"What we've seen over the last several years is people bringing social photos into their product pages and making it a part of the traditional e-commerce experience," Kelly Davis-Felner, senior director of demand and retention marketing at Bazaarvoice, told Retail Dive. "So that came first. This 'going the opposite direction' — so that you're bringing the shopping experience into social — that's much more nascent."
So nascent, that social commerce made up only 2% of revenue in 2016, 34% of shoppers had never bought anything on social media at the end of 2017, and the only major success story of social shopping in 2018 is the now-famous 23-minute Air Jordan sellout on Snapchat. Otherwise, the channel has about as many accolades as the Chicago Cubs (which is to say, not many, but a couple exciting ones).
Here's our look at shopping on social media — and how long before the industry really nails it.
Fertile ground for a social invasion
Social media platforms are already playing a huge role in influencing consumer purchase decisions, especially with Gen Z and millennials. Gen Zers are actually twice as influenced by social media as by deals, and 80% of the group are influenced by social media when making purchases.
Leading the charge is Instagram, which alone influences 72% of its users' purchase decisions — not to mention the platform's influencers, which are used by 70% of brands and retailers. Part of the reason for social media's success, according to Davis-Felner, is how visual the platforms are, which has driven social media to become more of a "third channel" of sorts, behind e-commerce and brick and mortar.
"Even when you're talking about a brand-promoted post, there is a level of authenticity in social posts, and the good brands use that and amplify consumer voice in their social postings in a way that makes them more relatable and more trustworthy," Davis-Felner said, noting that visual content on social media is also playing a huge role in conversions.
In fact, according to a recent Bazaarvoice study, 42% of online shoppers have seen others post visual content (e.g. pictures or videos) of a brand or product on social platforms, 45% follow brands on social media and 57% have purchased a product they heard about on social media (not insignificant, considering social media-engaged shoppers spend more).
When it comes to actually convincing a shopper to buy something on social media, though, consumer or user-generated content is the "holy grail" for retailers, according to Katherine Hays, CEO of consumer-sharing firm Vivoom.
Bazaarvoice's findings mirror that, as over 80% of consumers reported that CGC increases product discoverability, improves brand trust and creates a more engaging experience, while 56% say that seeing product ratings, social media pictures and other consumer-generated content is important.
"It's trusted, it's watched, it has incredibly high click-through rates, but traditional [CGC] isn't always brand-safe, it doesn't have high quality all the time, and there's not scale," Vivoom's Hays said.
Brands she's worked with have seen positive results from initiating user-generated content themselves — something Vivoom preaches, Hays noted. Lily Pulitzer, for one, saw a 1% click-through rate on videos that they asked customers to create and share on social, with an average spend of $108.39.
Other retailers, like Warby Parker, have also been wildly successful with social media campaigns, including Warby's now-famous push for customers to share photos of themselves in their glasses and get a friend's opinion before making a final decision.
"I feel confident that my frames look awesome, but I also just shared content that keeps Warby Parker top of mind for my friends," Hays said, "who, when they want to buy frames, look to Warby Parker. Here's a glasses company that has a $1.2 billion valuation after four rounds of VC funding in large part because they made their product experience shareable."
In fact, the retailer's last funding round this March was its fifth, according to Crunchbase, and the company is now valued at $1.75 billion.
The chinks in the armor
While user-generated content might be the holy grail of social media, social shopping hasn't reached the same status for retailers. Not only is there a disparity between which generations use social channels (and are willing to buy from them), but the younger generations also have less disposable income than their older counterparts.
That creates all kinds of difficulties for retailers, including which social channels to turn to (Facebook's older demographic versus Snapchat's hyper-young audience) and whether or not to tailor entire marketing strategies around a consumer group that, as of yet, can't afford a whole lot, according to Jon Reily, vice president of global commerce at SapientRazorfish.
"Every once in a while Khloe Kardashian will do something and they'll have this massive sell out of things," Reily said of the way social media shopping generally works. "However, the majority of retailers aren't making a ton of money selling things socially yet."
In addition to being a "wild west" to monetize, Reily points to convenience as a serious roadblock to the success of social shopping. While retailers like Victoria's Secret and eBay have dabbled with shoppable content, the act of physically buying something on social hasn't gotten much easier.
"You want to open drawers, not make them walk through doors," Reily said of the online shopping journey. "So if I open a drawer and I say 'okay, that's what I need' and I can close the drawer and I'm back where I was, that makes for a better experience."