and resale commerce programs.

Meanwhile, consumers are buying from both social and marketplace platforms. In a recent international survey of consumer attitudes about e-commerce, fraud, and customer experience, 84 percent of U.S. and Canadian adult respondents of all ages made at least one marketplace purchase in the past 12 months. Fifteen percent said all their online purchases were through marketplaces.

At the same time, 40 percent of respondents of all ages reported making at least one social commerce purchase during the previous year. Among adults aged 18 to 39, social commerce is much more popular: 56 percent made at least one social purchase during the previous year. However, 88 percent of this age group also made marketplaces purchases during that time, indicating that younger consumers are more comfortable with both social and marketplace shopping.

Cultivating Trust Across Social and Marketplace Commerce

Customers shop with sellers they trust, and they shop more on marketplaces than social platforms. In the same survey, Amazon was highly trusted by 91 percent of the survey respondents of all ages. Etsy, the craft and vintage marketplace, was highly trusted by 46 percent, and 38 percent indicated high levels of trust in Facebook Marketplace.

Clear return policies, familiar payment options, and quality products all factor into trust. Counterfeit products are a serious concern on both social media and marketplaces, and platforms that show they’re addressing the problem earn more customer trust. Amazon has its own criminal investigation unit that works with global law enforcement agencies to take down organized counterfeiters. TikTok recently partnered with an authentication service to verify the luxury goods sold on the site and weed out fakes.

Expanding Internationally Through Social and Marketplaces

Twenty-three percent of surveyed consumers placed high levels of trust in Shein, a Singapore-based e-commerce platform that has become the world’s largest fast-fashion retailer. Shein slightly outranked Instagram Shop and AliExpress, another global marketplace based in China. North American consumers’ awareness of and engagement with overseas platforms like AliExpress and Shein, even though the largest marketplaces are based in the U.S., highlights how effectively Shein and AliExpress use social media to build brand awareness and engage with customers in multiple markets.

Unlike Amazon, which was founded a decade before Facebook, these newer marketplaces emerged when there was an array of well-established social networks they could use for marketing. Shein, for example, has 8.8 million followers on TikTok, and AliExpress has 8.3 million followers on Instagram, and both marketplaces run social influencer programs. (For comparison, Amazon has slightly less than a million TikTok followers and 4.5 million on Instagram.)

Both Shein and AliExpress sell into countries worldwide, although market access for individual sellers depends on geography. For example, U.S.-based sellers can only sell to U.S. customers through Shein Marketplace, and AliExpress only allows sellers in selected countries outside China to use its platform. Still, their use of social media to drive marketplace sales is an example that retailers and resellers can follow to build their own international customer bases, through social commerce or on other marketplaces that support cross-border sales.

New Strategies for Social/Marketplace Marketing

Because of the blurring distinction between social and marketplace commerce, it’s a good idea to revisit your company’s strategies for those channels to see if there are fresh opportunities for crossovers or ways to reduce duplicative efforts. For example, Shopify allows its sellers to connect their YouTube channels to their shops and to sell directly from their YouTube content, so sellers can save time on live commerce setup and expand their reach.

Protecting your brand from impostors and counterfeiters will help you build and keep trust with social and marketplace shoppers. A good brand protection program will monitor marketplaces, social networks, and the wider internet for lookalike domains, fake social and marketplace seller accounts, customer service impostors, and counterfeit goods. The goal is to document, report, and take down brand impostors as soon as they’re discovered, before they have time to damage your reputation. You can also communicate with your marketplace and social audiences about where they can buy from you with confidence and who they can contact if they have questions about the authenticity of an account, product, or message representing your brand. 

Finally, keep tabs on new social and marketplace features so your marketing program can stay at the forefront of new developments and as the distance between social and marketplace channels continues to shrink. Brands that make the most of this dynamic environment are in the best position to build trust, earn loyalty, and expand their reach, no matter how the commerce landscape changes next.

Original article at: https://www.destinationcrm.com/Articles/Web-Exclusives/Viewpoints/The-Rise-of-Social-Commerce-Redefining-Retail-in-a-Marketplace-Driven-World--162902.aspx