There’s new money in social, says Heath Barlow, that will take social media beyond a platform to communicate with consumers, but to transact with them as well.

The dominance of social media is indisputable – it already forms the main communication platform between companies and customers. With its unique ability to establish relationships and a wide reach, the question now becomes: how do we monetise social media?

While social media in Australia is primarily perceived as a tool for news and communication, the next step to an integrated storefront is not such a giant leap. The key is to understand why and how consumers want to use social media for transactions.

However, the platform must first become intuitive and streamlined to encourage and normalise social commerce.

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Related: check out our premium resource ‘Social Commerce: A Marketing Manager’s Definitive Briefing’ »

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The new money in social

Social commerce, the use of a social network in the context of ecommerce transactions, will become a mainstay channel for consumer purchases. Ecommerce is already developing alongside social media platforms and there will be a tipping point when their combined usage becomes more mainstream.

The integration of commerce is the next step in social interactions, allowing users to have more capacity at their fingertips. Marketers must realise the implications and prepare to intensify their focus on monetising social media in ways that fit the context of the platform.

Social commerce is the next big thing because it streamlines the purchasing process. Not long ago, customers had to access three to four different channels when buying online, including a page to research or find the product, a page to sell it, a page to process payment and a page to ship the purchase.

Instead, social commerce affords consumers instant gratification by giving them the ability to purchase anything at the first point of contact, making the transaction seamless.

While it’s still early days for social commerce, social networks are already laying the groundwork for its future. For instance, Facebook lets users send money via its instant messaging app, Facebook Messenger, allowing users to readily swap money with peers both near and far.

Instagram and Pinterest recently added click-to-buy buttons and YouTube features shoppable ads.

Faster, seamless commerce

Facilitating a system whereby customers can instantly purchase a product upon seeing it will quickly become a crucial competitive differentiator for retailers. Without social commerce, businesses risk losing out on the powerful pull of impulse and instant gratification if consumers are forced to wade through page after page when trying to complete a transaction.

Traditional retail methods employed to seal sales don’t apply in the new world of ecommerce.

For instance, psychologists conclude the chance of sale increases 30% if a customer can touch an item. Of course, this isn’t possible online; as such, the evolving retail landscape means businesses must develop new ways to convert product browsing into sales.

A recent study completed at the University of Amsterdam concluded that a dramatic decrease in impulse online purchases was noted when a site’s purchase function was non-user friendly as opposed to a seamless shopping experience. With consumers now having a world of choice at the tip of their fingers, it is more important than ever that retailers make consumers’ purchasing ability as easy as possible or lose considerable market share.

These factors extend beyond making your online store user friendly – forward-thinking retailers know it’s rather about making your brand’s social media channels purchase-friendly.

Social media allows consumers to interact with brands 24/7, from posting pictures of their favourite products to speaking with customer service reps over Facebook Messenger. Online relationships with brands are becoming more personal and social media is playing a big part in how consumers feel about brands. Social commerce monetises this relationship for the benefit of all.

Preparing for social commerce

The new commercial landscape promises to be even faster. E-commerce revolutionised the retail industry by enabling customers to buy products without a physical storefront, and social commerce will further increase purchasing versatility.

The difference is the collation of all the functions between customers and businesses upon a single platform.

Social media platforms will continue to be a tool of communication with consumers but will also fulfil functions of the business itself. Customers can go through the entire purchasing cycle without changing platforms. The increased flexibility promises to benefit all, creating more choice and capacity for brands and customers to connect further.

 

 

Heath Barlow is market lead Australasia at Emarsys.

 

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