How Does Social Commerce Work?

Around 86% of the German population actively uses social media - ten percent more than last year alone, which shows a very strong upward trend!

However, not only is the use of social media increasing, but e-commerce is also on the rise. Around 41% of German Internet users now shop online every week, and smartphones are the most popular devices for making all these many purchases.

Social commerce combines social media and e-commerce: a growing trend that means rapid and large-scale change for businesses operating via social media today.

So, what is social commerce? 

Social commerce describes the buying process that takes place via social media. This process includes everything from inspiration via product discovery to the actual purchase of a product itself.

This means that the customer journey is seamless and features no media discontinuity. There is no redirection to another website or physical store, no detours, and thus minimal hurdles between a first touchpoint and a final sale. Social media becomes a sales channel through social commerce.

What are the advantages of social commerce?

The potential for this expedited and simplified buyer process is enormous and only expanding. E-commerce and social media networks continue to grow together as they have done for many years.

Social media and the conversion elements used by the various platforms offer immense potential for users to make purchases directly via social media. Social commerce brings various advantages for both the company and the user.

These include:

• Improved user experience: Through direct sales, users have shorter and more direct paths to purchase and thus a seamless and greatly improved user experience. In addition, with direct sales, sellers no longer must rely on merchants or third-party services.
• Developing new target groups: With recent sales opportunities brought about by social commerce, your business can also tap into new target groups. A simple user experience increases the likelihood of conversion.
• New sales potential: The chance that users will make future purchases directly via social media also creates new sales potential that you can exploit with social commerce.
• Reduced cart abandonment: The fewer barriers, platform changes and registration processes there are, the more likely it is that a purchase will be completed.
• Built-in sales platform: You can save yourself the step of building your own online store because many social media platforms already offer this infrastructure! As these networks continue to develop, more new features are being added that only increase social commerce's simplicity.

How to do social commerce right 

Even though social commerce has the same goals and general function as any online store, the right product selection in social commerce can vary and the ways in which these products should be presented can significantly differ from traditional e-commerce platforms.

This is what to pay attention to:

• Wow factor: Social media offers users thousands – or sometimes millions – of impressions. It is essential to stand out in a potentially gargantuan crowd, attract the attention of users and hold it until you trigger the impulse to buy.
• Stimulate impulse buying: Is your product a limited must-have offer? An artificial shortage of products can encourage users to make an immediate purchase. This plays upon FOMO (fear of missing out).
• Not too expensive: The price is decisive. Social commerce encourages spontaneous purchases. If the price is too high, you discourage users who would make an unplanned impulse purchase. A decent rule of thumb is that the product should cost between 10 and 100 euros.
• Stocking and logistics: The products should be easy to store for a long time. Therefore, they should also have a long shelf life and should be compact and easy to store. This not only has a positive impact on storage, but these products are also easier to ship.

Social commerce in practice

The most important social commerce platforms are Facebook, Instagram, TikTok, Pinterest and LinkedIn.

Facebook is still the most widely used social media platform in the world, but it has extremely fierce competition. Instagram – albeit also owned by Meta, Facebook's parent company – is currently growing very quickly and is number 1 among 14 to 29-year-olds, having overtaken Facebook in this demographic.

Social commerce on Instagram 

Instagram is about so much more than just presenting a product. It's about emotions, stories and creating an experience.  

Figures show that 70 percent of users already use the platform to find inspiration for their purchases. So, the path to buying on the platform itself has already been paved in the sense that it fosters discovery and desire. 

You can tag products directly within photos and videos that are in your feed. By clicking on these markers, users are at once shown essential information, related products, and can immediately switch to your online store if desired.  

But your target audience doesn't have to be on your profile to discover your products! Since 2020, Instagram has now featured a "Discovery" tab. Here, users are shown suggestions of what they might like based on previous activity, making it easier for your target group to discover you organically. 

The United States has already reached the point at which checkout takes place directly via Instagram and Germany is highly likely to follow suit soon.  

Social commerce bridges gaps in the buyer journey by removing them entirely. This is led by in-app checkout, which is truly the very essence of social commerce – the handling of the entire purchasing process via a single platform with the goal of a seamless customer experience.

Tip: You can tag and publish products on Instagram posts directly via Facelift. You can find out more about this in the product update.

Want to learn more about social commerce? 

Check out suxeedo and Facelift's joint webinar titled "Social Commerce" with Björn Erbslöh, or listen to our podcast episode below. (Both available in German only).  

You'll get deeper insights into the following topics:

• The evolution of social commerce and what impact it can have on businesses
• How you can prepare for the social commerce trend

• How to properly apply social commerce to your business
• Case studies from practice

Guest author Björn Erbslöh is business director of Berlin content marketing agency suxeedo. As a specialist in online communication, he has more than ten years of experience in social media and content marketing. Björn is an enthusiastic tech thinker who has successfully supported projects of DAX-indexed companies as well as emerging start-ups. This article was originally composed in German and can be found here.