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The Drum

TikTok, Facebook, Snap, Pinterest and Twitch on reinventing shopping with social commerce

TikTok, Facebook, Snap, Pinterest and Twitch on reinventing shopping with social commerce

When shoppers were pushed online by the global health crisis, the shops themselves had to follow. Social media apps then accelerated e-commerce products and shoppable ads to entice SMEs and direct response marketers. The Drum talks to TikTok, Facebook, Snap, Pinterest and Twitch about their unique attempts to rebuild our retailers and grow a new segment of ad spend.

Almost a quarter (23%) of UK shoppers now use social media to discover and buy new products. And increasingly, they are happy buying products from trusted influencers and brands on their favourite social channels.

Meanwhile, another trend emerges. Marketers and retailers want immediate incomes from their budgets. Twitter wants to generate half of its ad revenue from direct response ads, and it’s not alone. And as social brings shops to users rather than users to shops, we’re seeing a shift in how retailers – big and small – are deploying their marketing budgets.

Find out how social media giants are capitalizing on these trends.

TikTok

Last week, burgeoning social darling TikTok extended its commerce deal with Shopify from the US to Europe. It allowed more than 1 million Shopify merchants to access 100 million more TikTok users.

Retailers selling through the Shopify storefront can now connect to their TikTok For Business account to deploy in-feed shoppable video ads to targeted users by age, gender, behavior and content category. Campaigns can be optimized and tracked with an on-site pixel.

TikTok says the big winners from its European commerce launch are Omolola Jewellery, War Paint for Men, Phox Water and Lounge (three fashion-adjacent DTCs and a lifestyle retailer), with Phox claiming its sales have been boosted 42% since joining the beta program. (We can but imagine what would have happened if Ocean Spray was buyable on TikTok when the skateboarding meme inadvertently blew up.)

But with TikTok’s aggressively Darwinian feed coaxing out great, weird internet trends and creative, do retailers now have to compete with the best content to make the sale? Lisa Friedrich, head of SMB at TikTok Europe, says brands don’t need perfect content – they just need to be “authentic”. Founders stories perform particularly well and are “changing the dynamic of e-commerce”.

Kantar research says 83% of TikTok’s audience have made purchases inspired by its trending content, while Friedrich says people are using the platform to discover new products and that the hashtag #smallbusiness has been used 3bn times to date.

“We feel like that is a really powerful testament to our community and an opportunity to match them with the businesses on Shopify,“ she says.

“Be authentic and show the blood, sweat and tears that goes into building a business,“ is Friedrich’s advice for success.

Facebook/Instagram

Facebook reckons that 85% of people now shop online, and with 2.74 billion monthly active users, it has created many avenues to capture this spend. For now though, consolidation and refinement is key.

Jordanna Whayman, its EMEA product marketing manager for commerce, takes us through the history of social commerce on Facebook, starting with Facebook Marketplace in 2016, which allowed users to wheel and deal in an eBay-like manner. Even earlier there was a ’Buy’ button.

Then last May, commerce on Facebook, Instagram, Messenger and WhatsApp tied together with the launch of Facebook Shops, which was ’accelerated’ by the pandemic.

Now, businesses can create their shop, customize colors and fonts, and cherry-pick their catalogue, before putting some spend behind shoppable ads. Whayman says it is a “seamless experience from discovery to purchase”. Users can bookmark their favorite shops, opt into notifications and be part of loyalty schemes.

Facebook is spinning a lot of plates. A list of its products and features would be bottomless, but it says users are in the shopping mindset. 74% of consumers said they get shopping ideas from Facebook, Instagram, Messenger or WhatsApp according to its research. ”It is the platform where people already spend time today, and already discover new products that they are most likely to love,” Whayman adds.

”How people discover products has changed. Rather than going to a physical store, people and brands are sharing and discovering products all day, every day on social platforms.”

She says that Shops is “well-positioned to champion businesses of all sizes” now brands no longer have to go “all-in” to get the most out of the service.

Shopify pops up here too among the partners underpinning Shops, alongside BigCommerce and WooCommerce. It will be a big winner from the social commerce trend.

Looking ahead, Whayman predicts a few battlegrounds. Search will be surpassed by discovery. Shoppable video tags, live video, conversational commerce in Messenger and augmented reality all have their place too.

Snap

We’ve looked at the new kid on the block and the evolving market incumbent, now it’s time for the dark horses. First up is Snap, which last month surpassed 265 million daily active users, including 100 million users in its TikTok competitor Spotlight.

David Shaw, its group product marketing lead, says social commerce “is a bit of a buzzword”, but that Snap is building a broad suite of products for marketers, one of which (Dynamic Product Ads) is shoppable and designed to capitalize on this boom.

Shaw says: “The path to the retail market has shifted. You can reach really well-defined audiences within specific subsets of verticals, interests and categories more today than ever before.”

It is running Shopify-integrated product ads that appear near relevant content. TikTok has a similar approach, but Snap’s USP is in augmented reality, which lends itself to try-before-you-buy while the high street doesn’t. Snap has become a virtual showroom for eye make-up, nail polish and shoes (Gucci, Hoka One One), among other things.

It is running the Shopify Pixel to track campaigns and says it is the first of its peers to properly measure AR campaigns. Shaw says AR was “very much seen as a flashy innovation, but from the beginning we really wanted to tie brand impressions to the effect on the bottom line“.

Agencies are taking notice of the shift, some pivoting to e-commerce consultancies (like Havas Media Group) to help clients shift from bricks and mortar into digital spaces. That’ll encompass getting catalogues on to Shopify, and having them optimized for the several platforms they’ll be plugged into while managing brand storytelling efforts too.

Shaw acknowledges that product discovery remains the biggest barrier. Snap has allowed some to set up shops directly on the platform (you’ll see more of that), and then there are minis – little apps coded to live within Snap’s chat (we’re seeing echoes of Facebook’s ambitions with Messenger here).

Concluding, Shaw admits: “The line between direct response advertising and brand advertising is getting thinner. We’ve been on a four-year project to build a really sophisticated advertising platform that is anchored around measurement. Every penny spent on the platform is contributing towards the bottom line in some way, shape or form.”

Pinterest

Discoverability and purchase intent keeps cropping up in these discussions, and Pinterest is no different. It is different, however, in that it is a “visual inspiration platform”, according to its head of growth and shopping product Dan Lurie, and not social media.

Pinterest users pin ideas and inspiration to boards, of course, and a lot of the time these are products that can, increasingly, be bought on-platform. Its global monthly active users have increased 37% year-over-year to 459 million, with 100m of those joining last year.

Lurie says: “We’re in a good position to help people discover things to buy and how to style them, and to provide them with a path to purchase. With this type of e-commerce, we’re still at the very early stages of what it can offer and the impact it will have on the retail industry.”

Pinterest’s shopping offering feels like less of an interruption to the experience than across other platforms, which comes down to mindset. “People are planning, they’re not looking for social interaction. They’re ready and willing to shop and discover new brands, and it’s that intent that makes Pinterest a different kind of platform.”

You can’t exactly argue that that’s the priority of a Facebook or TikTok user. For Lurie, relevant ads on Pinterest actually add value. Distinguishing itself from rivals, he says: “We’re building a place to shop online, not just a place to buy”.

It wants to become the virtual shopping aisle, not just interrupt users with product ads. Its research says 84% of weekly users are considering products and services to buy. 97% of the top searches on Pinterest are unbranded – so just imagine being the first brand on to sponsored searches in your category, Lurie says. In the UK, it worked with retailer John Lewis at Christmas to sell baubles and festive table settings, with 10 shoppable Carousel ads and the UK’s first Trend Badge – an ad solution that integrates advertisers with the most-searched trends.

Building on that, on 3 March it ran its first-ever global advertising summit, Pinterest Presents, to showcase use cases and new features. Lurie concludes: “Our ultimate vision for shopping is that you’ll be able to buy anything you see on Pinterest, or get personalized recommendations for something just like it [with virtual search]. Every Pin can be a starting point for shopping and it should be seamless from Pin to purchase.”

Twitch

And finally, Twitch, the leader in live social video, acquired by Amazon for $1bn in 2014.

The winners in social commerce will have some dominance in content, influencing, commerce, catalogue and advertising. It sure sounds as if Amazon has in Twitch a horse in this race.

Sarah Iooss, head of sales for the Americas at Twitch, says that right now, ”Twitch is more suitable for brand building opportunities over direct response marketing”. A sponsored live stream recently let gamers design a Lexus IS car – it is a typical Twitch execution. Iooss says: ”The best executions lean into the participatory and community-driven nature of the service.”

Bespoke, interactive and live is Twitch’s approach. As a creator platform, it also has to create tools for its users to generate revenue lest they build communities elsewhere. Products are strictly digital: monthly channel subs, gift subs, bits and gift cards. The subs are a benefit tier that can include custom emotes, subscriber badges, exclusive chats and ad-free viewing.

Real money is being exchanged to support creators in exchange for virtual benefits. There is evidence of Amazon/Twitch integration already. Prime Gaming has some visible benefits for Twitch users (free games and subs). And merch sale pilots have run through the Amazon Pay checkout. Iooss says: ”Looking ahead, we’re excited to work with Amazon to offer custom activations for brands.”

Right now, the closest thing Twitch has to social commerce is around live shopping moments such as Twitch Sells Out – two QVC-style 12-hour streams during Amazon Prime Day. Popular Twitch streamers spotlight games and deals, which could be bought on-stream.

Social media giants run algorithms to predict what content we would like to watch, but could they predict what we want to buy based on these behaviours? Or does the solution to discovery and browsing lie outside of advertising? Shoppertainment has prospered in Asia, and maybe it could here too. If social media is to evolve into the digital mall, you have to wonder what role bricks and mortar will play going forward.

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