Which social platform will win the social commerce race?
With tools for buying and selling increasingly embedded directly into social apps, there’s a new retail gold rush on. For The Drum’s Evolution of E-commerce Deep Dive, we look at who’s leading the pack.
Livestream e-commerce is still in its infancy in the west / Adobe Stock
Only a few short years ago the social commerce game was Instagram’s to lose. With the weight of Facebook’s e-commerce ecosystems behind it and a young userbase habituated to buying online, social commerce dominance looked assured. But with the pandemic supercharging e-commerce trends, new frontrunners have emerged to challenge its lead.
TikTok in particular has been a thorn in Instagram’s side. Its history in China, where social commerce is much bigger than in the UK or US, has allowed the app to come in strong on connecting brands to consumers. Mollie Lyons, senior social manager for the specialist social agency Wilderness, explains that: “Tiktok is now paving the way for e-commerce brands, with the platform giving these brands a real opportunity to hit the ground running.”
Nevertheless, she says, ”there is still value in having a brand presence and pushing products/services through Instagram, with the more exposure to your audience meaning the higher the consideration”.
For Sarah Penny, content and research director at Influencer Intelligence, brands’ familiarity with Instagram is one of the platform’s great strengths: “Instagram has been around longer, meaning more brands have experience using it and have seen the results first-hand. For marketers, there’s less risk involved when trying new features out on a platform they are comfortable using.”
She also thinks, however, that the direct relationship between an influencer and their followers on TikTok is potentially a more powerful tool when it comes to selling a product. As a result, she says, many marketers have even admitted that they’re developing products all the time to allow for selling to happen on TikTok directly.
At We Are Social, head of research and insight Paul Greenwood has been keeping an eye on how TikTok is creating new buying behaviors within audiences primed to buy via social platforms: ”It does feel like we’re entering a new era of social commerce with the rise of TikTok and the new functionality it offers.”
He says: ”What we are seeing across all platforms is a more pronounced role for social in the consumer journey in two specific ways: one where social is playing a greater role in discovery – a recent Google research found that 40% of Gen Z use TikTok and Instagram for search – as well a compression in the time from trigger to conversion for low impact purchases. Consumers may start and complete a journey in social for low-impact purchases in one session.
”For example, Instagram is a more visual platform that is well-known for aspirational, high-end content, often distributed by lifestyle influencers. TikTok and its Live Shopping offering, meanwhile, is a frenetic, QVC-like shopping experience that can last for hours.”
Snap, too, was a contender for Instagram’s control of the social commerce space. Recognizing that ‘the camera is the new keyboard’, it was ahead of Instagram when it came to the use of AR for virtual product trials and shared social shopping experiences. Spurred by those competitors for its social commerce crown, Instagram made fundamental changes to how users experience its content – to a largely negative response.
The pain points
Despite the social platforms’ investment in social commerce, questions remain about the willingness of consumers to engage with brands on the platforms’ terms.
The extent to which Instagram’s e-commerce plans have been scaled back became clear in September. It announced the sunsetting of many of its commerce features, including the retirement of its Shopping tab in favor of a lighter ’Tab Light’ alternative. This was driven in part by several of its key brand partners – including Michael Kors, Uniqlo and Prada – having left the Instagram Checkout feature.
Penny explains that part of that retreat from brands was due to a difference in priorities between platforms and brands: “Our whitepaper reveals that 61% of marketers surveyed are mainly focusing their social commerce efforts on investing in videos with shoppable links. Brands know that video continues to generate high engagement rates and want to combine this with e-commerce.
“Ultimately, though, brands want to see less friction between the content and commerce. Brands want transactions to be an easy, smooth and enjoyable experience – especially luxury brands that pride themselves on offering a first-class service to their customers. For brands to fully embrace social commerce, the technology needs to offer users a seamless in-app buying experience.”
That fundamental gap has led to some brands avoiding selling via the built-in shopping features on social platforms, instead linking out to their own dedicated e-commerce sites. That has presented a problem for platforms – even for newcomers that were originally very bullish about their social commerce proposition. It has been exacerbated by a disconnect between the analytics social platforms have access to and what they make available to brands.
According to Lyons: “Brands are becoming more and more demanding when it comes to e-commerce capabilities on social media. On platforms such as TikTok, brands want to see more detailed reporting on the app so they can have more information as to how they are receiving leads and conversations. Brands and agencies alike want to see what organic audiences are converting directly through the platforms so we can then adjust our strategies to retarget effectively.”
Despite the hype, a lot of platforms’ social commerce plans have failed to live up to expectations. Some of the most prominent examples from the past year have been around livestream shopping, in which users can directly click on a video when a product is on screen in order to purchase items.
Jack Beck, the managing partner for performance at OMD UK, says: “Outside of China, livestream e-commerce is still in its infancy. There’s a first-mover advantage for western brands. It has huge potential for e-commerce and retail brands looking to combine personalized, physical retail experience with the efficiency of a digital purchase journey.”
Regardless of that optimism, in explaining the lack of movement in its e-commerce ambitions, Instagram’s chief Adam Mosseri was forced to address the lack of enthusiasm for in-stream shopping tools, saying: “Many companies assumed that the swells and business they saw when the pandemic hit were an acceleration of existing trends that would have staying power. In practice, it seems like almost all these trends reverted to pre-pandemic trend lines.”
In contrast, however, Pinterest has found e-commerce success by doubling down on its interest-led commerce strategy rather than attempting to create purchase intention from a cold start. Its country manager Milka Privodanova explains: “When shopping on Pinterest, you can browse similar items across brands and price points and purchase from reputable merchants. It’s like a catalog, personalized to your unique tastes.
“The number of Pinners engaging in shopping surfaces on Pinterest has continued to grow year over year. 2022 is a year of further investments with a focus on growing an inspired content and shopping ecosystem.”
Those other social platforms have the capability to deliver that interest-led approach to e-commerce, so it’s especially notable that Instagram is moving to its Tab Light, less personalized approach. It speaks to the significant underperformance of some of the more elaborate forms of social commerce over the start of 2022 – though that might be in part due to an advertising slowdown across some of the larger social platforms.
So, while the e-commerce market is continuing to expand, there is a disconnect between social platforms’ priorities and where brands are choosing to invest resources. While there is still a huge opportunity for brands to use social platforms, most will be using them specifically for brand awareness and linking out to their own shops rather than taking advantage of the built-in storefronts in social apps. Social commerce has still to come of age, but as it does the competition among the platforms will only become even more fierce.
For more on the Evolution of E-commerce, check out The Drum’s latest Deep Dive.