As contextual commerce reshapes the landscape of online shopping, social media platforms are embracing the opportunity to integrate purchasing directly into their platforms.
What were once platforms primarily for social interaction and sharing have now evolved into robust eCommerce ecosystems. Platforms ranging from Facebook and Instagram to TikTok and Pinterest are incorporating shopping functionalities, blurring the boundaries between social networking and online shopping.
For example, Pinterest has been diversifying its range of shoppable content. Last fall, YouTube is simplifying the marketing and sale of products within videos, providing creators with additional avenues to monetize their content.
Merchants are also eager to leverage the growing trend of social media purchasing. eBay, for instance, is rolling out artificial intelligence tools to help sellers engage with social media users more effectively.
Despite the potential, the penetration of social commerce remains relatively low. According to the 2023 PYMNTS Intelligence report “Tracking the Digital Payments Takeover: Monetizing Social Media,” which surveyed nearly 3,000 U.S. consumers, 43% browse social media to discover goods and services, yet only 14% actually make purchases through these platforms. Facebook leads as the most common platform for social commerce, followed by Instagram, YouTube, and TikTok, respectively.
To meet the growing demand, solution providers are developing tools to enhance social commerce capabilities. Shopline, a commerce solution provider, recently introduced new features for social media integration, including targeting capabilities and ad effectiveness tracking tools. Similarly, Trnd, a social commerce platform, launched its platform for creators, offering shopper-friendly tools for influencers to sell products.
David Abbey, CEO and Co-founder of Trnd, highlighted the evolving landscape of social commerce, emphasizing the need for a unified platform to meet the needs of brands, creators, and consumers seamlessly.
In a separate development, consumer experience platform Fermat announced raising $17 million in its Series A funding round to develop a social commerce shopping platform utilizing AI and machine learning.
At the core of the rise of social commerce is the vast reach and influence of social media platforms. With billions of users globally, these platforms serve as virtual marketplaces where brands can showcase their products to a diverse audience. Through targeted ads, influencer partnerships, and organic content, businesses can increase visibility and drive sales.
Moreover, social media platforms prioritize user convenience through seamless integration and features like shoppable posts, product tagging, and in-app checkout. These functionalities streamline the purchasing process, enhancing the overall shopping experience for consumers.
The proliferation of user-generated content and influencer marketing further accelerates social commerce growth. By leveraging social proof and influencer endorsements, brands can expand their reach and credibility, tapping into existing communities and driving conversions.
