In the dynamic landscape of e-commerce, one phenomenon has captured the attention of businesses and marketers alike: the ascent of social commerce.
Social commerce has revolutionized the way companies connect with consumers and market their products. It has become an indispensable component of modern marketing strategies. By using the power of social media and harnessing their vast user bases, businesses can now tap into a new avenue of opportunities -- driving sales and establishing stronger customer relationships.
According to statistics from Insider Intelligence's eMarketer, social media platforms have witnessed a shift from simple communication hubs to thriving marketplaces. In 2022 alone, social commerce generated $53.1 billion in revenue in the U.S., a 34.4% increase over the previous year. These numbers underscore social commerce's potential for businesses to bolster their bottom line and gain a competitive edge. Moreover, research indicates that the average order value of purchases made through social commerce channels is higher than that of traditional e-commerce, making it an enticing prospect for marketers seeking to maximize their returns.
Embracing social commerce is no longer just an option for e-commerce brands, it has become imperative for thriving companies in the digital era. Consumers spend an ever-increasing amount of time on social media platforms, with an estimated 4.9 billion active users worldwide, according to Forbes Advisor. This reach provides businesses with an opportunity to engage with their target audiences, build brand awareness and drive conversions. Companies that don't incorporate social commerce into their marketing strategies risk falling behind competitors. As social commerce continues to gain momentum, businesses need to understand the evolving landscape to harness its transformative potential.
What is social commerce?
Social commerce refers to the integration of social media and e-commerce, where online shopping experiences are enhanced through social platforms. It involves the use of social media networks -- such as Facebook, Instagram, TikTok and Pinterest -- to promote and sell products directly to consumers. Social commerce uses the power of social interactions, recommendations and user-generated content to drive sales and create a more engaging shopping experience. It blurs the lines between social media and online shopping, letting users discover, research and purchase products without leaving their social media platforms.
E-commerce companies have embraced social commerce as an integral part of their marketing strategies to tap into the audience and engagement potential of social media platforms. By using social media's reach and influence, e-commerce businesses can build brand awareness, drive website traffic and generate sales. These companies create dedicated brand pages, shoppable posts and ads that integrate product information and purchase options within users' social media feeds. Social commerce lets e-commerce companies engage with customers directly, address their queries, provide personalized recommendations and collect feedback to foster a sense of loyalty and community.
To further enhance their social commerce strategies, e-commerce companies often collaborate with influencers and brand advocates who have a significant following on social media platforms. Influencers can showcase products, share their experiences and provide authentic reviews to influence their followers' purchasing decisions. E-commerce companies also encourage user-generated content where customers share their product experiences, reviews and images. This user-generated content acts as social proof and builds trust among potential buyers, boosting conversion rates.
Social commerce statistics
Social commerce has emerged as a crucial e-commerce strategy due to its ability to tap into the power of social media. It offers a unique opportunity for brands and businesses to connect with their target audience in an authentic and engaging manner, integrating the shopping experience into social platforms. Here are some trends and statistics to help businesses decide how to use this growing marketplace and find new ways to target their audiences.
1. Social media users spend an average of 2 hours and 30 minutes on social platforms
Screen use has increased by 17% over the past two years, a higher increase than the previous four years combined. Of this time spent on screens, the average global user is spending 2 hours and 30 minutes on social media, representing a 2% increase over 2022, according to GWI research. This represents an opportunity for companies to place their products and services in front of users where they spend their time.
2. 80% of internet users make online purchases
With e-commerce purchases growing year over year and social media use also rising, the prospect of social commerce as a revenue-generating strategy for businesses is a no-brainer. This goes back to the concept of meeting users where they are -- online. Marketing products and services on social media reduces the barriers to purchase and increases awareness for a brand on popular social media platforms.
3. Approximately 50% of Gen Z and millennials make purchases on social media
Facebook and Instagram represent the largest platforms for social commerce sales, according to statistics from Insider Intelligence. And with the growing number of younger generations making purchases on these platforms, social commerce is a great way to present products these demographics might like. Coupled with a retargeting strategy, brands can put their products and services in front of users who have visited their website and searched for or followed competitor brands.
4. Social commerce in the U.S. is projected to reach $107.17 billion by 2025
The annual increase in social commerce purchases will continue to rise as more companies adopt this approach and users become more comfortable making purchases on these platforms. In 2023, there is expected to be an increase of nearly 30% over 2022, bringing in approximately $69 billion in revenue, with that number continuing its rise over the coming years, according to research by eMarketer.
5. Influencers enable brands to increase their reach
Influencers on social media enable brands to reach a wider audience than their own established audiences. By partnering with social influencers, brands have the ability to balance their budgets while achieving a wider reach. The use of micro-influencers -- someone who has between 1,000 and 100,00 followers -- is best for small businesses. Enterprises can afford larger budgetary spend on influencers with hundreds of thousands -- or even millions -- of followers.
6. More than 70% of online shoppers will use social media to recommend the brands they purchase from
One of the main goals of social commerce is to improve brand image, generate higher engagement from audiences, and provide a positive customer experience. This type of recommendation is good social proof. When a company ties a social selling model into their channels, an increase in sales provides a company with added revenue.
7. 64% of U.S. internet users discover brands and products from social media
In 2022, GWI statistics found that 64% of internet users discover brands through social media channels. With this number expected to grow, integrating social selling into these platforms is a great way to reduce the barriers to purchase, ensuring products discovered can easily be purchased.
8. Social media is used for purchases and purchase inspiration around the holidays
Thirty-four percent of the respondents said that they used social media sites to make purchases during the holiday seasons, according to a Statista report. Moreover, 70% of consumers in the United States have used social media networks to find inspiration for purchases. Making a direct sale on those platforms is an opportunity to increase conversions and capture the audience during that research period.
9. 71% of consumers prefer to shop online for their purchases
It may be unfortunate for brick-and-mortar stores to see online shopping rates increase, but if those stores can combine their physical storefront presence with an online shopping experience, they can still see increased revenues. The growth of social purchases and online storefronts enables brick-and-mortar outlets to retain their customer base while also developing new relationships with audiences that find their products through social networks.
10. Online stores see large cart abandonment rates and discouraging checkout processes
Thirty-five percent of online consumers abandon their carts when required to create an account on e-commerce sites, and 27% find the checkout process too long or complicated, according to research from FinancesOnline. Social commerce allows users to buy directly from stores without the added friction that e-commerce sites have with their account creation and checkout processes.
11. TikTok buyers grew by 72.3% in 2022
TikTok is making a push from being a product discovery vehicle to a shopping platform, surpassing Pinterest for the first time with 23.7 million buyers from this channel in 2022, according to statistics from Insider Intelligence. The company is making the platform more accessible for online shopping by adding digital advertising capabilities and rolling out its own online shop feature to merchants looking to take advantage of this social platform. There has also been an increase in purchases made from livestreaming through a partnership with TalkShopLive.