The idea behind social commerce is straightforward. It usually involves brands using social media to sell their goods or services instead of relying on a stand-alone eCommerce site. Things are not quite so clear-cut in practice, however, as social commerce often includes sales of products promoted on social media that link to a stand-alone eCommerce store.
“Location” is an essential ingredient of social commerce. It takes advantage of social proof. In many ways, social commerce has most of the benefits of influencer marketing—without any need for working with influencers.
The two forms of online commerce are very similar. You can easily think of social commerce as a specialist form of eCommerce. Technically, eCommerce happens on a website where you built an online store. Social commerce sales, however, occur on social media.
However, definitions are quite fluid, and you might widen the meaning of social commerce to include all sales facilitated by social media. With this broader definition, you would include sales made due to social media advertising, even if people follow a link in the ad through to your main online store.
Social commerce saw a sizable increase in previous years due to the convenience of buying something within the social platform where one first discovered a product. The arrival of Facebook Shops helped spur this new sales channel. Twitter also launched commerce features with Twitter card shop buttons in tweets. TikTok also followed suit with its TikTok Shopping suite. Social commerce is also present in Instagram, Etsy, Pinterest, WeChat and many others, with dozens of other social commerce platforms popping up. Their number is bound to increase even more in 2023 after social sellers posted global revenues worth $724 billion in 2022.
Here are the top social commerce trends for 2023 to watch out for. These trends can help businesses plan their strategies for growth in the next couple of years.
Aside from edge cloud processing and advanced AI, the continuous global deployment of 5G wireless connectivity will enhance social commerce. It will enable seamless mixed reality experiences across a wide variety of connected devices.
eMarketer estimates that the number of AR users in America will rise to 97.1 million in 2023, up from 89.4 million in 2022 and 80.4 million in 2021. The market trends firm said that access to better data made them revise the projections released in their previous forecast, in which it predicted that AR users will reach 110.1 million in 2023.
If brands are able to leverage new technologies and the power of 5G to deliver more immersive shopping experiences to the consumers, this growth forecast will likely be surpassed.
While influencers will still play a key role in promoting clothing, digital avatars are poised to walk along digital fashion runways. They will give brands more flexibility in layering digital clothing, promoting new collections, and enabling digital sampling. Consumers will also have more realistic views of how clothes and accessories look when worn even when shopping online. Meanwhile, 67% of Gen Z Instagram users said they want to use digital avatars to reflect their unique clothing preferences, body type, and skin tone, according to Instagram’s 2023 Trend Report.
The rise of the Metaverse will further spur the use of digital avatars. Fashion retailers can take advantage of this trend by offering digital accessories and digital clothing that these avatars can use.
In 2022, the demand for non-fungible tokens (NFTs) went mainstream with the increased popularity of the Metaverse. This was further boosted by Facebook’s rebranding as Meta. Many independent artists and digital creators welcomed this revolutionary form of compensation for their work. Also, in 2022, Meta began NFT sharing and selling trials on Facebook and Instagram among a small group of US-based users.
However, much debate remains on the use and nature of NFTs. Among the criticisms for its use are its significant environmental impact, unreliability, lack of regulations, and volatile nature. Still, brands engaged in social commerce and eCommerce should look deeper into how NFTs can potentially benefit them in the emerging creative economy and digital ecosystem.
As a new form of social commerce, NFTs can empower creators, collectors, and small businesses alike. Before you dive into it though, make sure to exercise due diligence. Identify your potential use cases, assess risks, and determine if NFTs can add true, long-term value to your business.
Collaborating with micro-influencers isn’t exactly a new trend but it is still relevant today and will remain so in 2023. Small businesses in particular will find that micro-influencers can enable them to balance ad budgets better while achieving wider audience reach.
Unlike some big name influencers that have hundreds of thousands to millions of followers, micro-influencers collaborate with brands at budgets that even small enterprises can afford. They often have very specific audience types that simplify segmentation and ad targeting. Moreover, they are usually perceived to be more authentic and transparent about paid collaborations than major influencers. Considering all these factors, micro-influencers definitely have an impact on helping brands drive conversions.
When working with micro-influencers, choose those in a niche within your industry and whose followers are similar to your target persona. Look for people who engage with their audience on a personal level and who have established relationships with their loyal followers.
Marketing experts say that more brands will choose micro-influencers who can tell a brand story quickly and visually so that they can repurpose their content across their platforms, including email.
Brands will not do away with paid social ads even if they work with influencers. Some say that budgets for social ads by US-based brands may rise to $71.05 billion next year from $65.31 billion in 2022. The forecast follows the decision of Google and other browsers to block third-party cookies, which allow websites to remember a visitor’s details and track the sites they visit, including social media.
However, others predict otherwise, saying small to medium businesses will reduce investments amid financial challenges. The World Advertising Research Center forecasts that social media ad spending will rise by only 5.2% in 2023, down from an 11.5% growth in 2022.