Modern Retail

Social Marketplaces: Using social media to facilitate direct commerce

Social Marketplaces

With the growth of e-commerce in recent years, confidence in online retail is continually increasing, and with it, the customer journey from discovery to purchase is constantly changing. Following a series of restrictions and pandemic adjustments to traditional shopping habits, online purchasing figures and consumer interest levels soared and remain high, with more people using social media, global marketplaces and add websites to find and buy products. Now, these newly formed shopping habits are becoming an increasingly integral and permanent part of people’s lives, signalling a new era for online retail, even post-pandemic.

Recent data from Statista shows that 71% of UK consumers are purchasing more online than before, a 30% increase since March 2020. Retailers are responding in kind, with 26% sharing that they have introduced new digital and e-commerce services as a direct response to customer demand. Brands can no longer ignore digital channels and customers’ increased demand for content, personalisation, and fast, frictionless transactions. However, some brands still struggle to engage with consumers and curate a premium customer experience. An increasingly popular solution is to generate content that target buyers can discover, connect with, and trigger an action. Because of this, and the recent integration of e-commerce functionality, social media channels like Facebook, Instagram, and TikTok, are no longer just an outlet for brand promotion. Unlike a traditional marketplace where users will frequently visit for product research or buying an item, social media marketplaces are an effective tool for brands to distribute content to users seeking to engage.

Why should businesses consider selling on social media channels? 

The key to effectively using any e-commerce channel is setting a strategy that can find the right customers at the right place and at the right time. With the integration of shopping features across various digital platforms, how brands expose their products to purchase-oriented users is changing. Because of this, social media networks are becoming increasingly popular for boosting conversion rates, brand awareness, and direct engagement with users. According to a product discovery report from Kleiner Perkins, online product discovery occurs on three major channels; Amazon, search engines such as Google, and other websites like social media networks. Unlike Amazon marketplace or Google Shopping, social marketplaces differ due to their browsing-based product discovery experiences in addition to the traditional customer-initiated product discovery.

Stores closing or limiting their services and hours during the pandemic led to people spending more time online, increasing the time spent scrolling through social media feeds and marketplaces. Those habits now provide an opportunity for brands to use their influence on social platforms to combine content with dynamic and retargeted advertising strategies. Selling on marketplaces like Amazon can be easy to start and difficult to master. Merchants have to compete with an extensive selection of competitors’ products, and Amazon Advertising options can be an expensive tool to learn. Social marketplaces, on the other hand, provide brands with the opportunity to curate a tailored experience for customers, targeting them with relevant, visually engaging content. The algorithms used on platforms like Facebook, Instagram, and TikTok allow products to be organically distributed to users with attributes that match a brand’s target customers. There are also no fees associated with setting up a seller account on Facebook, Instagram, or TikTok. Merchants are only charged selling fees for shipments or if they opt to use the paid advertising tools to combine with their organic presence.

The difference between web stores and social marketplaces

Merchants selling products on their website, online store or through marketplaces such as Amazon and eBay, can control the entirety of the customer experience. From the choice of SEO strategy and product selection to content marketing and paid advertising, there is a wide range of options that can offer customers a more authentic exposure to the brand. However, social marketplaces provide an opportunity for exposing a brand to potential customers with less time-consuming processes required. Formats and design are pre-set so brands can focus entirely on creating content. Established brands will also often direct most of their resources to websites or marketplaces, therefore, the competition may be lower depending on the category.

Although social media posts’ original goal was to drive traffic to websites and marketplaces, brands can now use them to excite users with content that reflects a lifestyle. And in turn, consumers have grown to expect shoppable content to appear in their social feeds. The boundaries of distinction between channels are continuously changing, and the brands that capitalise on them through targeted campaigns can achieve results. For instance, a lifestyle image posted by a brand on their Instagram and Facebook account can now include a ‘buy now’ feature, turning any post into a direct-to-consumer value proposition. Because of the variety of content formats available on social platforms, brands can curate their offerings on specific channels to best use their features for boosting engagement, visibility, and sales.

However, unlike traditional marketplaces, social marketplaces are yet to offer the same level of control over technical issues. If the service experiences downtime or any other errors occur, it could lead to negative experiences for customers that are not the merchant’s fault. For this reason, it is recommended that merchants use social media marketplaces as a supporting channel for expanding brand reach and presence alongside their primary marketplace and website stores.

Curating convenience

With the ever-growing complexity of customer journeys online, it’s clear that customers are captivated by sellers that can offer convenience and accessibility. Creating shoppable posts is a major component of implementing convenience but it does not define the entirety of the customer experience. To create a truly exceptional experience, merchants must focus on representing their brand through faster checkouts, easy discoverability, and consistent branding served to consumers through authentic content that speaks to their interests and aspirations. Curating content through social channels is an efficient method for providing solutions to a customer while resonating with individual lifestyles and promoting a sense of action. Social media channels are seeing surging conversion rates and levels of direct response. As with other marketplaces, merchants should beware that certain items and categories are currently not supported by most social marketplaces. This includes products or services relating to adult categories, alcohol, animals, digital media and electronics, healthcare, tobacco, weapons, and event tickets.

Our tips for success

It can be challenging to get started with selling on social media marketplaces. The primary focus for new merchants should be to work on building relationships with customers rather than promoting products. Growing engagement and nurturing direct-to-customer communications is a must, whether it’s through replying to messages and comments or even engaging with other channels promoting your products or brand.

Always ensure that you take the time to research and know your customers to help better understand what their needs and desires are. Even small details like which types of customers are most likely to leave a review or recommendation can transform a customer experience if used correctly with other marketing tools.

And finally, whether it’s social media or websites, brand reputation matters. The way a customer feels during and after their interaction with a brand can have huge effects. A negative experience is more likely to encourage a bad review than a positive experience encouraging a good review, so always monitor comments, answer inquiries, and deal with complaints promptly to avoid a bad situation escalating.

Final thoughts

Many businesses struggle to manage the complex needs and wants of consumers. Finding an effective and efficient strategy to reach purchase-ready consumers is a problem that will have a different answer for every brand. However, influencing consumers within their lifestyle niches and online journeys creates new pathways for brand engagement. Some campaigns may require multiple variants of copy, images, and video to be designed around specific devices which can be complex and time-consuming to craft. Although difficult, these campaigns can be very worthwhile for achieving results for specific products. Whether it’s launching a business or growing an established brand, social marketplaces may seem daunting at first but can rapidly become a profitable channel for online sellers.

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Stuart Conroy

Stuart Conroy has run Activ8 for 20 years and has operated across multiple channels in Asia, Europe and North America. With an understanding of the latest technology, logistics and outsourcing opportunities, Activ8 provides strategy consulting and hands-on solutions to brands looking to manage risk and scale opportunity in online commerce.

Activ8 utilise their experience of being on the Fast Track 100 on two occasions to help brands navigate the scaling process and operate a risk-averse multichannel strategy.

Having worked in investment banking before starting an ecommerce business as well as creating and working with a number of start-ups, Stuart has a great understanding of the challenges facing businesses of all sizes in the modern, digitally-influenced arenas.